Jednani za pravnickou osobu v likvidaci

Acting on behalf of a legal entity in liquidation

As the law does not grant legal capacity to legal entities, the statutory body acts on its behalf. Members of the statutory body have unlimited, so-called general representative powers. They may therefore represent the legal entity in all matters, including matters that do not relate to its business or other activities.

Liquidation is a statutory way of settling the proprietary affairs of a dissolved legal entity, which should subsequently – after liquidation – cease to exist. If a legal entity is for any reason dissolved and enters into liquidation, the situation described above changes. The liquidator acquires the powers of the statutory body as soon as he is called into office. However, according to the law, his activities may only pursue a purpose which corresponds to the nature and aim of liquidation. That is to settle the assets of the dissolved legal entity, the so-called liquidation estate, to settle debts with creditors and to dispose of the net assets resulting from the liquidation, the so-called liquidation balance.

Until recently, it has been controversial  what effect the above-mentioned regulation has on the issue of acting on behalf of a liquidated company. Part of the doctrine held that entering into liquidation limits the legal personality of a legal entity only to the extent necessary to complete the liquidation. Such a conclusion would mean that any acts outside that necessary extent could not bind the legal entity.

Other professionals believed that liquidation resulted in a limitation of the liquidator's representative powers to legal actions pursuing the purpose of liquidation. In such case, a legal act of the liquidator would bind the company provided the third party was in good faith that the liquidator could act in the matter. Finally, the remaining theoreticians argued that the statutory order to pursue the purpose of liquidation constituted only an internal limitation of the liquidator's powers, having no effect on legal actions against third parties.

The Supreme Court, in its judgment of December 2023, Case No. 27 ICdo 65/2023, dealt with a situation in which an advertising company in liquidation entered into subcontracts for the dissemination of advertising for a client with whom it had entered into a framework agreement before entering into liquidation. The Court held that both the conclusion on limitation of the legal personality of a legal entity in liquidation and the conclusion on limitation of the representative powers of the liquidator would, in their consequences, constitute a fundamental interference with the legal sphere of a legal entity in liquidation and with the position of third parties.

In its decision, the Court thus sided with the third doctrinal conclusion mentioned above. It follows that entry of a legal entity into liquidation cannot affect its legal personality and it does not limit it in any way. A liquidator who has acquired the powers of the statutory body of a legal entity in liquidation enjoys universal, general representative powers. As such, the fact that the law requires the liquidator to direct his activities exclusively towards the fulfilment of the purpose of liquidation is only a specification of his general duty to act with due managerial care in the performance of his office.

It can therefore be summarised that a legal entity is bound even by legal acts performed by the liquidator which are not aimed at fulfilling the purpose of liquidation.

If the liquidator breaches the duty to exercise his function with due managerial care, namely because his actions are not aimed at fulfilling the purpose of the liquidation, but rather at continuing the activities of the legal entity (to fulfil the purpose for which it was established), he is liable to the legal entity for the damage caused thereby, or, as the case may be, is liable for its debts.

If you are interested in more detailed information, please contact the authors of the article or other members of the EY team with whom you work.

Authors:

Ondřej Havránek

Klára Hurychová