{"id":48736,"date":"2021-06-18T11:25:27","date_gmt":"2021-06-18T09:25:27","guid":{"rendered":"https:\/\/moovago.com\/non-categorise\/what-is-a-commercial-principal-definition-of-a-principal\/"},"modified":"2025-11-26T10:11:28","modified_gmt":"2025-11-26T09:11:28","slug":"what-is-a-commercial-principal-definition-of-a-principal","status":"publish","type":"post","link":"https:\/\/moovago.com\/en\/commercial\/what-is-a-commercial-principal-definition-of-a-principal\/","title":{"rendered":"What is a commercial principal? Definition of a principal"},"content":{"rendered":"\t\t
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What is a principal?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\ud83d\udcda Definition of principal<\/h3>\nGenerally speaking, a principal is an individual or legal entity who grants another person the right to represent him or her and sign legal documents on his or her behalf.<\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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In a commercial relationship, the<\/a> principal is a company that grants a sales representative the right to negotiate and sign contracts in the company’s name and on its behalf<\/b>. The sales representative is generally paid on a commission<\/b> basis. <\/p>

It’s important to understand that the principal is a company like any other, whose specific feature is that it works with an independent sales representative. This company could be, for example, a simple bakery that needs a sales representative to negotiate contracts. Calling it a principal only means that it’s a company that has appointed a sales representative. <\/p>

His relationship with his representative must be defined by acontract, known as a<\/strong>mandate<\/b>.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Difference between principal and agent<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The mandatary is the person appointed by a company to represent it.<\/p>

In other words, the person who represents the principal to customers<\/b>. In sales, this could be a sales agent or a sales representative<\/a>, for example. <\/p>

Resource :<\/strong> All you need to know about commercial agents<\/a><\/p>

\ud83d\udcda Did you know?<\/h3>

A sales agent can represent several principals simultaneously, unlike a sales representative who is tied to a single company. This flexibility enables independent salespeople to diversify their sources of income while remaining experts in their field. <\/p>

Read also: <\/strong>6 differences between sales agents and sales representatives<\/a><\/p><\/div>
Features<\/strong><\/th>Principal<\/strong><\/th>Agent<\/strong><\/th><\/tr><\/thead>
Role<\/strong><\/td>Delegating company<\/td>Sales representative<\/td><\/tr>
Responsibility<\/strong><\/td>Set targets and conditions<\/td>Negotiate and close sales<\/td><\/tr>
Compensation<\/strong><\/td>Pays commissions<\/td>Receives commissions<\/td><\/tr>
Number of partners<\/strong><\/td>Multiple agents possible<\/td>Several possible principals<\/td><\/tr>
Legal status<\/strong><\/td>Company (SARL, SAS, etc.)<\/td>Self-employed or employee<\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The principal-agent contract<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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As mentioned above, the relationship between a principal and an agent is based on a written contract known as a mandate. This legal document is essential, as it precisely defines the rights and obligations of each party. <\/p>

The sales mandate contract must mention :<\/p>