How to do Business Investors' Guide Poland - Polish Agency for ...

The provisions of the Code of CommercialPartnerships and Companies, Polish practiceand jurisprudence clearly define and separatethe rights and obligations of each body of acompany. Polish corporate governance isbased on a two-tier system and a cleardemarcation of responsibilities between theexecutive - Management Board, and thenon-executive - Supervisory Board. Anexception to this system is a EuropeanCompany regulated under the EuropeanEconomic Interest Grouping and EuropeanCompany Law, which provides for thepossibility of choosing between one-tier andtwo-tier corporate governance.The authority of a Management Board cangenerally be described as conducting businessand representing the company in dealingswith third parties. Only a natural person withfull capacity to perform legal actions canserve as a Management Board member. TheManagement Board may consist fully or partiallyof foreign nationals.The Polish Code of Commercial Partnershipsand Companies provides for an obligatorySupervisory Body for joint-stock companiesand limited liability companies with a sharecapital of more than PLN 500,000 and morethan 25 shareholders.The Supervisory Board exercises ongoing supervisionover all areas of a company’s activity. TheBoard may not give any binding instructions tothe Management Board on running the company’sbusiness. The authority it has includes theassessment of the financial statements and theManagement Board’s motions on the distributionof profit or the method in which losses areto be covered, as well as submitting annualreports on its activities to the Shareholders?Meeting. The Board inspects the company’sdocuments, requests reports and explanationsfrom the Management Board and employeesand audits the company’s assets. A company’sArticles of Association can extend the powersof a Supervisory Board, specifically by providingthat the Management Board must obtain theconsent of the Supervisory Board before performingthe activities designated in theArticles.The right to control the company is vested inthe shareholders, unless the Articles ofAssociation provide for a Supervisory boardand simultaneously limit the powers of theshareholders.1.2.1.2. Liability in a limited liabilitycompanyResponsibility for the liabilities of a “companyin organisation“ is borne jointly and severallyby the company and the persons acting on itsbehalf. A shareholder of a “company inorganisation“ is jointly and severally responsiblewith these persons for the company’s liabilitiesup to the amount of the unpaid contributionto the shares to which he subscribed.As in the case of the shareholders,Management Board members, are not liablefor the company’s liabilities. An exception tothis principle is the personal joint liability ofthe Management Board members and thecompany for the company’s liabilities whenenforcement against the company provesineffective. Management Board members canrelease themselves from this liability if theyprove one of the following circumstances:that they punctually filed a motion to declarebankruptcy, or if composition proceedingshave been initiated, or if they have not filedfor bankruptcy, or composition proceedingshave not been initiated through no fault oftheir own or a creditor did not incur anyinjury from the failure to file a motion todeclare bankruptcy or failure to initiatecomposition proceedings.Moreover, Management Board members arejointly liable with the company to creditors in12