The Draft Act amending the Act – Code of Commercial Companies and certain other acts, which is at the stage of legislative works regulates criminal liability of the bodies of capital companies, in particular members of the supervisory board, but not only.

Extension of criminal liability of members of the management board of a capital company (proxies, company employees or persons bound by a civil law agreement)

The draft act extends the powers of supervisory boards to demand from the management board, proxies, company employees or persons employed in the company under a specific task contract, contract of mandate or other contract of a similar nature, to prepare or submit any information, documents, reports or explanations needed for supervision the company, in particular relating to the company’s operations or the company’s property status. The requested information / documents should be provided to the supervisory board immediately, not later than within two weeks from the date of submitting the request, unless the supervisory board sets a longer deadline for responding to the request (see Art. 219 § 4 – 42, Art. 30071 § 1 – 21 , Art.30076 § 5 and Art.382 § 4 – 42 of the Commercial Companies Code).

In order to make the above powers of the council effective, Art. 5871 of the Code of Commercial Companies and Partnerships, which stipulates that who, contrary to the obligations arising from Art. 219 § 4 – § 41, art. 30071 § 1 – § 2, art. 30076 § 5 or article. 382 § 4 – § 41, fails to deliver on time or provides information, documents, reports or explanations inconsistent with the facts, or conceals data affecting the content of such information, documents, reports or explanations, will be subject to a severe penalty of a fine or the penalty of restriction of liberty.

It is also proposed to add Art. 5872 of the Commercial Companies Code, penalizing failure to submit to a supervisory board advisor on time or providing information, documents, etc. that are inconsistent with the facts or concealed in a specific manner.

Both acts can be committed intentionally or unintentionally.

The project initiator indicated that in order to strengthen the importance of the discussed institution and highlight the consequences of its inappropriate application, Art. 18 § 2 of the Commercial Companies Code by prohibiting a person who has been convicted by a final judgment for an offense specified in the proposed Art. 5871 of the Commercial Companies Code.

Increasing the risk of criminal liability of members of the supervisory board

Due to the penalisation by art. 296 of the Penal Code criminal mismanagement, in the context of granting extensive powers to the supervisory board regarding, inter alia, obtaining information and making decisions regarding the company’s property sphere, members of the supervisory board can be considered persons obliged to deal with the company’s property matters or business, which gives rise to their criminal liability under Art. 296 of the Penal Code, or Art. 9 § 3 of the Commercial Companies Code (not exempting the members of the management board from liability, of course).

Compensation liability towards the company’s supervisory board members is also provided for in Art. 293 § 1 of the Commercial Companies Code and Art. 483 § 1 of the Commercial Companies Code. However, liability may be limited or excluded, taking into account the wording of the proposed Art. 293 § 3 of the Commercial Companies Code and 483 § 3 of the Commercial Companies Code, that the entity does not breach the obligation to exercise due diligence if acting in a loyal manner to the company, it acts within the limits of a justified economic risk, including on the basis of information, analyzes and opinions that should be taken into account in given circumstances when making careful evaluation.

In order to avoid liability for damages, but also criminal liability in terms of criminal mismanagement, it is necessary for supervisory board members to remain active in the implementation of supervision, to make decisions based on expert studies, commissioned opinions, etc., to ensure compliance with the law within the scope of the board’s competence e.t.c.

It is also worth mentioning the proposed Art. 2091, art. 2141, art. 3771 and article. 3871 of the Commercial Companies Code, which stipulate that members of the management board and supervisory boards of limited liability companies and joint-stock companies cannot disclose the company’s secrets even after the expiry of their mandate. Violation of this obligation (unlimited in time) may result in liability for damages under Art. 23 sec. 1 of the Act on Combating Unfair Competition.

To sum up, the proposed amendment extends the limits of criminal liability (but not only) of corporate bodies, and the main reason for this extension is the increase in the powers of the supervisory board and the corresponding increase in the obligations of members of the supervisory board itself, but also of other corporate bodies.

Below is a link to the Draft Act on the amendment of acts: