Amendments to the Commercial Companies Code 2022 This is a topic that should not only be of interest to those operating in the form of a company. This is because it will affect shareholders of companies, as well as all persons who have something to do with companies. We are referring here to members of supervisory boards, members of management boards, audit committees, as well as liquidators and proxies.
In today's article, we will focus on presenting the 3 most important changes that result from the amendment adopted by the 9 February 2022. Essentially, three areas can already be distinguished at this point where these changes will be made:
- Extension of the rights and duties of members of the management board of limited liability companies and supervisory boards;
- Introducing a so-called group of companies - in a new, separate section and defining the 'interest of a group of companies';
- Extension of the catalogue of offences that prevent theą exercising functions in capital companies.
We discuss all of them below.
Amendments to the Commercial Companies Code - Extension of the rights and obligations of members of management boards of limited liability companies and supervisory boards
Calculation of cadence
The changes in the context of the rights and obligations of members of the organs in limited liability companies will include, inter alia, clarification in Article 202 of the § 2 of the Code of Commercial Partnerships and Companies (hereinafter: CCC) on the method of calculating the term of office of directors in a limited liability company:
"The term of office shall be calculated in full financial years unless the articles of association provide otherwise."
This amendment is intended to dispel interpretative doubts about the calculation of the term of office of the members of the board of directors that have hitherto arisen.
Extension of the duty of loyalty
The aforementioned amendment will also include modifications regarding the loyalty of former board members. They will have to, pursuant to section 209(1) of the Companies Act, maintain their loyalty to the company also after the expiry of the mandate.
Extension of the information powers of supervisory boards
Supervisory board members will also have the power to obtain more information. Above all, the board will be able to obtain it from the management board, proxies, but also from people employed by the company. This is to ensure a better flow of information and thus a better functioning of the company. The following are involvedThey also have the option of requesting athe board to prepare the annual report and to appoint standing or temporary committees of the board.
Business judgment rule
The legislator also introduces into Polish law the principle of business judgement, which has so far only existed in Poland in case law. Liability for damage caused to the company as a result of decisions of the authorities that turned out to be erroneous may be excluded if it was taken within the limits of reasonable risk.
The legislator's view - expressed in the explanatory memorandum of the bill: thanks to the amendment, members of the body who have diligently and loyally performed their duties and who have decided to take risks for the company will gain protection in the event that ex post it turns out that the decision was wrong and led to damage to the company.
Amendments to the Companies Act - introduction of a so-called group of companies in a new, separate section and the definition of "interest of a group of companies" in the Companies Act
One of the more interesting changes introduced by the amendment will be the so-called "group of companies" and the accompanying term "interest of a group of companies." This entails both new possibilities but also obligations for the entities participating in the company. It would be appropriate to mention here, that these changes only apply to limited liability companies subject to registration in the KRS.
What is a group of companies?
At the outset, it would be appropriate to define the concept of a group of companies, which is introduced by the amended Article 4 § 1(5)(1) of the Companies Act. This is because a group of companies should be distinguished from the previously prevailing relationships in Polish law between parent companies and subsidiaries.
As defined in the amendment to the Companies Act -. a group of companies is a parent company and subsidiary company/s that should follow a common strategy to pursue a common interest (the interest of the group of companies). In turn, the strategy should justify the parent company exercising unified management over either the company or its subsidiaries.
"Mutual economic strategy" will be adopted by resolution in the companies and, within this framework, the companies will be guided by the so-called "interest of the group of companies", with priority over the interest of the company itself. Such coordinated action - as part of a joint economic strategy - for the interest of the group of companies is to improve their cooperation.
Interest of the group of companies
The new definition of 'interest of a group of companies' introduces not only new possibilities but also obligations for companies operating in a group of companies. For example, a parent company may give a binding order to a subsidiary and the subsidiary must comply with such an order. Importantly, such an obligation will be incumbent on it, even if the instruction harms its own interests. However, such action will have to be taken in the interests of the entire group of companies.
Read also: Liability for debts in limited liability companies
Amendments to the Code of Commercial Companies - expansion of the catalogue of offences which, upon conviction by final judgment, make it impossible to hold, functions in capital companies
The last modification is the expansion of the catalogue of offences which - once committed and validly convicted of them - will make it impossible to perform the function of, for example, a member of a supervisory board in companies, as well as other functions related to the company. The changes will also affect those who started performing these functions before the reform came into force.
The offences of:
- accepting material or personal benefits or the promise thereof in connection with the performance of a public function,
- giving or promising to give a pecuniary or personal benefit to a person performing a public function in connection with the performance of that function,
- intermediating in the settlement of a matter in return for a material or personal benefit or the promise thereof, while at the same time invoking influence in a state or local government institution, an international or national organisation or in a foreign organisational unit managing public funds,
- giving or promising to give a pecuniary or personal benefit in exchange for intermediation in the settlement of a matter in a state or local government institution, an international or national organisation or in a foreign organisational unit disposing of public funds, consisting of unlawful exertion of influence on a decision, action or omission of a person performing a public function, in connection with the performance of this function, exceeding of powers or failure to perform duties by a public official which may result in damage to public or private interests.
The Act imposes an obligation on the Information Office of the National Criminal Register to provide ex officio the registration courts with information on persons who will not be able to hold office in capital companies as of the effective date of the amendment to the Companies Act.
