Key Distinctions in Directors’ Financial Obligations between the United States and Polish Systems — a Five-Jurisdiction Comparison

This article is a chapter of the ebook “Shielding Directors: A Practical Guide for Foreign Directors of Polish Companies” — see the full table of contents or download the complete ebook (PDF).

Nothing clarifies a legal system like a foreign mirror. Comparing director liability in the USA and Poland, with the UK, Germany, France and Australia alongside, shows Poland sitting at or beyond the strict edge of every dimension simultaneously. We hold up five mirrors, in ascending order of distance from Poland.

Germany: strict clock, specific conduct

German law supplies the closest relative, and the instructive differences. Under § 15a of the Insolvency Code (Insolvenzordnung), managing directors must file without undue delay, at the latest within three weeks of illiquidity (Zahlungsunfähigkeit) and six weeks of over-indebtedness (Überschuldung), deadlines even tighter than Poland’s thirty days, and delayed filing is itself criminal, up to three years’ imprisonment. So far, recognisably the same family.

The divergence lies in the civil consequences. German law imposes no general liability of the GmbH managing director for the company’s debts upon failure to file. Liability is conduct-specific: the classic head (formerly § 64 GmbHG, now § 15b InsO) attaches to payments made after the onset of insolvency, obliging the director to restore those specific outflows, not to guarantee the entire creditor body. And since 2005 Germany has codified a business judgment rule (§ 93(1) AktG), modelled with acknowledged candour on Delaware. The German director who files late answers for what they did in the twilight period; the Polish director answers for everything the company owes. Same clock, different bill.

France: liability with a causation valve

France channels director liability through the responsabilité pour insuffisance d’actif (historically the action en comblement de passif): once collective insolvency proceedings open, directors, including de facto directors (dirigeants de fait), may be ordered to bear all or part of the asset shortfall, but only upon proof of three cumulative elements: management fault, damage, and a causal link between them. The filing deadline is forty-five days from cessation of payments; banqueroute supplies the criminal layer. In scale of potential exposure, France resembles Poland, the whole deficiency may land on the director. In mechanism it does not: the French judge must find that mismanagement caused the shortfall, and retains discretion over the quantum. The causation valve, absent from Article 299, is the difference between a liability regime and a guarantee regime.

United Kingdom: the fault-based archetype

Section 214 of the Insolvency Act 1986, wrongful trading, is the provision foreign textbooks usually cite as the European benchmark, and it is everything Article 299 is not. Liability requires that the director knew or ought to have concluded that there was no reasonable prospect of avoiding insolvent liquidation; it is then defeated entirely if the director took every step to minimise creditor losses; only a liquidator or administrator may sue; and the court orders such contribution “as it thinks proper,” full judicial discretion over quantum. There is no fixed filing deadline and no criminal sanction for merely wrongful (as opposed to fraudulent) trading. The system’s flexibility showed during the pandemic, when the Corporate Insolvency and Governance Act 2020 simply suspended wrongful-trading liability for extended periods to keep boards trading through the storm. One struggles to imagine the Polish legislature suspending Article 299 because times were hard; the provision exists precisely for hard times.

United States: the anti-Poland

Delaware is the control group of this experiment. North American Catholic Educational Programming Foundation v. Gheewalla (Del. 2007) settled that directors’ fiduciary duties run to the corporation and its shareholders even in the “zone of insolvency”; upon actual insolvency, creditors gain at most derivative standing, never a direct claim against the directors for the company’s debts. The business judgment rule does the rest: informed, disinterested, good-faith decisions, emphatically including the decision when and whether to file for bankruptcy, are immune from second-guessing. As the bankruptcy court in In re Midway Games (428 B.R. 303, 315 (Bankr. D. Del. 2010)) put it, directors are not liable for actions taken “in an effort to prolong the corporation’s viability, even in the face of bankruptcy.” The American director facing distress is expected to gamble for resurrection within the bounds of good faith; the Polish director who does the same is accumulating personal liability by the invoice and, possibly, committing the offence of Article 301 § 3. No single contrast in this guide matters more for an American reader’s instincts.

Australia: the engineered middle way

Australia’s regime shows a legislature consciously tuning the trade-off the other systems take as given. Section 588G of the Corporations Act 2001 imposes a duty to prevent insolvent trading, triggered by “reasonable grounds for suspecting” insolvency, closer to Poland in trigger design than the UK. But the statute then layers on calibrated relief: the § 588H defences (reasonable expectation of solvency; reasonable reliance on a competent person; non-participation due to illness), a criminal threshold requiring dishonesty, and, since 2017, the § 588GA safe harbour, shielding directors who, upon suspecting insolvency, pursue a course of action “reasonably likely to lead to a better outcome” than immediate administration, conditional on employee entitlements being paid and tax reporting current. Australia legislated a supervised middle path. Poland’s only safe harbour is the courthouse.

The panorama in one table

Read along any row and the conclusion repeats: other systems are strict somewhere; Poland is strict everywhere at once. Whether international standards endorse that severity is the question taken up in the chapter on international standards.

Read the Full Guide

This chapter is part of the ebook “Shielding Directors: Navigating Personal Liability in Times of Financial Turmoil and Insolvency — A Practical Guide for Foreign Directors of Polish Companies.”

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• 📕 Download the full ebook (PDF, 36 pages)

This article is general information, not legal advice. © Kancelaria Prawna Skarbiec

Robert Nogacki

Robert Nogacki is a Polish attorney at law (radca prawny), the founder and managing partner of Kancelaria Prawna Skarbiec (Skarbiec Law Firm), which has operated continuously since 2006.

The law is equal for everyone, but the parties rarely are: on one side stands an organization with time, money, and lawyers, on the other a person with one business, one nest egg, and one life.

Clients rarely come to him with a legal problem. They come with a problem that also has a legal side: an audit that began with a single invoice, money entrusted to someone who has disappeared, a company that has to be passed on before it is too late. Most such matters are decided long before the first letter is written, in decisions made without asking and in deadlines nobody remembered. So he begins by asking how the client got here, not what the client should have done.

He advises entrepreneurs and families from more than a dozen countries, including those whose accounts the tax office has just seized and who do not know what to do tomorrow morning. He defends them in tax audits, customs and fiscal inspections, disputes with the tax authorities, and criminal tax proceedings. He represents victims of investment fraud and Ponzi schemes. He helps families set up family foundations and plan succession, so that a life’s work outlasts a single generation.

Not every case can be won. Every case can be run so that the client knows where they stand. Since 2006 he has represented the victims in the WGI case (Warszawska Grupa Inwestycyjna, the Warsaw Investment Group), one of the longest criminal cases in the history of the Polish financial market, because some things must not be left half finished, even when they take two decades. In the case of the collapsed cryptocurrency exchange Zonda (Zondacrypto, operated by BB Trade Estonia OÜ), he represents several hundred victims in the criminal investigation conducted by Poland’s National Prosecutor’s Office and in the Estonian bankruptcy proceedings.

Kancelaria Prawna Skarbiec is listed in the rankings of Poland’s largest tax advisory firms published by Dziennik Gazeta Prawna and Rzeczpospolita, and it is a four-time recipient (2015 to 2018) of the European Medal awarded by the Business Centre Club and the European Economic and Social Committee. Robert Nogacki publishes regularly, in the press and on the firm’s website, for people who have a problem rather than a law degree, because a legal opinion the client cannot understand protects only the lawyer.

He believes that the best legal advice is the kind that means the client never has to appear in court.