Effective Resignation from a Company Management Board Position

According to the provisions of the Polish Commercial Companies Code, the resignation of a person serving on the management board of a capital company constitutes one of the grounds for the expiry of a management board member’s mandate.

In this article, we explain:

• How to effectively resign from a management board position.

• When a resignation becomes effective.

• What steps should be taken to resign as the sole management board member.

Resignation from a position

Resignation from a management board position is a way to cause the expiry of a mandate at the will of the person holding that position. In addition, submitting a resignation from a position on a company’s management board constitutes a unilateral legal act.

What does this mean? To effectively resign from a management board position, a resignation statement must be submitted in such a way that the company is able to become acquainted with its contents. A management board member may resign at any time.

The company to which the resignation is submitted is not required to accept it or undertake any actions relating to the dismissal of the management board member. The company’s only obligation in such a situation is to file the appropriate application for updating its data in the National Court Register (KRS).

Any provisions of the company’s articles of association or any other agreement between the management board member and the company that exclude the possibility of resignation for valid reasons or make its effectiveness conditional upon the company’s consent are null and void by operation of law.

Form of resignation

As a general rule, the Polish Commercial Companies Code does not specify a particular form for submitting a resignation. However, such a requirement may be provided for in:

• the company’s articles of association,

• the management board regulations.

• the appointment resolution or deed of appointment.

If none of the above documents specifies a particular form of resignation, it is recommended for evidentiary purposes that the resignation be submitted in writing.

Effective date of resignation

A resignation statement may specify the date on which the resignation becomes effective. This can be done by:

• indicating a specific date,

• indicating a general deadline, e.g. the last day of a given month.

If no effective date is specified in the resignation statement, it becomes effective when it is received by the company.

To whom should the resignation be submitted?

As a rule, a resignation should be submitted to:

• the remaining management board members (in accordance with the company’s representation rules), or

• a commercial proxy (if the company has a sole commercial proxy).

The most commonly used methods of submitting a resignation are:

• handing over a written resignation directly to the company’s management board members,

• sending the resignation by post to the company’s registered address.

When submitting a resignation, whether by delivering it personally or in any other way, it is advisable to obtain confirmation of its delivery.

Sole-member management board

Resigning from a management board position becomes somewhat more complex where the management board consists of only one person or where the sole management board member is also the company’s sole shareholder.

Limited liability company (sp. z o.o.)

If the sole management board member of a limited liability company wishes to resign, the resignation must be submitted to all shareholders while simultaneously convening a shareholders’ meeting. Such a meeting must be convened formally by sending meeting notices to all shareholders.

Joint-stock company (S.A.)

Where the sole management board member of a joint-stock company resigns, the resignation must be submitted to the company’s supervisory board. Only if the supervisory board is not duly appointed should the management board member submit the resignation to the shareholders while simultaneously convening a general meeting.

Simple joint-stock company (PSA)

If the sole management board member or director of a simple joint-stock company wishes to resign, the resignation must be submitted to all shareholders. As in the case of a limited liability company, this must be done simultaneously with convening a shareholders’ meeting. The company’s articles of association may provide for a different procedure.

Effectiveness of resignation

If the company’s articles of association or statute do not contain different provisions regarding the procedures described above and the resignation is submitted in accordance with the rules set out in the Commercial Companies Code, the resignation becomes effective on the day following the shareholders’ meeting or, in the case of a limited liability company, the shareholders’ assembly.

Sole shareholder

Where the sole management board member is also the company’s sole shareholder, any resignation from the management board position must be made in the form of a notarial deed.

What if the company fails to update the National Court Register (KRS)?

In practice, it may occur that despite a valid resignation from a management board position, the company fails to update the relevant entry in the National Court Register (KRS). In such a situation, a former management board member may submit a written notice to the KRS informing it of the resignation, together with supporting documents, and request that the court remove their name from the register ex officio.

How can we help?

TGC Corporate Lawyers provides comprehensive legal support for businesses, including:

• representing companies in proceedings before the National Court Register (KRS), including proceedings concerning changes to company data;

• preparing documentation necessary for resigning from a management board position;

• filing notifications of changes in the composition of a company’s management board with the KRS.

Summary

A resignation from a management board position is a unilateral declaration of intent that, as a rule, does not require the company’s consent or the adoption of a corporate resolution. Proper delivery of the resignation and determining the correct recipient are crucial to its effectiveness. Special procedures apply in the case of sole-member management boards and situations where the resigning management board member is also the sole shareholder of the company. Failure to follow the correct procedure may result in disputes regarding the effectiveness of the resignation and responsibility for company affairs. It is also worth remembering that failure to update the National Court Register does not invalidate a resignation, although additional action by the former management board member may be required.