The Ecuadorian Superintendence of Companies recently issued an opinion interpreting Article 260 of the Law of Companies. This decree, in response to a consultation submitted by Dr. Catalina Arias of the Romero Arteta Ponce law firm, addresses the issue of whether or not a legal representative of a company may authorize an agent to carry out duties in his/her name. Resolution No. SC.IJ.DJC.021478-20184 also indicates how certain commercial and civil law code articles relate to the delegation of functions in conjunction with what is stipulated Article 260 of the Law of Companies.

In its decision, the Superintendence of Companies analyzed the difference between obligatory and voluntary representation. In short, it makes the distinction that obligatory representation (such as a parent or legal guardian’s duty to represent a minor child) may not be delegated. In contrast, the Superintendence of Companies pointed out that a representative of a company is by definition "voluntary"; for the company, in its capacity as a judicial entity, is an artificial construction that must choose its agent. Furthermore, the decision points out that the laws regarding voluntary representatives do not address delegation of duties and thus, as a matter of general legal doctrine, does not prohibit the use of derivative authority from a legal representative.

In light of the above, the Superintendence of Companies held that if a legal representative of a company has been appointed by the free will of the parties (and not by the position he holds in the company, such as general manager), it is not necessary to publish and register the authorization granted by a voluntary legal representative of a company to an agent in accordance with Article 260 of the Law of Companies.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.