SERVING ON A MANAGEMENT BOARD IN POLAND

Foreign nationals are appointed to the management boards of Polish subsidiaries

every day — often while continuing to live abroad and without speaking Polish.

Polish law does not treat them any differently from local directors: a member of the

management board (zarząd) of a Polish limited liability company (sp. z o.o.) or

joint-stock company (S.A.) is personally exposed to civil, tax, criminal and

administrative liability, regardless of nationality, place of residence, remuneration

or actual day-to-day involvement in management.

This exposure often surprises directors coming from common-law jurisdictions.

There is no broad “business judgment rule” shield of the Anglo-American type:

Polish law offers only a narrower , codified safe harbour , and in several areas

(tax arrears, company debts, fiscal offences) liability attaches automatically by

operation of law unless the director proves specific defences. The burden of proof

is, as a rule, on the director .

Personal liability of management board members — a practical guide for foreign

directors of Polish companies. Three warnings before you accept the mandate

Language and geography are no defence. The Polish Supreme Court has

expressly held that not knowing the Polish language does not excuse a foreign

director. Neither is a foreign residence. You are deemed to understand every

document you sign, and expected to carry out your duties regardless of the

place of residence.

Titles do not protect you. An internal division of duties (e.g.“I only look after

sales, the CFO handles finance”), including serving as purely formal

“figurehead” seat, do not eliminate statutory liability towards creditors and tax

authorities.

Enforcement is mandatory. For tax and social security arrears the authorities

are obliged — not merely entitled — to pursue board members personally once

enforcement against the company fails.

1. 1 Liability towards the company for damage (Art. 293 / Art. 483 CCC)

A board member who causes damage to the company by an act or omission

contrary to the law or the articles of association is liable to the company, unless he

or she is not at fault. Four conditions must be met: unlawfulness, damage (actual

loss and lost profits), fault and an adequate causal link. Critically, fault is presumed

— it is the director who must prove that due diligence was observed

(Supreme Court, II CK 186/04). The standard of care is a professional

one: heightened diligence, adequate expertise, properly prepared decisions and

action exclusively in the company’s interest.

Safe harbour ( codified business judgment rule ): a director does not breach the

duty of care if, acting loyally towards the company, he or she acts within the limits

of justified economic risk, including on the basis of information, analyses and

opinions that should in the circumstances be taken into account (Art. 293 § 3 / Art.

483 § 3 of the Polish Commercial Companies Code – CCC). Decisions taken

without any risk analysis fall outside this protection — see the bank lending case

in section 4.

Approval does not protect: consent of the supervisory board or instructions from

shareholders do not release a director from liability for a transaction (Court of

Appeal in Kraków, I ACa 1469/16); the general meeting and supervisory board may

not issue binding instructions to the management board. Claims become time-

barred three years from the company learning of the damage, and no later than five

years from the event.

1.2 Personal liability for the company’s debts (Art. 299 CCC — sp. z o.o.)

If enforcement against a limited liability company proves ineffective, its board

members are jointly and severally liable for the company’s obligations with their

entire personal assets, including litigation costs and interest. This is the single most

litigated directors’ liability provision in Poland. A director may escape only by

proving that:

(i) a motion for bankruptcy was filed (or restructuring was opened / an

arrangement with creditors was approved by the court) in time;

(ii) the failure to file was not his or her fault; or

(iii) the creditor suffered no damage despite the failure. These defences are

evidence-heavy — contemporaneous documentation of the company’s financial

standing is decisive. Lack of the directors’ fault is understood very restrictively –

internal divisions of labor in the board are no defense, neither are holidays or

(usually) illness. In an S.A. there is no direct equivalent, but public-law liability

(below) applies in full.

1. Civil liability

The bankruptcy clock: the petition must be filed within 30 days of the company

becoming insolvent (loss of liquidity or balance-sheet over-indebtedness —

Art. 21 Bankruptcy Law). Directors routinely misjudge the moment insolvency

arose; in practice, filing early is the safe error . Missing the deadline simultaneously

triggers civil liability in sp. z o.o. (Art. 299 CCC), as well as tax (Art. 116), criminal

(Art. 586 CCC) and disqualification consequences discussed below.

1.3 T ax and social security arrears (Art. 116 T ax Ordinance)

Board members of both the sp. z o.o. and the S.A. are liable with all their personal

assets for the company’s tax arrears and unpaid social security contributions that

fell due during their term of office, if enforcement against the company is wholly or

partly ineffective. Defences partly mirror Art. 299 CCC: a timely bankruptcy

petition and absence of fault in not filing. There is an additional defense of

identifying company assets from which the arrears can be satisfied to a significant

extent.

