POLAND Law and Practice Contributed by: Rafał Celej, Arkadiusz Klejnowski and Karolina Piotrowska-Andryszczyk, Kondracki Celej
Day-to-day management remains with the management board, but strategic oversight by investors through the mechanisms above is a recognised and expected feature of Polish VC transactions. 3.7 Contractual Protection Key representations and warranties are provided by the company and often also by the founders. They typically cover: • authority and corporate structure; • cap table and share capital accuracy; • IP ownership; • compliance with law and regulatory matters; • tax matters; • contractual relations; • employment and social security compliance; and • absence of undisclosed liabilities or litigation. Founders and the company, when providing representations and warranties, often assume liability on a guarantee basis – meaning they are liable regardless of fault – subject to con - tractually agreed caps. Such liability is typically capped at the amount of the investment round and time-limited, with survival periods generally ranging from 24 to 36 months following com - pletion. Certain fundamental warranties, such as those relating to title, authority and tax matters, may survive for extended periods, commonly up to six years. Where multiple parties provide representations, liability is frequently structured as joint and several, allowing the investor to pursue claims against any or all of the warrantors for the full amount of any loss.
Covenants and undertakings often include: • non-compete and non-solicitation obligations; • information undertakings; • a requirement for founders to continue work - ing full-time or to serve as members of the management board; and • restrictions on dividends and shareholder loans. While formal W&I insurance is rare in Polish VC, the framework for contractual recourse is well developed and increasingly standardised. 4. Government Inducements 4.1 Subsidy Programmes Please see 2.4 Particularities . Government- backed VC funds play a central role in the Polish VC market and are highly active across all stages of company development. One of the key frameworks currently in opera - tion is the FENG programme, funded through national and EU structural funds. It is designed to co-finance VC funds that invest in innovative Polish SMEs and early-stage companies. The main features include the following: • capital commitments to VC funds are made by PFR Ventures, acting on behalf of the PFR; • the public investor typically participates under the same terms as private LPs, with pari passu investment conditions; • investment amounts vary, but public capital generally contributes between 50% and 80% of a fund’s total commitments; • eligible funds must invest in companies registered or operating in Poland that have a
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