Liability of Directors in Polish limited liability company

Liability of Directors in Polish LLC (limited liability company)

Being a Director of Polish Company assumes a great responsibility. Members of the Management Board in Poland shall be liable for various obligations, both civil and criminal as well as tax obligations, liabilities towards ZUS (for non-payment or payment of social security, health insurance and Labor Fund contributions in insufficient amounts) and particular liabilities referred to in many other regulations.

It is important to bear in mind that even if a certain person is simultaneously a shareholder and the Directors of the Polish company, he or she shall not be released from the liability borne by the members of the Polish Management Board. The status of a shareholder shall not release from liability borne for performing a function in the Managing Board.

The most significant are the Polish Company Law Act provisions stipulating that if enforcement against the company proves to be ineffective, the members of the Polish Management Board shall be jointly and severally liable for its obligations. This provision is designed in such a way that the creditor seeking to satisfy his claim looking to personal assets of the Management Board members of this Polish company, is only obliged to demonstrate that he has an outstanding claim approved by writ of execution (final court verdict, order to pay,  conciliation court verdict, bank enforcement title with court enforcement clause etc.) and that enforcement against the company proved to be ineffective.

Release from liability of Polish Director

However, a member of the Polish Management Board may release himself from this liability if he demonstrates that:

  • in appropriate time, a petition for bankruptcy was filed or that composition proceedings were commenced, or that
  • it is not due to his fault that the petition for bankruptcy was not filed or that composition proceedings were not commenced, or that
  • the creditor did not sustain any damage despite the fact that the petition for bankruptcy was not filed or that composition proceedings were not commenced.
  • Demonstrating only one of these conditions releases a member of the Management Board from liability

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