Last updated: 05.05.2025

Management contract in Poland

A management contract is specific type of unnamed agreement concluded between business owner and an individual (manager). It represents a form of collaboration between a company and a qualified person responsible for managing business operations.

Under a management agreement, the manager agrees to professionally manage the company’s affairs. The manager may, but is not required to, be part of the company’s governing body (e.g., a member of the management board of a limited liability company).

It is important to note that there is no specific legal framework defining the essential elements of this type of contract in Poland. Although the Polish Civil Code does not explicitly regulate employment based on a management contract, the provisions applicable to a contract of mandate (specifically Article 750 of the Civil Code) apply accordingly.

This lack of codified structure often leads to an emphasis on best practices and a carefully prepared initial draft to mitigate risks associated with high risk contractual engagements.

Since a management contract is a civil law agreement, the provisions of the Polish Labor Code does not apply. The contract terms and scope of responsibilities are freely determined by the parties involved.

Legal Basis of management contracts in Poland

There is no formal statutory definition of a management contract. However, according to the Polish Supreme Court’s resolution of June 17, 2015 (III UZP 2/15), this type of agreement is characterized by the transfer of operational control from the business owner to the manager, granting the latter autonomy in both legal and factual matters related to contract management.

This autonomy includes the freedom to choose management methods, use professional experience, leverage existing business contacts, apply organizational skills, and utilize personal reputation and image. Such independence is a key component and an important aspect of successful contract management, especially when engaging employees or navigating foreign direct investment conditions.

The scope of the contract covers various managerial functions, which should be clearly defined in the written agreement. To avoid human error and reduce time consuming activity, many companies use contract management software or digital tools to store and retrieve the recorded management contract instead of relying on a traditional filing cabinet.

What are the types of management contracts in Poland?

A management contract is one of three primary options for employing senior management in Poland. These include:

• Management contract,
• Employment contract for a manager,
• Corporate resolution on remuneration for performing corporate duties (in the case of performing functions in the management bodies of capital companies).’

Each of these may be concluded independently or combined depending on the structure of two businesses working together.

For example, a manager may receive compensation under both an employment contract (for performing specific management tasks) and a corporate resolution (for performing specific governance tasks).

Management contract – advantages

A management contract is the most flexible option for determining rights and obligations, as it is not governed by the mandatory provisions of the Polish Labor Code. The parties can freely negotiate and customize the agreement. The manager operates independently, without being subject to direct supervision or regular check-ins.

Employment contracts provide more protection to the manager but less flexibility. A corporate resolution offers flexibility but only applies to corporate duties, not project management or operations.

Key features of a management contract in Poland

In Poland, typical features of a management contract are:

• the manager’s independence in performing contractual obligations, and
• the purpose of the contract, which is to transfer control of the company to the manager, who makes management decisions independently.

Manager’s Remuneration in Poland

The manager’s remuneration under a management contract typically consists of two elements:

• A fixed salary
• A variable component tied to company performance and business revenue

Unless agreed otherwise, the manager bears full liability for any damage caused. This liability is based on the principle of fault and covers both actual losses and lost profits.

However, the contract terms may limit this liability to a predetermined amount or to damages resulting from intentional misconduct.

Management contracts are usually accompanied by confidentiality and non-competition clauses or agreements.

Management contract and social security and taxes in Poland

When it comes to social security contributions and income tax advances, the same rules apply to management contracts as to commission contracts.

A management contract constitutes income from personal activity and is taxed according to the tax scale (12% basic rate, 32% when exceeding the tax threshold of PLN 120,000). An income tax payer who has concluded a contract with a manager is entitled to a monthly deduction of flat-rate income-related costs and social security contributions from their income.

A management contract is not a business activity within the meaning of income tax regulations, therefore the 19% flat tax rate or lump sum tax on recorded income does not apply to remuneration under a management contract.

At the same time, the conclusion of a contract under which an entrepreneur performs activities under a management contract does not deprive him of the right to apply lump-sum taxation to his business activity not covered by the management contract.

In a situation where a management contract is concluded with an entrepreneur who additionally generates income from business activity, there may be a concurrence of social security titles.

Duration and termination of the manager’s contract

A management contract may be concluded for a fixed or indefinite period. Unless the parties agree otherwise in the initial draft, either party may terminate the agreement without notice, enabling early termination.

This flexibility enhances responsiveness within the broader contract management process and is vital in adapting to changing operational needs or shifting contract terms.

Management contract – key information

FAQ – Management Agreement in Poland