The Inheritance You Never Accepted
There is a mechanism in corporate law that defies the basic intuition of justice: liability for other people’s debts.
You become a board member. The company has a history—contracts, obligations, tax settlements. This history existed before you crossed the threshold of the conference room with your appointment resolution in hand. You did not negotiate those contracts. You did not make those decisions. You did not sign those documents.
And yet—you may be held liable for them.
Poland’s Supreme Administrative Court confirmed this in 2023: a board member is liable for obligations that became due during their tenure, even if they arose earlier. A short period in office provides no exemption. Ignorance provides no exemption. Passivity provides no exemption.
By accepting the position, you take on a past you do not know—and a future you do not control.
- Our eBOOK – Shielding Directors: Navigating Personal Liability in Times of Financial Turmoil and Insolvency.
The Psychology of Appointment
There is something psychologists call the halo effect—the tendency to perceive a situation through its most visible features while overlooking what is hidden.
A board position has a strong halo. Prestige. Power. Compensation. A seat at the table where decisions are made. These are the visible things—and they shape perception.
Subsidiary liability for tax obligations has no halo. It is technical, abstract, remote. Who reads Article 116 of the Tax Ordinance when accepting a nomination? Who analyzes the company’s obligation structure before signing the commercial register documents?
Most people don’t. Most people see the halo—and only later, sometimes years later, discover what was in the shadow.
The Mechanics of the Trap
The law constructs board member liability like a trap with a delayed trigger.
Step one: you assume the position. At this moment, nothing happens. No one arrives with claims. No one mentions arrears.
Step two: you run the company. Perhaps well, perhaps poorly—irrelevant. What matters is that obligations exist and become due.
Step three: you leave. Another company, another role, a new chapter. The company remains behind you.
Step four: the company fails. Enforcement against its assets proves fruitless. And then—perhaps years later—a decision arrives transferring liability to you. To your personal assets. To your house, your savings, your future.
The clock began ticking the moment you signed the appointment documents. But you didn’t hear it until it was too late.
The Paradox of the Good Manager
There is a paradox in economic criminal law that affects honest managers more than dishonest ones.
The company has financial problems. Not all obligations can be paid. As a responsible board member, you do what seems right: you pay the employees, because they have families. You pay key suppliers, because without them the company won’t survive. You defer payment to the tax office—because the office can wait, and people cannot.
And you have just committed a crime.
Article 302 of the Penal Code: whoever, facing insolvency, pays only selected creditors to the detriment of others is subject to imprisonment of up to two years.
Your decency—your concern for employees, your responsibility to partners—becomes the basis for criminal charges. The system punishes you for being human in a situation that demands you be a machine.
And if you frustrate the satisfaction of a creditor? Article 300: up to three years. Harm to multiple creditors? Up to eight.
Ignorance as Guilt
The law demands of a board member something philosophers call counterfactual knowledge—knowledge of what you don’t know that you don’t know.
You should have known the company’s financial situation. You should have known about the obligations. You should have foreseen the problems.
The fact that you didn’t know is not an excuse. It is an accusation.
Cognitive psychology describes hindsight bias—the tendency to perceive past events as predictable, though at the time they occurred they were not. Courts and tax authorities succumb to this bias systematically. Looking at a company’s collapse, they see a chain of events that—in retrospect—seems obvious. And they ask: why didn’t you react?
The answer “because I didn’t know” sounds weak. Even when it’s true.
Time as Enemy
There is a dimension of board member liability that makes it particularly dangerous: time.
Tax obligations become statute-barred after five years. But the limitation period can be suspended, interrupted, extended. In practice, claims can arrive after a decade.
Over ten years, your life changes. You change jobs, apartments, perhaps countries. The company where you served as a board member for eighteen months becomes a distant memory.
And then a letter arrives. From a tax office whose name you don’t remember. Regarding a company that long ago ceased to exist. For an amount that is a multiple of what you earned in that role.
The past returns. And demands payment.
Defense Strategy—Before Taking Office
The best defense against liability is preventive defense—before liability arises.
An audit before appointment is not a formality. It is verification of what you are getting into. What is the company’s actual financial situation? What are the obligations—visible and hidden? Are there tax arrears? Are there lawsuits? Did someone before you leave under suspicious circumstances?
These questions sound uncomfortable. Asking them may appear to signal distrust. But the alternative is blind trust—and the consequences that come when eyes open.
The agreement with the company should contain safeguards. Access to information. Decision-making procedures. D&O insurance. This is not paranoia. It is professionalism.
Defense Strategy—During Tenure
Once you are on the board, defense requires documentary discipline.
Every decision—recorded. Every analysis—preserved. Every warning about risk—documented.
If you see financial problems, react—formally, in writing, with a date. If you propose solutions that are not adopted, document your objection. If the situation requires filing for bankruptcy or restructuring—file. Because filing at the proper time is one of the few paths to release from liability.
“At the proper time”—these three words decide everything. One day too late can mean years of consequences.
Defense Strategy—After Departure
Leaving the board is not the end. It is the beginning of a period during which you must remain vigilant.
Documentation from your tenure—keep it. Correspondence—archive it. Evidence of what you knew and when—secure it.
If a letter arrives initiating proceedings on transfer of liability—do not ignore it and do not panic. There are grounds for defense: demonstrating the company’s assets, absence of fault in failing to file for bankruptcy, statute of limitations.
But these grounds must be known, and you must know how to use them.
What We Do
We conduct audits of companies before new board members take office. We identify risks that are not visible in official documents.
We draft agreements and regulations that protect board members’ interests—before problems arise.
We advise in crisis situations: when a company is heading toward insolvency, when decisions must be made that may have criminal consequences, when the window for filing for bankruptcy is closing.
We represent current and former board members in proceedings on transfer of liability—before tax authorities and before courts.
We defend in criminal cases arising from service on boards—because the line between a difficult business decision and a crime is thinner than anyone would like to admit.
In Closing
A board position is not a title. It is liability—legal, financial, criminal. Liability that can pursue you for years after you have forgotten the company’s name.
The system is constructed so that ignorance does not protect. So that passivity is guilt. So that good intentions can be the basis for charges.
It is possible to function safely in this system. It is possible to know the risks and manage them. It is possible to make decisions consciously, with safeguards, with documentation.
But you have to know how.
Most people find out too late. Better to know sooner.
Further reading
Board Member Liability for Statute-Barred Tax Obligations of a Limited Liability Company
Personal Liability of Corporate Directors for Tax Obligations
Lawsuit Against Management Board Member of Polish LLC: How to Sue Directors for Company Debts
Defensive Strategies and Exculpatory Grounds – Personal Liability of Management Board Members
