Who signs contracts in a civil law partnership? National team (part 4)
A civil law partnership is a special case among companies operating on the Polish market. Its structure differs significantly from the organization of commercial companies. We can find differences not only in terms of activities or the number of partners, but also in matters of representation. Who represents the civil law partnership? Who signs contracts in a civil law partnership? Is the signature of one of the partners sufficient on the contract? We will try to answer these questions in the article below.
Civil law partnership - short description
A civil law partnership is the only company, among all operating on the Polish market, that is regulated in the Civil Code, not in the Commercial Companies Code, and more specifically in the part devoted to liabilities, Title XXXI - Art. 860-875. A civil law partnership is the only one of the companies listed in Polish law that does not have legal personality and, above all, differs from commercial companies operating as legal persons or organizational units without legal personality, but having legal capacity.It follows that the partners, not the company itself, are the legal entities, they are also co-owners of all assets that have been accumulated in the course of the company's operation. They are also responsible for all its liabilities incurred in connection with its activities. A civil law partnership is not an enterprise - it is the partners who personally register their activities in CEIDG, they also conduct business under their own name (their names constitute the company, i.e. the entrepreneur's designation).
The partners establish a company to achieve a jointly defined economic purpose in the contract, for example to provide a specific type of services. In this case, the goal is the mere provision of services, i.e. gainful activity, so the partners do not have to specify in the partnership agreement the time after which the partnership ceases to exist. You can also set up a company for a specific purpose, such as building real estate. After the target has been achieved, the company may terminate its activities.
Each of the partners contributes to the partnership, which may be capital, but also objects, receivables and rights to someone else's property, and even the performance of work itself. Nevertheless, all contributions are assumed to be of equal size. As a rule, shareholders bear losses and participate in profits in equal parts, and they are jointly and severally liable for the company's liabilities.
Who signs contracts in a civil law partnership?
Article 865 governs the management of the company's affairs:
Art. 865. § 1. Each partner is entitled and obliged to run the partnership's affairs.
§ 2. Each partner may, without a prior resolution of the partners, conduct matters that do not exceed the scope of ordinary activities of the partnership. If, however, before the end of such a case, even one of the remaining partners objects to its conduct, a resolution of the partners is needed.
§ 3. Each partner may, without a prior resolution of the partners, perform an emergency, the failure of which could expose the company to irreparable losses.
It is clear from this provision that each of the partners not only may, but is obliged to, manage the partnership's affairs. The civil law partnership does not have a management board, nor does it work through bodies, all necessary decisions are made by the partners personally.
However, conducting the affairs of a civil law partnership should not be equated with representation. The first term covers all activities that need to be taken in order for the company to function normally and fulfill the purpose set by the partners in the agreement (running the partnership's affairs is therefore related to the internal organization of the company). The term representation, on the other hand, refers to activities that go beyond day-to-day management to some extent. It also assumes appearing before entities from outside the company, concluding contracts and taking actions affecting its functioning.
Therefore, it should be assumed that signing contracts which in some way change the company's financial relations are activities that go beyond ordinary management. The Civil Code does not formulate requirements for concluding contracts with a civil partnership, however, taking into account the fact that representation involves taking actions on behalf of other partners, both parties should ensure that the contract is signed by all members of the company. This will be a guarantee that the content of the contract will be consistent with the will of the partners.
In addition, the contractor of a civil law partnership may take other measures to guarantee its validity. One of them is the possibility of requesting the partner signing the contract to be empowered by other persons forming the company or to see the articles of association in order to check whether there are any provisions in it that the company is represented by that person. The contractor may also make the entry into force of the contract conditional on the signatures of all partners by including an appropriate clause in the contract.