Claim to repeal of shareholders’ resolution of a limited liability company

Legal grounds for repealing the resolution of the shareholders of a limited liability company by the court

Pursuant to the provisions of Polish law, a resolution of the shareholders of a limited liability company may be repealed by the court if:

1. a) is contrary to the articles of association or good manners, and
2. b) harms the interests of the company or aims to harm a shareholder.

Good manners are decent conduct that takes due account of the various interests that serve everyone in the company. The concept of good manners refers to the mercantile honesty directed outside the functioning of the company
(in relation to other participants of the business transaction), as well as to internal relations in the company, including relations between shareholders.

In the jurisprudence it is assumed that, as a rule, a shareholders’ resolution adopted for or with the intention of harming a minority shareholder violates the moral norm in force in the society, which is manifested by the obligation to behave in a decent manner and thus is contrary to good manners.

A breach of good manners will be a breach of the principles of loyalty and mercantile honesty, the observance of which by all shareholders is their absolute duty.

It is contrary to good commercial practices to abuse the position of the majority shareholder in order to obtain disproportionate personal benefits at the expense of the company’s property or the property of minority shareholders.

On the other hand, a resolution of shareholders is against the interests of the company when it reduces the assets, limits profit, damages the good name of the company’s bodies, protects the interests of third parties at the expense of the company’s interests, or threatens the company’s well-being.

In turn, harm to a shareholder most often consists in adopting resolutions that are adopted in the interest of the majority shareholders, and their effect is causing damage or depriving the minority shareholder of benefits.

An example may be, for example, a resolution on retaining profit in the company and not allocating it for dividend payment, while at the same time purposing it for the payment of bonuses to members of the management board who are majority shareholders at the same time.

A group of persons authorized to file a lawsuit to repeal a resolution of shareholders of limited liability company

The right to bring an action to repeal a resolution of shareholders is vested in:

1) the management board, supervisory board, audit committee and their individual members;

2) a shareholder who voted against the resolution and, after its adoption, demanded that the objection be recorded in the minutes;

3) a shareholder who is unreasonably prevented from participating in the shareholders’ meeting;

4) a shareholder who was not present at the meeting, but only in the event of a defective convocation of the shareholders’ meeting or adoption of a resolution on a matter not included in the agenda;

5) in the case of a written vote, a shareholder who was omitted during the vote or who did not agree to a written vote or who voted against the resolution and, having received information about the resolution, raised an objection within two weeks.

Time limit for filing a claim

Claim to repeal a resolution of the shareholders of a limited liability company shall be submitted within one month from the date of receipt of the information on the resolution, but not later than within six months from the date of adopting the resolution.

Securing the claim

Claim to repeal a resolution of the shareholders of a limited liability company may be secured, in particular, by submitting an application for the suspension of registration proceedings until the case is finally resolved.

In the event that the shareholders of a limited liability company undertake a resolution that is inconsistent with the articles of association or good manners and is against the interests of the company or is aimed at harming a shareholder, it may be challenged against to the court by way of a claim to repeal the resolution.