POLAND Law and Practice Contributed by: Agnieszka Janicka and Krzysztof Hajdamowicz, Clifford Chance
Depending on the type of business, certain other ongoing duties will apply (eg, waste disposal or other duties related to the environment). If regulated, other
of liability than the members of the supervisory board (as non-executive directors), which is worth consider - ing when deciding on the structure and composition of the boards. Polish law does not currently recog - nise the concept of “piercing the corporate veil”, and attempts to introduce the concept have so far been unsuccessful. As it stands, shareholders are liable to the company only to the extent that they fail to make agreed contributions or that they receive unlawful dis - tributions, or under the general principles of tort law. A major amendment to the Commercial Companies Code came into force on 13 October 2022, changing the rules on the liability of members of the corporate bodies and introducing a regulated group concept and related holding company law. A member of the man - agement board or supervisory board is not liable for damage caused to the company when acting within the limits of a justified economic risk on the basis of information, analyses and opinions that should be tak - en into consideration in the relevant circumstances. However, this does not override the duty to act with professional due diligence and loyalty to the company, which applies to the members of the management board and supervisory board of a limited liability com - pany and a joint stock company. The right of a parent company to issue a binding instruction to a subsidiary was also introduced. How - ever, under certain circumstances, a subsidiary is entitled to refuse to carry out the instruction issued. The members of the management board, the super - visory board or audit committee and the liquidators of a subsidiary and a parent company are exempt from liability for damage caused by the execution of a binding instruction if they acted in the interest of the group. Accordingly, the liability of the parent company is correspondingly enhanced, creating the possibility of holding a parent company liable for damage caused by its binding instructions given to a subsidiary, the minority shareholders of a subsidiary or the creditors of a subsidiary. Establishment of the group and, there - fore, application of these regulations is not mandatory.
regulatory duties may also apply. 3.4 Management Structures
Under Polish law, there is a two-tier management structure. The management board manages a com - pany’s affairs and has executive directors, whereas the supervisory board (with non-executive directors) or, less commonly, the audit committee monitors its activities. Please see 3.1 Most Common Forms of Legal Entity for more details. 3.5 Directors’, Officers’ and Shareholders’ Liability Each officer of the company is obliged to act in the company’s interests and is liable to the company for any damage caused by acts or omissions in breach of the law or articles of association. Members of the corporate bodies are liable for any damage caused by lack of required diligence in the course of performance of their functions or a breach of the duty of loyalty towards the company, resulting in the damage. The members of the management board (and direc - tors of the simple joint stock company) may be jointly and severally liable for the company’s debts in terms of all their assets if enforcement against the compa - ny proves ineffective (ie, if the company’s assets are insufficient to cover the claims). However, a member of the management may be released from this liability in certain circumstances – for example, if they can prove that a petition to have the company declared bankrupt was filed in due time (or was delayed without their fault). As the burden of proof will rest entirely with the man - agement board member, it may sometimes be very difficult for the member to succeed in being released from liability. Similar rules regarding the personal lia - bility of management board members apply to taxes and certain other public charges. Finally, a breach of certain duties (eg, reporting duties) may also trigger criminal liability. In practice, the members of the management board (as executive directors) are more exposed to each type
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