A new company form
Since 1 July 2021, the Polish Commercial Companies Code has regulated a new company form: the Polish simple joint-stock company (PSA). From the outset, it has attracted both praise and controversy. The PSA was conceived as a modern vehicle for innovative ventures, adapted to the legal environment and the realities of the contemporary economy. In this context, it is worth examining the liability of members of its governing bodies against the equivalent rules for Polish limited liability and joint-stock companies, particularly in the context of the globalisation of law and legal doctrines such as duty of loyalty (the loyalty principle), business judgment rule (business judgment) and duty of care (the obligation to exercise due care).
Analogy with the common law system
First, attention should be drawn to Article 30054 of the Polish Commercial Companies Code, which requires a member of a governing body to exercise due care (duty of care) when carrying out duties of a professional nature, and to remain loyal (duty of loyalty) to the company. This rule appears among the general provisions on governing bodies, rather than those on civil liability. The legislature seems to have intended to emphasise the fundamental importance of the duty of care, possibly to give renewed significance to that duty in company law.
The duty of loyalty no longer distinguishes the PSA from other companies with share capital. Since 13 October 2022, the Polish Commercial Companies Code has expressly regulated loyalty and professional care for members of governing bodies of limited liability companies (Articles 209¹ and 214¹) and joint-stock companies (Articles 377¹ and 387¹) as well.
The proposal to extend these duties to limited liability and joint-stock companies, discussed in the original article, has since been implemented. Comparisons of liability models must reflect this change, rather than only the provisions in force when the PSA was introduced.
The duty to exercise due care
Under Article 300125§ 1 of the Polish Commercial Companies Code, a member of a governing body is not liable for loss if it arose through no fault of their own. This liability is personal, unlimited and fault-based. The statute expressly identifies ‘improper conduct of the company’s affairs’ as the basis of civil liability in a PSA. This differs from the wording governing limited liability and joint-stock companies: both Article 293 of the Code (limited liability companies) and Article 483 (joint-stock companies) expressis verbis refer to ‘liability for loss caused by an act or omission contrary to law’. There is a clear, direct reference to the concept of duty of care, meaning the obligation to act carefully and prudently when making business decisions, and to act in good faith.
There is therefore a shift in the basis of liability for members of the governing bodies of a PSA. The legislature has placed the emphasis on substantive circumstances constituting a breach of the duty of care, such as failing to act loyally towards the company or exceeding the limits of reasonable business risk. The new rules reveal a significant influence of the common law.
Legal scholarship has been divided on the legal consequences of breaching the duty of care. One view holds that a breach is not an independent ground for liability in damages, but is considered when assessing a governing body member’s fault. Another view, found in scholarship and Supreme Court case law, argues that liability rules should not impose a rigid framework; attention should instead focus on management conduct capable of harming the company’s interests. It is nevertheless undeniable that, compared with other companies with share capital, the liability of PSA governing body members towards the company currently rests on differently structured rules that clarify the grounds for liability to a significant extent.
Business judgment rule
Article 300¹²⁵ § 2 of the Polish Commercial Companies Code sets out the business judgment rule for the PSA. Since 13 October 2022, the corresponding provisions for limited liability and joint-stock companies have been Article 293 § 3 and Article 483 § 3 of the Code. What matters is acting loyally within the limits of reasonable business risk, taking account of the information, analyses and opinions available when the decision was made. An adverse commercial outcome alone does not establish a breach of the duty of care.
Practical conclusion: assessing a governing body member’s decision requires reconstructing its circumstances and grounds, not merely examining the eventual outcome. Neither loyalty nor the business judgment rule should now be presented as exclusive to the PSA.
