For many years the Polish doctrine of commercial law has discussed the question of the legal importance of discharge in the context of the responsibility of board members (and members of the supervisory board or review committee) towards the company. It is unclear whether the granting of discharge to the members of the board of directors protects them from possible claims of the company, or whether the fact that they have received discharge does not affect their liability.
It should be stressed that, in certain cases, the members of the Management Board do not have the opportunity to rely on the discharge granted to them as an occasion to relieve them of their responsibilities.
These cases include, in particular, the fact that the shareholder has brought an action to remedy the damage suffered by the company and in the event of the company's bankruptcy (yes: Article 296 and Article 487 k.s.h.).
According to Article 296 k.s.h., concerning the limited liability company, in the event of such action being brought and in the event of the bankruptcy of the company, persons liable for compensation may not rely on a resolution of the shareholders granting them discharge or the waiver of claims for damages by the company.
Similar provisions, except as regards a joint stock company, include Article 487 k.s.h.
It should be concluded that the fact that the discharge is granted to a member of the Management Board does not invalidate the possibility for the company to seek compensation for the damage it has caused. The discharge resolution has no direct effect on the company’s external relations, but only has intra-corporate effects.
In addition, discharge shall not relieve members of the Management Board of liability towards the company, inter alia, in the following situations:
- where a resolution on the approval of reports has been taken following acts of misleading shareholders on the basis of unreliable data, incorrect or incomplete information, etc.,
- if certain conditions exist under Article 291-294 k.s.h. (i.e. there are reasons for the responsibility of the board member), and the meeting of shareholders at the time of the adoption of the resolutions had no information about the facts justifying the responsibility 1 .
In addition, there is no possibility of raising the plea of discharge, inter alia, in the rules on liability for damage in the merger and division of companies, specifically under Article 512(2), Articles 526(2) and 548(2) k.s.h. These provisions clearly show that it applies to them.
Article 296 k.s.h., which means the inadmissibility of referring to the granting of discharge in connection or divisional proceedings. Interestingly, a similar reference does not contain Article 568 k.s.h. relating to the transformation of the company.
The discharge also has no legal effect on the background Article 175, Article 198, Article 350 and Article 366(3) k.s.h. which belongs to a group of compensatory claims.
This is, first of all, the obligation on board members to compensate the company for the loss incurred as a result of the adoption of over-priced aports (Article 175 k.s.h.), obligation to reimburse undue dividends (Article 198 p.h.), obligation to repay the undue benefit (Article 350 k.s.h.) and violation of the ban on own shares (Article 366(3) k.s.h.).
On the other hand, the fact that a member of the company's body has received discharge may affect the compensation liability specified under Article 292 (damage to the formation of the company), Article 293 (the responsibility of the members of the bodies for the damage caused), Article 480 (damage to the formation of the company), Article 481 (provide yourself or the person third disproportionate advantages in the formation of the company), Article 483 (the responsibility of the members of the bodies for the damage caused), Article 484 k.s.h.
(responsibilities of the company to issue shares, etc.) and Article 568 k.s.h. (for claims for a converted company).
Importantly, discharge cannot be taken into account when assessing possible liability to entities other than the company, such as the company's creditors.
For example, the fact that discharge has been obtained has no legal significance in the case of these claims from Article 291 and Article 479 k.s.h., which sanction liability towards the creditors of the company, and not towards the company itself. Nor is there legal significance in the case of actions based on Article 415 and n.
and Article 471 and n. the Civil Code. Claims under the provisions of the Code on Delict or Contractual Liability against members of the organs of capital companies shall, in principle, be granted only to shareholders and persons third.
This conclusion is based on the content Article 300 and Article 490 k.s.h., in which the legislation does not refer to the companies themselves, as entities entitled to bring actions under the Civil Code.
In conclusion, the fact that the discharge granted to a member of the Management Board does not invalidate the possibility for the company to seek compensation for the damage it has caused. The discharge resolution has no direct effect on the company’s external relations, but only has intra-corporate effects. It should also be stressed that the civil rights claims of the company in relation to its officers undoubtedly belong to the external sphere.
However, the adoption of the discharge resolution does not remain entirely legally irrelevant, as it demonstrates acceptance of the actions of the member of the board of directors, although it does not relieve him of his liability for the damage caused to the company. It should therefore be recalled that the resolution on granting discharge to a member of the Management Board only concerns the regularity of his performance of his duties, not the exemption from liability for damage or the company's declaration of intent to waive compensation claims.
1 A. Kidyba, Company z o.o. Comment, 2002, p. 582-584
Author:
Justyna Kyć
Legal adviser in the Legal Department
From 2017 associated with Russell Bedford Poland. He specializes in corporate customer service, in particular in drawing up and negotiating commercial contracts and providing ongoing legal advice.
Her experience includes the service of Clients from many industries, including public sector entities. He also has extensive experience in conducting disputes and representing clients before general and administrative courts.
At the Chancellery Russell Bedford It deals primarily with civil and economic law matters and comprehensive M&A transaction handling.
She is a graduate of the Faculty of Law and Administration at the University of Silesia in Katowice and of the Interdepartmental European Studies at the College of Europe/C olège d'Europe in Bruges (Natolin Campus). She also completed postgraduate studies in public procurement conducted by the Warsaw School of Economics. From 2015 Member of the District Chamber of Legal Advisors in Katowice.