Auditing Committee in Polish company
In case of Polish companies where the share capital exceeds 500 thousand zlotys and, simultaneously, there are more than 25 shareholders, supervisory board or audit committee shall be created. Thus, an audit committee is not an obligatory body. Audit committees are very rare in limited liability companies and their role is replaced by audit firms in case of companies larger in size.
Tasks of Auditing Committee in Poland
In contrast to the supervisory board, the audit committee does not exercise permanent supervision over the company - it is a periodical supervisory body. Control differs from supervision in that it is based on a right to review company's activity including a right to request information and explanations, review appropriate documents of the company etc., although without a right to make binding decisions. The audit committee usually meets once a year prior to the ordinary general shareholders' meeting to (similarly to the supervisory board) evaluate the management board's report on the activities of the company and the financial report as well as the management board's conclusions concerning the division of profits or the financing of losses.
The audit committee is obliged to submit to the ordinary general shareholders' meeting a report on the results of such evaluation (in accordance with the procedure and to the extent specified for the performance of such actions by the supervisory board). The right to convene the general shareholders' meeting if the management board fails to convene it in the time stipulated as well as the right to take legal actions to repeal or to conclude the invalidity of the general shareholders' meetings' resolution are the remaining duties of the audit committee.
Relations of Auditing Committee to Supervisory Board
If the supervisory board was not created in Polish limited liability company, the articles of association may provide for expanding duties of the audit committee onto remaining activities under regular authority of the supervisory board. However, the supervisory board may not be granted (even under provisions in the articles of association) rights to represent the Polish company in an agreement between the company and the management board member or in a dispute between them. (Such rights may be granted only by the shareholders of the company to the supervisory board or a proxy elected by a way of resolution at the general shareholders' meeting.)
Members of Auditing Committee in Poland
The audit committee shall consist of at least three natural persons with full legal capacity. It may consist of shareholders alone or persons who are not shareholders of the company. However, a member of the company's management board, a holder of the commercial power of attorney, a liquidator, a manager of a branch or factory, a chief accountant or a legal advisor and those employed in the company who answer directly to the member of the management board or the liquidator may not be at the same time a member of the supervisory board. This prohibition applies also to members of the management board and liquidators of dependent companies. Members of the audit committee may be recalled at any time by a way of shareholders' resolution.
The audit committee shall adopt resolutions if its meeting is attended by at least half of its members, and all the members have been invited. The resolution shall be valid if all members of the audit committee have been notified of the contents of the draft resolution. The Polish Company Law Act provisions do not provide for the specific kind of votes required (e.g. an absolute majority or a simple majority). It s recommended to create specific provisions in this matter in the articles of association or the company's internal regulations.
The audit committee's meeting with the voting rights may be attended only by its members, although previously invited experts, advisers or members of the management board may also be present. Minutes shall be taken of the meeting of the audit committee.
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