On October 13, 2022, the provisions of the Act of February 9, 2022, amending the Commercial Companies Code and certain other acts, will enter into force. These amendments introduce a number of significant changes to corporate law. Among other things, the amendment introduces so-called holding law, which regulates the relationships between entities operating within a group of companies, reforms the provisions governing supervisory boards, and modifies the statutory rules governing the liability of management board and supervisory board members.
The fundamental change is the introduction of a definition of a group of companies into the Commercial Companies Code, as well as a separate section that broadly regulates the functioning of these groups. Previously, the Commercial Companies Code regulated the issue of dominance and dependence only with respect to individual companies, but now these issues are also addressed in relation to groups of companies. The regulations concerning groups of companies introduce, among other things, the ability of the parent company to issue binding instructions to a subsidiary, ongoing oversight by the parent company's supervisory board over the subsidiary's pursuit of the group's interests, and the ability for the parent company representing at least 90% of the subsidiary's share capital to adopt a resolution on the compulsory buyout of shareholders in a subsidiary. Participation in a group of companies will be voluntary, but participation in the group will require disclosure to the National Court Register.
Another significant change is the introduction of new powers and responsibilities for supervisory boards. According to the legislator, the reason for these changes in the supervisory board's responsibilities is the lack of adequate information transfer between company bodies and, consequently, the ineffective exercise of oversight by supervisory boards. The amendment introduced, among other things, the ability for the supervisory board to request extensive information from the management board, commercial proxies, and company employees, the obligation to prepare an annual report on the supervisory board's activities, and the ability for a supervisory board resolution to establish ad hoc or standing committees of the supervisory board. Another significant innovation is the introduction of mandatory auditor participation in supervisory board meetings, the subject of which includes the assessment of the company's financial statements or the evaluation of proposals regarding profit distribution in the case of companies whose financial statements are subject to statutory audit.
The amendment to the Commercial Companies Code also modifies the statutory principles of liability of supervisory board and management board members. The Commercial Companies Code introduces the business judgment rule , which has previously been applied within the Polish legal system solely through court decisions without any statutory basis. This rule exclusively provides for civil liability of management board and supervisory board members (as well as liquidators) for damages caused to the company, provided that these entities acted loyally to the company and within the limits of justified economic risk. Furthermore, the amendment also expands the list of criminal provisions and offenses for which a final conviction results in the inability to perform specific functions.
The October amendment is undoubtedly one of the most significant changes to Polish corporate law in recent years. The amended provisions of the Commercial Companies Code will not only introduce a new operating framework for companies organized within groups of companies, but will also significantly alter the internal organization of most companies operating in Poland.
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