The issue of indefinite term appointments for
management board members of limited liability
companies has for years presented interpretative
challenges to judges and legal scholars alike. Also
the Supreme Court has failed until now to develop a
uniform and clear ruling practice in this respect.
That is why the judgment of the Supreme Court
issued on 4 March 2015 in case IV CSK 340/14,
which clearly resolved this problematic issue, is to
be welcomed.
Article 202.1 of the Code of Commercial Companies
Act of 15 September 2000 (hereinafter the “CCC”)
indicates the point in time when the mandate of a
member of the management board of a limited
liability company expires. In the opinion of some
judges and legal scholars, the shareholders may set
aside the rule that this mandate expires as of the
date of the general meeting which has approved
the financial report for the first full financial years
during the term of office of the member of the
management board only in the articles of
association. As the Supreme Court pointed out in its
resolution of 21 July 2010 issued in case III CZP
23/10, “this means that unless the articles of
association provide otherwise, the mandate of a
member of the management board expires on the
date contemplated in Article 202 §1 of the CCC also
if such appointment was made for an indefinite
term pursuant to a resolution of the shareholders”.
However, in line with the view of Supreme Court
justices expressed in their judgment of 12 October
2011 issued in case II CSK 29/11, “(…) where a
board member has been appointed for an indefinite
period, the provisions of §4, rather than those of
§1-2, of Article 202 of the CCC are applicable,
which means that a management board member
appointed for an indefinite term will hold that
position until such time when the conditions laid
down therein for his/her mandate to expire are
fulfilled, and in particular until he/she is dismissed
by a shareholders’ resolution”.
These two, apparently dissimilar opinions of the
Supreme Court regarding the issue in question could
undoubtedly hinder the correct interpretation of
the option to appoint members of the management
board of limited liability companies for an
indefinite term. After the Court’s judgment issued
on 4 March 2014, the said issue should no longer
give rise any doubts in interpretation. According to the panel of justices sitting on case IV CSK 340/14,
both standpoints taken to date by the judiciary are
not mutually exclusive, considering that the key
points are the factual circumstances and the
dichotomous division based on whether or not the
shareholders’ intent to appoint a member of the
management board for an indefinite term has been
clearly expressed in the articles of association.
The justices clarified that the judgment issued in
case II CSK 29/11 dealt with a situation where a
management board member was appointed in the
articles of association, while the resolution issued
in case III CZP 23/10 referred to a situation where
the articles of association did not include a
provision on the appointment of a board member
for an indefinite term. Furthermore, the justices
confirmed that nothing prevents the matter of
expiry of the mandate of a management board
member from being regulated in the articles of
association in a manner different from that
provided under §1 of Article 202 of the CCC. To
incorporate a provision on the appointment of a
management board member in the articles of
association for an indefinite term is tantamount to
excluding the applicability of the contrary rule
contemplated in the cited provision. Consequently,
the board member’s mandate will expire only if in
any of the circumstances described in Article 202 §4
of the CCC materialize.
The ruling issued in case IV CSK 340/14 has also
resolved the issue of the presumed length of the
term of office of members of the management
board of limited liability companies. In line with
the panel sitting on that case, “(…) in the absence
of an express provision in the articles of association
of the limited liability company to the effect that
members of the management board are appointed
for an indefinite term, and without it being
indicated that they are appointed for the term of
office specified therein (for example, three years),
the provision of Article 202 §1 of the CCC
establishes a presumption that the term of office of
a management board member is one year. This
means that the company managers must each year
put themselves up for election by shareholders”.
MILLER, CANFIELD,
W. BABICKI, A. CHEŁCHOWSKI I WSPÓLNICY SP.K.
ul. Batorego 28-32
81-366 Gdynia
Tel. +48 58 782-0050
Fax +48 58 782-0060
gdynia@pl.millercanfield.com
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00-513 Warszawa
Tel. +48 22 447-4300
Fax +48 22 447-4301
warszawa@pl.millercanfield.com
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53-125 Wrocław
Tel. +48 71 780-3100
Fax +48 71 780-3101
wroclaw@pl.millercanfield.com
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certain recent legal developments of selected areas of law. For this reason the information contained in this publication should not form the basis of
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