Poland: Personal liability of Management Board members in bankruptcy proceedings

In Poland, management board members can face personal financial liability if they fail to respond appropriately to signs of insolvency. This liability may extend to their private assets and arises from three key legal provisions: Article 299 of the Commercial Companies Code (KSH), Article 116 of the Tax Ordinance (OP), and Article 21(3) of the Bankruptcy Law (PU). Each establishes different conditions, burdens of proof, and possible defenses.

The obligation to act does not depend on a board member’s subjective belief but on the company’s objective financial condition. There are two main legal grounds for insolvency. The first is the inability to meet due financial obligations. This can be clear, such as when the company has no funds or financing options, or presumed when at least two debts remain unpaid for over three months. The second is when liabilities exceed assets for a continuous period of at least 24 months, taking into account both book and market values. In either case, the management board has 30 days to file for bankruptcy or initiate restructuring.

Under Article 299 KSH, board members may be liable to creditors if enforcement against the company fails. Defenses include timely filing for bankruptcy, proving absence of fault, or showing that the creditor suffered no damage. Article 116 OP deals specifically with unpaid tax liabilities and offers fewer defenses; it does not allow exemption on the basis of no damage. Article 21(3) PU concerns liability for damages caused by missing the bankruptcy filing deadline. Here, damage is presumed, and the only defenses are timely filing, opening of restructuring proceedings, or proving no fault.

These regimes differ in scope and severity. Article 299 offers the broadest defense options, while Article 116 and Article 21(3) are stricter and allow less room for argument. In all cases, liability can arise from neglect, even without intent.

Practical considerations include recognising early signs of insolvency, monitoring liquidity and liabilities, documenting board actions, understanding that responsibility is shared among all members, and acting promptly—restructuring is only effective if initiated early enough. Filing for bankruptcy does not automatically end operations; courts often appoint a temporary supervisor to assess the company’s condition, and applications can be withdrawn if circumstances improve.

Factual check:
• The legal references to Articles 299 KSH, 116 OP, and 21(3) PU are correct under Polish law.
• The 30-day deadline for filing after insolvency arises is accurate.
• The description of insolvency grounds matches statutory definitions.
• The statement on presumed damage under Article 21(3) PU aligns with established interpretation.
• What is missing is specific recent case law examples, statistical data on how often board members are held liable, and practical differences in how courts apply these provisions in tax vs. civil cases. Including these would provide a fuller picture of real-world application.

Author: Expert commentary prepared by Mateusz Haśkiewicz – qualified restructuring advisor, legal advisor, president of the management board of Haśkiewicz Dyła Restrukturyzacje Upadłości sp. z o.o.