The management of a company is the activity of running the corporate enterprise. The power of management is the power of carrying out any activity that falls within the scope of the corporate purpose.
When the management of the company falls on more than one partner (all or some), and the partnership contract makes no provision on how the power of management is to be exercised, then the notion of separate management shall apply: each partner is a director, that is, he has the power of managing the company and may carry out by himself any transaction comprised in the corporate purpose, without the obligation of requesting the consent or the opinion of the other directors, or to informing them in advance of any transactions he has planned.
Separate management offers the advantage of taking decisions rapidly, but is not without pitfalls, since the individual director may carry out transactions which are not profitable for the company without the others being aware of what is going on.
For this very reason joint management is envisaged. Joint management must be explicitly agreed on by the partners in the partnership deed (Memorandum of Association) or by amending the latter if this is not envisaged, since, unless explicitly specified, separate management is the rule.
Furthermore, joint management may be based either on unanimity or on a majority vote. Where unanimity is required, the consent of all the partner-directors is required in order to carry out business transactions; in majority-based companies, the majority of the directors is sufficient and it is calculated on the basis of the profits attributed to each partners.
Both separate management and joint management may be entrusted to all the partners, or only to some of them. Finally, the management of the company may be entrusted to only one of the partners. And finally, informal partnerships and general partnerships can be managed by third parties who are not partners. If a company, whether it is a stock company or a partnership, is a member of a partnership, it can legitimately be appointed manager of the latter. In this case the manager is the stock company or a shareholder of the latter, and not a person appointed by the latter.
There are many options to choose from and the notary public, thanks to his competence, will be in a position to help you draw up a management model that best suits your needs and those of your enterprise.
While the director is the person who has the power of managing the company, that is, the power of deciding on the business transactions (internal impact), the representative is the person who has the power of expressing the corporate will outside the company, in other words, the representative acts in the name and on behalf of the company (external impact).
a) Unless otherwise provided for in the partnership contract, each director shall represent the company, jointly or severally, depending on the type of company.
This implies that:
- if the management is separate, each director may decide and stipulate deeds in the name of the company by himself (separate signature);
- if joint management has been chosen, then all the directors must participate in making deeds (joint signature).
b) However it must be pointed out that the partners can decide to regulate the power of representation differently from how they go about the management of the company.
For example:
- legal representation of the company may be reserved only to certain partner-directors;
- it may be established that for given deeds, joint signature is required, even if the separate management model is adopted;
Separate signatures may be envisaged for transactions that do not exceed given amounts or, in general, for deeds that are part of routine business, while joint signature is required for transactions where higher amounts are involved or for-non listed transactions, or for exceptional transactions (or for business transactions which are included among the activities envisaged as part of the social purpose of the company).
Seek the professional advice of your notary public.