A member of the management board of a limited liability company (Polish: sp. z o.o.) is, as a rule, not liable for the company’s debts with their own assets. The exception is Article 299 of the Commercial Companies Code (k.s.h.): if enforcement against the company proves ineffective, the members of the management board are jointly and severally liable for its obligations. For creditors this is an effective way of recovering a debt; for the board it is one of the greatest risks of running a company. We explain when liability arises, how to avoid it and what to do in practice.
Legal basis
- Article 299 § 1 k.s.h. – joint and several liability of board members for the company’s obligations if enforcement against the company proves ineffective,
- Article 299 § 2 k.s.h. – grounds for release from liability,
- Article 21(1) of the Bankruptcy Law (Prawo upadłościowe) – the duty to file for bankruptcy within 30 days of the occurrence of grounds for bankruptcy,
- Article 11 of the Bankruptcy Law – definition of insolvency.
When liability under Article 299 k.s.h. arises
A creditor who sues a board member must prove two things: the existence of the company’s obligation (most often confirmed by a judgment or another enforcement title) and the ineffectiveness of enforcement against the company (for example, a bailiff’s decision to discontinue enforcement because the company has no assets). The circumstances excluding liability set out in § 2 must be proved by the board member. In its judgment of 21 June 2021 (case V AGa 23/21), the Court of Appeal in Gdańsk stressed that the creditor’s only burden is to show the existence of the obligation and the ineffectiveness of enforcement.
The duty to file for bankruptcy
The core of liability is an omission. Board members must file for bankruptcy within 30 days of the day on which grounds for bankruptcy arose. The ground is insolvency. A debtor is insolvent if it has lost the ability to perform its due monetary obligations; this is presumed if the delay exceeds 3 months. For limited liability companies, insolvency may also arise where liabilities exceed the value of the company’s assets and this state continues for longer than 24 months.
In disputes the key issue is determining the date on which the filing should have been made. This often requires an expert opinion in accounting, and the outcome depends on the company’s financial records.
How a board member can be released from liability (Article 299 § 2 k.s.h.)
The burden of proof rests on the board member. A board member is not liable if they show that:
- the bankruptcy petition was filed in due time, or at the same time a decision was issued opening restructuring proceedings or approving an arrangement in arrangement-approval proceedings,
- the failure to file was not their fault,
- the creditor suffered no damage despite the failure to file.
The concept of damage in Article 299 § 2 k.s.h. is the subject of extensive case law, and its assessment depends on the circumstances of the case. The compatibility of Article 299 k.s.h. with the Constitution was the subject of the Constitutional Tribunal judgment of 12 April 2023 (P 5/19, Journal of Laws 2023, item 739).
Scope of liability
- Liability is joint and several – the creditor may sue any board member, who may then seek contribution from the others.
- It covers the company’s obligations in respect of which enforcement against the company proved ineffective.
- The position of persons who ceased to hold office (resignation, removal) must be assessed individually – what matters above all is when grounds for bankruptcy arose and who was then on the board.
- The limitation period depends on how the claim is characterised and on the circumstances of the case, so it should be determined individually before a decision to sue or defend is made.
Separate from this are the board’s liability for the company’s tax arrears (Article 116 of the Tax Ordinance) and liability in damages to the company itself (Article 293 k.s.h.). These bases may apply alongside Article 299 k.s.h.
Article 299 k.s.h. should also be distinguished from tort liability for actually managing the company after a mandate has expired. In its order of 25 April 2025 (I CSK 1591/24, refusal to accept a cassation appeal for consideration) the Supreme Court indicated that, in the case of a former board member who, after his mandate expired, actually ran the company’s affairs, the basis of the claim was Article 415 of the Civil Code and not Article 299 k.s.h.
What a board member should do
- Monitor liquidity – regularly analyse overdue obligations, delays over 3 months and the ratio of debts to assets.
- Record the date on which insolvency was determined and the decisions taken (board resolutions, notes); in a dispute you must prove lack of fault.
- File for bankruptcy within 30 days or consider restructuring if the company has a chance of survival.
- Do not move assets or pay selected creditors without analysis – such actions may have separate legal consequences and require analysis in the specific case.
- Do not treat resignation as an automatic way to avoid liability – its effect depends on when grounds for bankruptcy arose.
- Check D&O insurance and any internal rules on liability in the articles of association.
What a creditor should do
- Obtain an enforcement title against the company.
- Start enforcement and obtain the decision confirming it was ineffective.
- Establish who sat on the board when the grounds for filing for bankruptcy arose (KRS register, financial statements).
- Sue the board members jointly and severally, stating the date from which the petition should have been filed.
- Consider interim security if there is a risk of assets being disposed of.
Frequently asked questions
Is a commercial proxy (prokurent) or shareholder also liable? Article 299 k.s.h. applies to members of the management board. A proxy and a shareholder are not board members; any liability on their part requires separate analysis.
Must all board members be sued? No. Liability is joint and several, so the creditor may choose one or several.
Does the company’s bankruptcy close the matter? Not always. A bankruptcy petition filed in due time is one of the grounds for release from liability (Article 299 § 2 k.s.h.). If the petition was filed late, liability may still arise.
Does resignation or the sale of shares protect a former president? Not automatically. What matters is whether grounds for bankruptcy existed while the person held office and whether the grounds for release are met.
Who must prove the lack of fault? The board member. They must prove one of the three grounds in Article 299 § 2 k.s.h.
This article is for information purposes only and contains general information as of 22 October 2026. It does not constitute legal advice or a legal opinion in an individual case. We advise board members and creditors in cases under Article 299 k.s.h., as well as in bankruptcy and restructuring matters.