© Gajus / Fotolia.com
Do you know the rules that apply in business for Powers of attorney and Signature additions apply? A shortcut like i. A., i. V. or ppa. is quickly put next to the signature when colleagues send letters and e-mails on behalf of the company. It is often overlooked what impact this can have. All employees should be aware of liability risks. An operational Signature regulation ensures legal certainty in daily correspondence. To make sure you do everything right as an assistant, in this article we will give you the most important information about powers of attorney and the correct use of signature additions:
Signature additions and their meaning
The signature additions ppa., i. V. and i. A. express in business correspondence that the signatory or. the signatory is acting on behalf of the business owner. Behind them are legally regulated powers of attorney. Anyone using the abbreviations should be clear about what they mean and what powers of attorney they are commonly used for:
|i. V.||by power of attorney, by proxy||Power of attorney according to BGB or. Power of attorney according to HGB|
|i. A.||on behalf||Power of attorney according to BGB or. Power of attorney according to HGB|
Powers of attorney and i. V., i. A. and ppa.: legally on the safe side
Important: The abbreviations ppa., i. V. and i. A. are to be seen independently of the powers of attorney for which they are used in day-to-day business. A power of attorney exists whether or not you sign with a signature suffix. A legal regulation, how exactly an addition to the signature has to look like, does not exist either. It is certainly common for an authorized signatory to be designated by the abbreviation ppa. signs. But if he just writes "Prokurist" under his name, this serves the same purpose. For the only important thing is that a third party can recognize that it is a procura.
At the same time, however, the following also applies: If you unauthorizedly use one of the abbreviations ppa., i. V. or i. A. signing and thus pretending to have a power of attorney that you do not actually hold, this can get you into serious trouble. Under certain circumstances, you may then be liable for any damage caused to your employer. With a company signature regulation, your company can create legal certainty for all employees. Read more below.
What is a power of attorney?
Anyone wishing to represent a company externally must be authorized to do so by the business owner. A power of attorney is understood to be the power of representation established by a legal transaction. According to the German Civil Code (BGB), a power of attorney for employees can be granted informally and can be freely structured. The business owner determines in which business activities he wants to be represented. The most diverse forms of powers of attorney are possible here:
- General power of attorney: This form of power of attorney applies to all business activities that the operation of the company entails and for which a proxy is legally permitted.
- General power of attorney: If an employee has a general power of attorney, he or she is authorized to execute transactions of a certain type (genus) by proxy. These can also be duties of a secretary, such as z. B. the purchase of office supplies or the booking of business trips.
- Individual power of attorney: This power of attorney entitles the holder to act as a representative in specific one-off transactions and then expires again.
These general civil law regulations are supplemented by powers of representation (power of attorney, procuration), which are regulated in the Commercial Code (HGB). These are subtypes of representation according to the German Civil Code (BGB). This is intended to meet the special requirements of commercial transactions: The business should run safely, quickly and also with appropriate protection of the business partners. Whoever participates in business should be able to rely on fixed forms of powers of attorney with uniform authority.
The procuration according to HGB
A GmbH is represented by its managing director, a stock corporation (AG) by its board of directors, etc. But in a company, the boss – i.e. the legal representative – cannot perform all legal acts himself. Therefore, he determines who is to represent him in which matters. The German Commercial Code (HGB) provides for this in the business world contractually agreed representation regulations such as z. B. the procuration before.
The procuration is defined in §§ 48 ff. regulated by the Commercial Code. A procurator is authorized to perform all judicial and extrajudicial transactions and legal acts that may occur in a commercial enterprise. However, authorized signatories are not allowed to do the following things: Sign balance sheets and tax returns, apply for entries in the commercial register, grant procuration, apply for insolvency or dissolve the commercial business. The procurator can only sell or encumber real estate with a special express authorization.
Procuration must be expressly granted. It is entered in the commercial register with notarial certification and z. B. announced on the company’s website or by circular letter to business partners.
What applies to the signature for the procuration?
In correspondence, the abbreviation ppa shows the following. the procuration to. According to § 51 of the Commercial Code, the authorized signatory must sign with the company name and his or her name, adding a suffix indicating the procuration. However, § 51 HGB is a purely regulatory provision. It serves "only" the purpose of legal clarity and facilitation of legal transactions. This means that z. B. a contract does not become ineffective because it was concluded without the addition ppa. has been signed. From the signature it must only be recognizable that action was taken in the name of the owner.
Types of procuration
Depending on the scope of the procuration, different types are distinguished:
- Individual procuration: one person alone can exercise the entire power of representation.
- Branch procuration: The procuration only covers the representation of a branch office and its activities.
- Joint procuration: The power of representation can only be exercised by two or more authorized signatories jointly.
Lexicon: Office law
Whether we are managing personnel files, writing quotations or ordering office supplies: The assistant needs basic legal knowledge in her job. If you know when a legally valid contract has been concluded, how a warning notice must be designed, or which traps lurk in the General Terms and Conditions (GTC), you can protect your company from damage.
secretaria.de has therefore compiled an overview of the most important laws and regulations that you must observe in your daily work in the Office. Download the legal dictionary now!
The power of attorney according to HGB
The power of attorney is the "weakened" form of the procuration. It includes the performance of all usual and customary transactions and legal acts in connection with the operation of a commercial business. Nevertheless, the business owner can determine the scope of the power of attorney himself – in contrast to the procuration. It is not subject to any formal requirement, it can also be granted orally. For evidence purposes, however, the power of attorney should also be issued in writing.
Power of attorney: How to sign by proxy?
