Separate statutory scope from internal instructions.
Check which external transactions are covered and which internal approvals are additionally required.
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Procuration after a business transfer: scope, revocation and the company register
Mag. Bernhard Brandauer, Rechtsanwalt
Procuration after a business transfer: coordinate scope, revocation, signing authority and company-register filings.
During a business transfer, procuration is often treated as an ordinary internal power. That is risky. Under the Austrian Commercial Code, Prokura has a statutory scope and operates externally in a different way from an internal instruction or ordinary commercial authority.
This article focuses on procuration around the transfer date. The broader article on company-register entries and powers of attorney remains the general starting point.
Quick check
What should be clarified about procuration first?
The deed, company-register position and transfer agreement remain decisive.
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Is the existing procuration still current in the company register?
The entry is an important checkpoint, not the entire review.
All paths at a glance
Overview of all answers.
Secure evidence of the current signing position.
Compare the register extract, deed, transfer agreement and actual signing practice.
Plan revocation as a coordinated transfer step.
Align revocation, notices to banks and counterparties and the company-register filing.
Procuration is more than an internal signing power
Under section 48 UGB, procuration is granted expressly by the registered entrepreneur or its statutory representative. Section 49 UGB describes its scope for judicial and extrajudicial transactions connected with the operation of a business.
A managing director may receive internal instructions, but those instructions do not automatically change the statutory external scope of procuration. The internal relationship, register and actual signing practice must be reviewed together.
Separate external scope from internal limits
Section 50 UGB provides that restrictions on the scope of procuration generally do not affect third parties. Internal instructions still matter within the company and may have consequences if breached.
A practical handover matrix should state who may approve payments, sign contracts and make decisions requiring a shareholder resolution. The matrix governs internal organisation; it does not rewrite the statutory scope.
Time revocation, expiry and the handover
If procuration should end with the transfer, legal revocation, return of records and technical removal of signing access must be coordinated. An unwanted authority should not remain alongside the new approval chain.
Under section 53 UGB, the granting and expiry of procuration must be filed for entry in the company register. Filing does not replace internal revocation, but it is an important record of the current organisation.
Record procuration in the handover file
The file should include the deed, register extracts, signing samples, bank permissions, internal approval limits and a timetable for changes. The articles-of-association review may reveal additional consent requirements.
The incoming management also needs to know who may still act externally. The management transition and procuration are separate but coordinated steps.
Common mistakes with procuration
A clause in a transfer agreement does not automatically restrict procuration for every counterparty. It is also risky to treat a company-register filing as a formality when banks and suppliers rely on the current signing position.
A sudden revocation without a functioning replacement chain can block the business. The new approval and signing process should be tested before the old one is removed.
Questions about procuration after a transfer
Can a transfer agreement restrict procuration against third parties?
It can organise the internal relationship. Under section 50 UGB, restrictions on the scope generally do not affect third parties.
Is a revocation without a register filing enough?
Revocation and filing are separate steps. The expiry must be filed under section 53 UGB and should be coordinated with the transfer.
Is procuration the same as managing-director authority?
No. Procuration, the managing-director position and internal powers have different legal bases and must be reviewed separately.
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