Why the ordinary representation rule does not apply
The rule protects the company where the personal interest of a board member may conflict with the company’s interest. It applies broadly to contracts and disputes between the company and a current board member, not only to employment or management agreements.
Who may represent the company
Where a supervisory board exists, it may act subject to its internal decision rules. Otherwise, the shareholders appoint a specific proxy by resolution. An ordinary commercial proxy or another board member does not automatically replace this statutory mechanism.
Prepare the shareholder resolution carefully
Identify the transaction and proxy, define whether the proxy may negotiate, sign amendments, terminate and make related statements, and decide whether commercial terms are approved in the same resolution. Avoid an authority so vague that its scope is disputed.
The single-shareholder exception
How the issue appears in practice
Hypothetical example: the other board member signs
A two-person board assumes one member may sign a loan agreement with the other. The special statutory rule is overlooked, and the defect is found during a financing due-diligence review.
Which contracts are affected
The rule may cover employment, management, B2B, loan, security, sale and settlement agreements with a board member. Analyse transactions with former or future members and multi-party arrangements separately on their facts.
Consequences of defective representation
Incorrect signing can expose the transaction to invalidity or disputes over confirmation and performance. It may also create registry, accounting, tax and management-liability concerns. Do not wait until due diligence to correct the record.
Coordinate corporate approval and signing
The company may also need reserved-matter, conflict or financing approvals. Keep the resolution, proxy, signed agreement and evidence of any required disclosure in one corporate file.
Legal basis
- Polish Civil Code of 23 April 1964
- Polish Commercial Companies Code of 15 September 2000
- Polish Copyright and Related Rights Act of 4 February 1994
- Polish Entrepreneurs' Law of 6 March 2018
- Polish Act of 6 March 2018 on participation of foreign entrepreneurs and other foreign persons in economic activity in Poland
This article provides general information and does not constitute legal advice for a specific matter. The appropriate solution depends on the facts, documents and business objective.
Summary
The first question is whether the counterparty is a current board member. If so, identify the Article 210 representative and give that person a transaction-specific, workable authority before signing.