A management board member may be liable for the performance of his/her duties under civil, criminal and organisational liability.
Civil liability is liability for damage. A management board member is liable towards a company, and may be liable towards shareholders and third parties (in particular the company’s creditors), as the case may be, under:
- general rules on liability, and
- rules on liability set out in the Commercial Companies Code.
Under the general rules on liability, a person who culpably causes damage is obliged to compensate for such loss. This provision sets out a general base for 'tortious' liability of a management board member. To be successful, the claimant must prove that it suffered damage due to the culpable acts of the management board member, which may be difficult in practice. Therefore, claims based on this general provision are very rare.
Under the Commercial Companies Code, a management board member is liable towards the company for the damage the company suffered due to the member’s acts. To hold a management board member liable, all of the following conditions must be met:
- the company must suffer damage
- the damage must result from an act or omission of the management board member that breached either the law or the articles of association
- the management board member’s act must be culpable and he/she must have failed to maintain the standard of due professional diligence.
If more than one management board member caused damage, all members involved may be jointly and severally liable.
Management board members may be held jointly and severally liable with the company for its obligations if enforcement against the company proves to be ineffective, provided that they did not, in appropriate time, file a petition for bankruptcy or show that at that time, a ruling on the opening of restructuring proceedings or on the approval of an arrangement in the proceedings in the matter of approving the arrangement was issued. However, they can be exempted from this liability if they prove that a petition was filed in due time, or that they were not at fault, or that the creditor did not sustain any damage despite the fact that the petition was not filed or no ruling on the opening of restructuring proceedings was issued or no arrangement was approved in the proceedings in the matter of approving the arrangement.
A management board member may be criminally liable for various intentional acts or omissions. An offence is committed with intent if the perpetrator has the will to commit it, that is, is willing to commit the offence or, foreseeing the possibility of perpetrating it, chooses to do so. However, Polish law also penalises certain situations where an offence is committed unintentionally.
Organisational liability of a management board member means that a management board member can be dismissed from his/her position at any time.
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