The authorized representative must sign with an addition indicating the power of attorney relationship (§ 57 HGB), which must not, however, indicate the existence of a power of attorney. Usually, authorized signatories use the abbreviation i. V. ("in power of attorney" or also "in representation") to its name. Again, this is only a regulatory provision. Failure to comply with this provision does not render the declaration null and void.
Types of power of attorney
There are also different types of power of attorney:
- General power of attorney: power of attorney for all transactions and legal acts that the operation of a commercial enterprise usually entails
- General power of attorney: power of attorney for all transactions and legal acts of a certain type, z. B. in the area of sales, carrying out banking transactions, etc.
- special/individual power of attorney: power of attorney for transactions and legal acts in connection with a specific matter
Who signs with i. A.?
An "i. A." know neither the BGB nor the HGB. Nevertheless, the abbreviation has become "commonplace" as an addition to the signature. The reason for this is that in everyday business countless small things are done, which are also based on legally binding declarations. It would cripple a company if for every office supplies order, booking a train ticket, etc. the managing director himself or an authorized signatory would have to take action. For this reason, employees are often given power of attorney – not infrequently only verbally – so that they can perform the legal acts that typically occur in their area of responsibility. With the granting of power of attorney, the scope of the power of attorney is specified and it is made clear how it is signed: with the abbreviation i. A. ("on behalf of"), with i. V. ("by proxy", "with power of attorney") or without an addition. Often these powers of attorney are also regulated in such a way that to a signature with i. A. a second signature must be added.
The abbreviation i. A. in the everyday life of the assistance
If an assistant z. B. for certain transactions such as booking trips, buying gifts, ordering office supplies, etc. is responsible and the boss authorizes her to handle these transactions independently, she can sign with i. A. sign. In such a case, the power of attorney is a generic or type power of attorney: this means that it can perform similar tasks again and again without having to be authorized again each time. To the outside world, the assistant signs with the abbreviation i. A. to indicate that it is acting as a representative of the company. It is not legally mandatory to add the suffix i. A. should be inserted when it otherwise becomes clear (z. B. in the signature, by the job title, etc.) that the employee is acting on behalf of the company. Damage does the signature addition i. A. in letters, e-mails and other written documents, but in principle also not.
What applies in the case of a purported power of attorney?
Of particular importance in business is the prima facie power of attorney and the power of attorney by estoppel. In favor of the contracting party, an existing power of attorney is assumed in these cases, although it does not (no longer) exist. The alleged power of attorney is based solely on the legal appearance, i.e. the assumption that there is a power of attorney. Case law has developed two groups of cases according to which an entrepreneur must accept the transactions of an alleged representative as binding even without express authorization:
- The entrepreneur knowingly lets it happen over a longer period of time that another person acts as a representative for him (so called "representative"). acquiescence power of attorney).
- The entrepreneur did not know the actions of the sham agent, but could have recognized and prevented them if he had exercised due diligence (sog. prima facie power of attorney).
The binding effect for the entrepreneur only ceases to apply if the contractual partner does not appear to be worthy of protection, z. B. Because he knew the absence of the power of representation.
Minimize liability – clarify powers
If an employee exceeds his/her authority, he/she may be liable to his/her employer to.
Example: An assistant does not have a power of attorney. Each expenditure it makes, the boss signs. Now this is not there and the office order must go out. She signs with her name and the addition i. A. Legally, she has no power of attorney for this legal act. However, since it is assigned to the office supplies dealer with the abbreviation i. A. If the employee has indicated that he or she is authorized to place orders, the concluded sales contract is effective. Now it could come to a liability of the assistant towards the employer.
Such uncertainties and also the often differently understood meaning of the abbreviation i. A. should lead to the establishment of unambiguous signature regulations in every company. In addition, it must be clarified internally who has what powers, i.e. how far individual powers of attorney extend.
Signature rule must be
If there is a signature policy, it provides legal security. If you follow them, you won’t go wrong. A signature provision prevents costly mistakes by pointing out the legal significance of a signature with i. V., i. A. or ppa. points out. It indicates that the signatory requires appropriate legitimation. Every company should define internally who has what authority in internal and external relations – i.e., vis-à-vis third parties – and who signs what with what addition. For the employees, such a regulation means security: In the external relationship, the person who acts within the framework of the signature regulation can legally act on behalf of the company. So first check whether there is such a regulation in your company. Communicate provisions regularly – especially to new colleagues. And make sure that everyone complies with them.
The dual control principle pays off here as well: The signature regulation should stipulate that correspondence to third parties can only be made with two signatures. In addition to a signature with the addition i. A. can z. B. the signature of the supervisor stand. Usually, the higher-ranking person signs on the left side of the letter. There are no legal rules for this. Here, each company can define in its signature regulations what is appropriate in each case.
Extra tip: The placement of i. A., i. V. and ppa. in letters and e-mails is governed by DIN 5008. For professional business correspondence, you should follow these guidelines. Do the additions precede the signature or follow it?? Or nevertheless before the typewritten repetition of the name? In our DIN-5008 lexicon you will find the answer.
Template: company signature regulation
Legal certainty in the use of abbreviations i. V., i. A and ppa. in the company provides a signature regulation. Download here our sample for a company signature regulation!
Powers of attorney and signature additions at a glance
What is the scope of individual powers of attorney and how are they correctly indicated in the signature?? Our table gives you an overview of the types of power of attorney and offers suggestions for signature regulations in each case. Attention: There are no legal requirements for the use of abbreviations. The suggestions are only recommendations of the editors!