A member of the Management Board of a limited liability company is responsible in Poland for all its debts (towards private individuals – Article 299 of the Code of Commercial Companies and in respect of taxes – Article 116 of the Tax Ordinance) with all its assets. This results from the following regulations. A board member may be relieved of this responsibility if, for example, he files for bankruptcy of the company in due time (30 days from the date of the company’s insolvency). A member of the management board may also be held criminally liable for failure to file a petition for bankruptcy (Article 586 of the Code of Commercial Companies).
Article 299 of the Code of Commercial Companies
- 1. If the execution against the company proves ineffective, members of the management board shall be jointly and severally liable for the company’s liabilities.
- 2. A management board member may be discharged from the liability referred to in § 1 above if he proves that a petition in bankruptcy was filed on time or that at the same time an order was issued to open restructuring proceedings or to approve an arrangement in proceedings to approve an arrangement, or that the failure to file the petition in bankruptcy occurred through no fault on his part or that, despite the failure to file the petition in bankruptcy or failure to approve an arrangement in proceedings to approve an arrangement, a creditor suffered no damage.
- 3. The provisions of § 1 and 2 above shall not prejudice the provisions whereby further liability of members of the management board is envisaged.
- 4. The persons referred to in § 1 shall not bear liability for failing to file a petition in bankruptcy when enforcement is being carried out by a receiver or by the enterprise being sold pursuant to the Code of Civil Procedure if the requirement to file a petition in bankruptcy arose during the enforcement.
Article 586 of the Code of Commercial Companies
Any person who, while acting in the capacity of a member of the management board or a liquidator of a commercial company, fails to file a petition in bankruptcy of the commercial company despite the occurrence of circumstances which give grounds for bankruptcy of the company or partnership under legal regulations
– shall be liable to a fine, penalty of restriction of freedom or imprisonment of up to one year.
Article 116 of the Tax Ordinance
- 1. Responsibility for the tax arrears of a limited liability company, limited liability company in the process of being incorporated, joint stock company or joint stock company in the process of being incorporated is jointly and severally borne by members of the company’s management board with their entire property, if enforcement against the company’s property proved to be entirely or partly ineffective, and if a member of the management board:
1) has not demonstrated that:
- a) in due time a petition for bankruptcy was filed, or restructuring proceedings within the meaning of the Act of 15 May 2015 – Restructuring Law (Journal of Laws of 2017, item 1508 and of 2018, items 149 and 398) were commenced, or a composition was approved in the proceedings on composition approval referred to in Act of 15 May 2015 – Restructuring Law, or
- b) failure to file a petition for bankruptcy was not attributable to them;
2) does not reveal the company’s property that could satisfy the majority of the company’s tax arrears through enforcement.
- 1a. If the obligation to file a petition for bankruptcy arose and existed only when enforcement was carried out by receivership or by disposal of enterprise pursuant to the provisions of the Code of Civil Procedure, it is assumed that the failure to file the petition for bankruptcy was without any fault on the part of the management board member referred to in § 1.
- 2. Responsibility of members of a management board covers tax arrears on account of the liabilities whose due date expired in the period when they acted as members of the management board, and the liabilities listed in Articles 52 and 52a, incurred when they acted as members of the management board.
- 2a. Responsibility for tax liabilities incurred, pursuant to separate provisions, after the liquidation of the company, for tax arrears under tax liabilities whose due date expired after the company’s liquidation, as well as for the arrears listed in Articles 52 and 52a that arose after the company’s liquidation, rests with the persons who acted as management board members as at the moment of liquidation. Article 115 § 4 shall apply accordingly.
- 3. If a limited liability company in the process of being incorporated or a joint stock company in the process of being incorporated does not have a management board, responsibility for the company’s tax arrears is borne by its attorney or by its partners, if no attorney has been appointed. The provisions of § 1 and 2 apply accordingly.
- 4. The provisions of § 1-3 also apply to former members of the management board and former attorneys or partners of a company in the process of being incorporated.
- 5. Tax responsibility referred to in § 3 and 4 shall be accordingly governed by the provisions of Article 115 § 2 and 4.