What are the types of power for a company?

types of power in a company

Company executives cannot perform functions that exceed their scope. To perform functions outside the company and that are not within their competence, companies grant a person the authority or power to act on their behalf, calling that person a proxy.

It is important not to confuse a proxy with the legal representative of the company, since the latter has full capacity to act on behalf of the company, while the proxy will only act to the extent of the power according to the faculties granted and the legal consultant will be the one advising on how to register a company in Colombia in legal matters, taking care of all the legal services that it needs and unlike the proxy, may have an employment relationship with the company. Nor are individuals or companies who perform services for companies under contract, such as accounting services or tax services in Colombia.

Types of power in Colombian companies

The first classification of powers not only of companies but of the entire public sphere is general power and special power, as stated in article 2156 of the Civil Code.

The general power of attorney is one that is granted to the attorney for all matters of the individual or legal entity that issues it, that is, the principal. The special power, on the other hand, is one that is granted for a single diligence. According to article 839 of the Commercial Code, any notarial power of attorney is non-transferable by the attorney to a third party, unless it has the written will of the principal.

The special power is classified in turn in several ways, according to the nature of the diligence to which the agent is authorized through it, among the most common types of power according to this criterion we have:

Power for the acquisition of public or private goods

Companies in Colombia can appoint attorneys-in-fact to acquire assets, both movable and immovable. The agent must be in charge of notarizing the purchase contract, as established in article 836 of the Commercial Code. This power applies to seized goods, acquired at public auction or by any other means, as long as said transaction is carried out within the framework of the law.

Power of attorney for the registration of companies

In Colombia it is feasible to create a company through a proxy; which must carry out all the pertinent steps for it, such as the submission of the deed or articles of incorporation of the company, its registration before the corresponding Chamber of Commerce and the request for the Tax Identification Number of the new company before the DIAN.

Power to participate in tenders

This business power, also in force in our country, is widely used in the case of foreign companies located in the national territory or with another domicile but interested in participating in public tenders within Colombian territory.

Power to buy and business mergers

The companies may be represented by one or several attorneys-in-fact for the purchase of other companies or to carry out mergers between them.

Power to contract services

Another of the transactions for which a company can rely on a proxy is for the acquisition of services from both other companies and individuals.

In each of these cases mentioned above, the attorneys-in-fact can be either individuals or companies and must present the duly notarized document that endorses the granted power of attorney whenever it is necessary for any procedure or when required by the other party, in accordance with Article 837 of the Commercial Code.

As you have surely realized by now, knowing the types of business powers at the local level is extremely important for matters such as creating a company in Colombia or facilitating transactions if you have an already established company.