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Introduction
At some point in life, entrepreneurs face questions about the fate of their sole proprietorships in the event of severe illness or death. Often, these questions turn into worst-case scenarios where the business ceases to continue, and the family starts disputing over the inheritance.
Introduction to the Issue
In our Szczecin law firm, we have prepared a series of articles that describe simple steps to take to prevent growing concerns related to the deterioration of an entrepreneur’s health. We will focus on two key aspects: legal and tax.
Power of Attorney and Procuration – Legal Aspects
What are Power of Attorney and Procuration?
An entrepreneur running a sole proprietorship has the option to appoint a representative as either a power of attorney or a procurator. While the concept of a power of attorney is widely understood, the institution of procuration raises many questions. Procuration is a special type of commercial power of attorney granted only to individuals. It is governed by universally applicable laws and is not subject to limitations against third parties.
Registering a Power of Attorney in CEIDG
An entrepreneur who has appointed a power of attorney should consider registering it in the Central Registration and Information on Business (CEIDG). This registration has the same legal effects as granting a written power of attorney, which significantly facilitates actions before administrative bodies or in business dealings.
Key Questions Regarding Empowerment
By asking themselves a few basic questions, entrepreneurs can decide what type of empowerment is needed:
- Is empowerment needed for a one-time affair or for ongoing management of specific aspects of the business?
- Should the empowerment expire upon the entrepreneur’s death?
Depending on the answers, the entrepreneur can decide between a power of attorney and procuration.
Power of Attorney and Procuration – Tax Aspects
Different Types of Tax Powers of Attorney
- For signing tax declarations – usually, this is a task for accountants, but it can also be granted to other persons.
- General Power of Attorney (PPO-1) – entitles action in all tax matters, usually filed electronically only.
- Special Power of Attorney (PPS-1) – allows acting in a specific case under the competence of the tax authority.
Procuration in Tax Legislation
A procurator can undertake actions in tax matters related to the running of the business, which significantly simplifies representation before tax authorities.
Conclusion and Preview of Future Articles
Maintaining health during illness is crucial for an entrepreneur. With a properly established power of attorney or procurator, one can focus on recovery, leaving business matters in trusted hands. In our next article, our legal advisor Julia Marcola and tax consultant Rafał Pazdyk will discuss the institution of succession management, which can be key in managing the further fate of a sole proprietorship.