2. Criminal liability

Polish criminal law contains a dense net of offences aimed specifically at company

managers. Prosecutions are typically initiated by the company itself, its

shareholders, the trustee in bankruptcy, the tax authorities or the financial

regulator . The key offences:

Offence Legal basis Sanction

Mismanagement (acting

to the company’s

detriment)

Art. 296 Criminal

Code

Up to 5 years’ imprisonment; up to 8 years if for personal gain; up

to 10 years if damage exceeds PLN 1,000,000

Managerial bribery

(active and passive)

Art. 296a Criminal

Code

Up to 5 years’ imprisonment; leniency for voluntary self-

reporting before detection

Announcing or

presenting false data to

company organs, courts

or auditors

Art. 587 Commercial

Companies Code Up to 2 years’ imprisonment (up to 1 year if not intentional)

Accounting offences

(unreliable books, missing or false financial statements)

Art. 77 Accounting

Act Fine up to approx. PLN 1,080,000 and/or up to 2 years’

imprisonment

Disclosure or use of trade

secrets causing serious

damage

Art. 23 Unfair

Competition Act

Fine, restriction of liberty or up to 2 years’ imprisonment

Fiscal offences of the

company (unpaid taxes, defective invoices, unreliable books)

Art. 9 § 3 Fiscal

Criminal Code

Board member liable as perpetrator – fines, restriction or

deprivation of liberty

Failure to file for

bankruptcy in time

Art. 586 Commercial

Companies Code

Fine, restriction of liberty or up to 1 year’s imprisonment

Key features. Under Art. 296 of the Polish Criminal Code even exposing the

company to imminent danger of significant damage (over PLN 200,000)

is punishable. An unfavourable outcome alone is not a crime — what matters

is whether the decision was preceded by a reliable risk assessment. Voluntary full

repair of the damage before criminal proceedings begin excludes punishment.

Under Art. 587 CCC, negligence is enough — signing and publishing financial

documents without verification can itself be an offence. Under fiscal criminal law

(Art. 9 § 3 of the Polish Fiscal Criminal Code), the person who actually deals with

the company’s economic and financial affairs answers for the company’s tax

offences as perpetrator — even without handling the bookkeeping personally.

Disqualification. A final conviction for defined economic offences (bribery,

offences against property, business dealings, documents, money and securities,

or Arts. 587–587², 590–591 CCC) automatically bans the person from serving

as a board member , by operation of law, for 5 years from the judgment becoming

final (Art. 18 § 2 CCC). Independently, a criminal court may prohibit holding

specified positions for 1– 15 years, and such a ban can even be imposed for the

duration of the proceedings

3. Administrative and regulatory liability

Financial supervision (KNF). In regulated sectors (banks, insurers, listed

companies, investment firms), the Polish Financial Supervision Authority can act

directly against individual board members: fines (e.g. for bank management board

members up to PLN 21,312,000 under Art. 141 of the Banking Law), a demand that

the supervisory board remove a director (Art. 22d of the Banking Law), suspension

from office (Art. 138), public warnings, negative “fit and proper” assessments

blocking an appointment, and criminal complaints. Sanctions may be imposed

even after the mandate has ended, if the breach occurred during it.

Competition authority (UOKiK). A manager who intentionally allows the company

to breach the prohibition of anti-competitive agreements may be fined up to

PLN 2,000,000 personally (Art. 106a Competition and Consumer Protection Act),

in the same decision that fines the company. Decisions of the KNF and UOKiK are

appealable (re-examination, then the administrative courts / competition court)

4. Lessons from real cases

Bank lending without risk analysis — Art. 296 CC conviction

Managers of a bank repeatedly approved high-value loans without a reliable

assessment of creditworthiness, with illusory collateral whose value was never

verified, bypassing prudential procedures. The court held that the “justified

economic risk” defence failed because the risk was not based on any reliable

analyses or data; the intent to generate profit or maintain business relationships

was irrelevant. The managers were charged under Art. 296 § 1 of the Criminal

Code (Court of Appeal in Poznań, 9 May 2019, II AKa 255/18). Lesson: the safe

harbour protects only analysed risk, not optimism.

GetBack S.A.

