- “Internal” restrictions (= affecting the power to take a decision)
Restrictions may affect the powers of directors (allocation of competences between directors by decision of the GM or the board of directors, powers reserved to the GM by the articles of association,…).
However, they cannot be invoked against third parties even if they are published (unless it is proven that the third party was aware of these restrictions).
In case of excess of power (= non-compliance with the distribution of powers or performance by one or more directors of acts reserved for the GM), the acts are binding on the company (unless it is proven that the third party had knowledge of these restrictions), but the directors may be held liable on their own assets vis-à-vis the company.
- “External” limitations (= affecting the power of representation)
Limitations to the power of external representation are enforceable against third parties if they are published.
The power of representation refers to the power to represent the company in acts and in court and to bind the company vis-à-vis third parties. It is the power to sign on behalf of a legal entity.
It is thus possible to provide in the articles of association that the general meeting may grant the power of representation to: i) each of the directors individually; ii) two directors together; iii) one or more managing directors; iv) one or more specially identified directors.
As a general rule, the fact that one or more directors have the power of representation does not exempt them from documenting the decisions they implement in minutes.
