A brief overview of the regulations surrounding directors’ responsibilities in Poland.
Chapter 5
There are systems where personal responsibility of director is triggered only if he committed a serious breach of their duty of care which contributed to the company’s insolvency. This is not the case of Poland. In our legal system the transfer of financial responsibility to directors is automatic, if directors of insolvent company fail to file for bankruptcy. The purpose of such regulation is to “compel” board members to fulfill their obligations arising from relevant provisions regulating insolvency and restructuring proceedings. As a result, the regulation stipulates that in a situation where board members have timely filed for insolvency or restructuring proceedings, and a tax creditor has not been satisfied, they are still not held accountable for tax arrears.
The liability for the company’s obligations arises ex lege towards the creditor in the event of unsuccessful enforcement, when there is no obligational relationship between the creditor and a member of the management board.
Directors will not be exonerated from personal responsibility if a board decision is adopted, or they actions were authorized or ratified by the general meeting of shareholders.
Members of the board are responsible regardless of whether they actually received any financial benefits (for example, in the form of remuneration for serving as a board member or for being in an employment relationship with the company as a result). Even performing this role without remuneration does not exempt from responsibility, as there is no limitation based on the benefits received during the tenure of this position.
The responsibility lies with the individual holding the position of a board member, regardless of the relationship with the company (employment contract, managerial agreement, or maybe pure appointment with not contract of whatsoever nature).
The responsibility of directors is of subsidiary nature. The essence of subsidiary liability lies in the fact that the person assuming responsibility may be held liable in subsequent order, that is, only after the ineffectiveness of enforcement measures against the main debtor has been established.
There is a lot of discussion regarding how the ineffectiveness of enforcement measures should be proven. One obvious solution is the final decision to terminate execution proceedings due to the lack of assets of the debtor. However, let me quote a judgment related to tax debts which also allows for other means:
“When enforcement actions against the taxpayer prove to be wholly or partially ineffective, it is possible to issue a tax liability decision against a board member. Without establishing the ineffectiveness of enforcement measures, it is not possible to issue a tax liability decision against a board member. Nevertheless, the inefficacy of enforcement proceedings as outlined in Article 116 of the Tax Ordinance may not necessarily be determined solely by a final decision to terminate execution proceedings due to the lack of assets of the debtor. Other actions taken by the enforcement authority can also contribute to this determination, even if they do not result in a formal decision to cease execution proceedings. However, these actions must clearly indicate that the enforced claim cannot be satisfied from any part of the company’s assets” (as per the judgment of the Supreme Administrative Court dated April 5, 2022, case no. III FSK 4880/21, Legalis).
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.