— regulator fines a former board member personally

In August 2021 the KNF fined a former management board member of GetBack

S.A. between PLN 65,000 and PLN 80,000 for gross breaches of the company’s

periodic reporting obligations (unpublished half-year , quarterly and annual reports

for 2017–2018). The fines were imposed after he had left office. Lesson: resignation

does not close the file — reporting failures follow the individual.

False statement on a capital increase — Art. 587 CCC conviction

A CEO of an sp. z o.o. certified an untrue management board statement on a PLN

760,000 capital increase and used it in registry-court proceedings. He was

convicted under Art. 587 CCC in conjunction with document offences of the

Criminal Code and received a suspended prison sentence and a fine.

Lesson: routine corporate filings carry criminal risk if the underlying data is untrue.

Supervisory sign-off is no defense

The managers of a company where held liable for damage to this company

resulting from selling the property below its market value, and supervisory board’s

approval of a transaction did not release the directors from liability

(CA Kraków, I ACa 1469/16). Lesson: supervisory sign-offs do not transfer your

personal responsibility.

5. Checklist for the foreign director

Before accepting the mandate

Financial due diligence: current liquidity, over-indebtedness test, ageing of

payables, existing tax/social security arrears and pending inspections.

Review the articles of association: required corporate approvals,

representation rules, formal division of competences between board

members.

Check the company’s filing discipline: financial statements filed with the

court, tax returns and periodic reports up to date.

D&O insurance: confirm it exists, covers you personally (including Side A

cover if the company cannot indemnify), with adequate limits for Poland.

Negotiate an indemnification agreement with the company and/or

shareholders (risk-allocation clauses).

Regulated sector: verify “fit and proper” requirements (KNF assessment)

before appointment.

No disqualifying convictions (Art. 18 § 2 CCC) — also check equivalents

affecting group appointments.

While in office

Monitor solvency at least monthly; know the date the 30-day bankruptcy

clock could start.

Document every significant decision: analyses, external opinions, board

minutes — this is your evidence of “justified economic risk”

Never sign documents you do not understand; obtain certified translations

of key corporate, tax and financial documents.

Ensure financial statements are prepared, audited and filed on time; verify

taxes and social security contibutions are actually being paid, not merely

booked.

Disclose conflicts of interest and abstain from voting on them (Art. 377

CCC); obtain company consent for any competitive activity (Art. 380 CCC).

Supervise delegated areas — delegation does not remove liability; react to

red flags (including supervisory board signals) in writing.

Protect trade secrets during and after the mandate.First, treat documentation as your primary insurance policy: in nearly every liability regime described above, the director who can produce contemporaneous

analyses, minutes and expert opinions wins, and the director who cannot, loses.

Second, build a personal protection package before problems appear: D&O

insurance reviewed by counsel, an indemnification agreement, a formal division of

competences reflected in the articles, and professional advisors (legal, tax, audit) for decisions outside your expertise.

Third, keep a compliance calendar for Polish filing deadlines (financial statements,

CIT /V A T , registry updates, beneficial-owner register) and insist on monthly

management information sufficient to assess solvency.

Fourth, if the company’s finances deteriorate, seek advice immediately —

the 30-day window for a bankruptcy petition is the hinge on which civil, tax and

criminal exposure turns. Filing early is the safe error .

When leaving

Consider if the bankruptcy motion should be filed, even if it would be against

shareholders’ wishes – you can be potentially liable for arears, not them.

Resign effectively, with a proper addressee and form (counterintuitively, you

should resign to other board members, not shareholders, and there are

special procedures for the last/only board member).

Ensure prompt deregistration from the National Court Register , and retain

copies of documentation evidencing the company’s condition at your

departure.

6. Our recommendations

Our client was held to personal liability as a member of the management board

due to the Company’s refusal to repay funds from European Union grants.

Despite the dispute, our law firm succeeded in securing full insurance coverage

for the client (D&O)

7 . From our practice

We defended a foreign board member of a Polish subsidiary of a tech company

from personal liability for tax arrears and social security contributions exceeding

PLN 1,000,000. Our client had served on the board for several years, did not

reside in Poland and was not involved in the day-to-day financial management of

the company. We successfully demonstrated that our client had acted on

information that should have been reliable, and that upon obtaining actual

knowledge of the company’s situation he took appropriate action without delay.

We advised a management board member of a regulated financial company

facing simultaneous civil liability claims under Art. 293 of the CCC and

administrative proceedings initiated by the financial regulator . We successfully

demonstrated that our client had acted within the limits of justified economic

risk, supported by appropriate analyses and external opinions. Both the civil

claims and the regulatory proceedings were resolved without adverse findings

against our client