Spółka z ograniczoną odpowiedzialnością (LLC)is one of the most popular forms of business activity in Poland, particularly chosen by foreign entities investing in the country. This is due to the simple regulations governing the company’s operation and the possibility of quick capitalization. The company’s current business is managed by the Management Board. This article will explain how to make changes to the Management Board of an LLC.
The Management Board is the body responsible for managing the company’s affairs (internal sphere) and representing it externally (external sphere). Only individuals who have not been convicted of certain economic crimes can be members of the Management Board. Members of the Management Board can be assigned specific functions, such as President of the Management Board, Vice President of the Management Board, CEO, Financial Director or Chief Accountant. The powers of representation of the company by individual members of the Management Board may vary and depend on the function performed.
The Shareholders Meeting is authorized to appoint members of the Management Board. However, the company agreement may grant this right to the Supervisory Board or individual shareholders, within the scope of their personal rights related to the shares they hold.
In the vast majority of cases, the appointment of members of the Management Board takes place at the Shareholders Meeting by adopting a resolution. The resolution should include the data of the new member of the Management Board, and – if applicable – information about the function in the Management Board or the term of office.
Before appointing a new member of the Management Board, it is worth checking in the company agreement whether it does not specify the maximum number of members of this body. In such a situation, in order for the appointment of a new member of the Management Board to be effective, it may be necessary to dismiss someone from the Management Board or change the company agreement (the appointment will be possible only after the registration of the change of the agreement by the court).
A member of the Management Board may be removed at any time by the Shareholders Meeting or an authorized shareholder. The resolution on removal should specify the date from which the removal will be effective. This will give the company and the removed member of the Management Board time to finish ongoing matters and prepare for the handover of power.
The resolution on the removal of a member of the Management Board does not have to include a justification. However, if a member of the Management Board receives remuneration for the function performed, and in his/her opinion the removal took place without a valid reason, he/she may claim compensation for dismissal without notice.
A member of the Management Board may resign from the Management Board at any time by submitting a written statement to the other members of the Management Board. Analogously to removal by shareholders, it is recommended to specify in the statement a later date from which the resignation will be effective. In the case of resignation without notice, it is also worth giving a justification so that the company cannot claim compensation.
There are special rules for resignation in situations where the resignation is submitted by the last member of the Management Board. In order to prevent a situation where the company does not have a Management Board and cannot operate, the regulations require that in order for the resignation to be effective, the statement must be submitted directly to the shareholders together with the convening of the Shareholders Meeting at which a new member of the Management Board will be elected. In such a case, the resignation will be effective only on the day of this Meeting.
Changes in the Management Board of the company do not require registration in the KRS register of entrepreneurs kept by the registry court for their effectiveness. This means that a member of the management board can perform his/her function from the moment of appointment, and is released from the obligations arising from sitting on the company’s management board from the moment when the dismissal/resignation is effective.
Nevertheless, the company should report all changes to the registry court within 7 days of their occurrence. This is important so that everyone has access to up-to-date information about the company. In the period between the appointment and the entry of changes to the KRS, the company’s counterparties may request additional documents confirming the possibility of representing the company (e.g., a copy of the resolution on appointment, or even a copy of the application submitted to the registry court).
Author Franciszek Horała
06.06.2024
