Approval authority

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Approval authority
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Approval authority - a situation in which a person wishing to conclude a contract on behalf of a specific entity holds an appropriate document authorizing him/her to perform an appropriate legal action. This means that it is entitled to conclude a given agreement thanks to its power of attorney, sitting in the body representing a given entity or having the status of a partner (in the case of partnerships or sole proprietorships). With this in mind, the approval authority enables the conclusion of a binding contract, making a commitment to the company or bearing the financial risk associated with, for example, the solvency of the company. It is worth mentioning that relevant articles of association or documents granting a power of attorney may provide for limiting the power of attorney to represent a specific entity to a specific type of activity or simply to perform ordinary management activities.

Obtaining approval authority

The approval authority may be obtained on the basis of the following situations:

  • Granting it by appointment, nomination or appointment to perform a given activity;
  • Determining it within the framework of a specific articles of association of a company or its amendment;
  • Granting a power of attorney or a joint or autonomous power of attorney on the basis of a document

However, it is not always possible to grant an authorisation. Well, it is possible to transfer it only in the case of persons with full legal capacity. This is due to the fact that only such a person is able to conclude an effective contract or to incur a liability for which he can fully assume potential liability for damages. In addition, the limitation may also result from final court judgments. In a situation where a person who has been sentenced to a ban on sitting or representing certain economic entities, the granting of approval authority is impossible [1].

Finally, it is worth mentioning that the approval authority may be revoked at any time. However, this must be done by the entity that has the power of attorney over the entity executing it. In the case of proxies or proxies, these are the partners in the company. On the other hand, shareholders may lose their rights by adopting a majority resolution of shareholders, a legally binding decision of a commercial court or on the basis of a provision of law which provides for such a situation by operation of law.

Revocation of approval authority

However, an approval authority is an act that cannot revoke the acts performed by a person who holds them during its duration. In addition, it is worth bearing in mind that if a person who holds a document whose approval authority expired, would be liable for any damage caused to the person who trusted him or her [2].

Furthermore, the appeal should be made in the same legal form as it was granted. This is due to the fact that if the parties have reserved for themselves a special form, the giving of which is extremely complicated, the same should look like its appeal (in order not to make hasty decisions [3].



  1. Betz-Hamiltion A., Brown L., Jasper C. R., Vincenti V., (2013-2014) p. 45-58
  2. Vallario A. M., (2014) p. 144-183
  3. Geistfeld M. A., (2011) p. 86-117

Author: Martyna Barłóg