As we have already informed you, on October 13, 2022, the Act on Amendments to the Act – Commercial Companies Code and Certain Other Acts came into force. It introduced a number of changes to the Commercial Companies Code, which we have already written about in our article HOLDING LAW – changes to the Commercial Companies Code – if you haven’t had a chance to read this article yet, we invite you to read it.
Below is information on further changes to the Companies Act, which were introduced by the aforementioned amendment act.
Obligation to keep minutes of management board resolutions
Previous regulations did not impose an obligation to keep minutes of management board resolutions in limited liability companies and joint-stock companies, and the legislator left the companies and the management board full freedom in this regard. The above has now changed, and as of October 13, 2022, management board resolutions must be minuted. The minutes of the management board meeting should include the agenda, the names of the management board members present and the number of votes cast for each resolution. The aforementioned minutes should also indicate a dissenting opinion submitted by a management board member, along with any reasons for it.
The above requirements, concerning the minutes of the management board’s resolutions, apply accordingly to the minutes of the resolutions of the supervisory board of limited liability companies in which this body exists, which have also been subject to the obligation in question since October 13, 2022.
It is worth recalling that the obligation to record the minutes of the resolutions of the bodies had already been introduced for simple joint-stock companies.
Access to Company documents
The current amendment to the CCC also introduced provisions to make it easier for shareholders of limited liability companies to obtain access to the management report on the company’s activities, the financial statement, the supervisory board’s report or the audit report. The indicated documents will be issued to the shareholder upon request, which may be made to the management board from the date of the convening of the ordinary shareholders’ meeting. The documents shall be made available to the shareholder immediately, no later than within two business days from the date of the relevant request.
Business judgement rule
The amendment also introduced for limited liability companies and joint-stock companies the so-called Business Judgement Rule, which is related to the liability of members of the supervisory board, management board and liquidators. To date, the rule has not been anchored in the act, but it has already been applied on the basis of court jurisprudence. The rule is related to the exclusion of civil liability of the designated entities for damages caused to the company, provided they acted in loyalty to the company and within the limits of reasonable economic risk.
The above means that a member of the management board, supervisory board and liquidator does not violate the duty of care arising from the professional nature of his or her activities if, acting in loyalty to the company, he or she acts within the limits of reasonable economic risk, including on the basis of information, analysis and opinions that should be taken into account under the circumstances in making a careful assessment.
The Business Judgement Rule was also already in effect for members of bodies in simple joint stock companies.
Standards for performing functions on corporate bodies
Another novelty, introduced by the above-described amendment to the CCC, is the introduction of provisions making it clear that a member of the management board, supervisory board or audit committee in a limited liability company and joint-stock company, when performing his or her duties, should exercise the diligence resulting from the professional nature of his or her activities and maintain loyalty to the company. Again, the indicated standards have already been previously introduced for members of the bodies of simple joint-stock companies.
The amendment also obliges the above-mentioned members of the bodies of limited liability companies and joint-stock companies to keep company secrets even after their mandate expires.