16/01/2025
🟦 Challenging resolutions of the shareholders' meeting in a Polish limited-liability company
🟦 Sometimes the paths of the partners in a (sp. z o.o. in Poland) diverge. The partners may end their cooperation within the company amicably, or they may fall into a more or less acute conflict. The main cause of is financial issues. If the is financially successful, the partners who have been most involved in its development and who believe that this success is mainly due to them may not want to share their profits with the partners who have only been involved in the partnership.
➡️ They may try to take all kinds of actions against the shareholders to prevent them from sharing in the profits. They set up parallel companies, which are separate entities that carry out de facto competitive activities and benefit from the know-how developed in the original company. They can create opaque holding structures. They deny shareholders access to information about the company's activities and finances. They allocate profits in full to supplementary capital through general meeting resolutions.
🟦 An analysis of the justifications of court rulings as well as our practice shows that the course of a dispute between shareholders is often very similar. First, the shareholder who does not have access to information takes steps to obtain the necessary information about the company's operations. If he cannot obtain the information, he hires a . The conflict escalates. The company hides behind secrecy, an alleged possibility of damage to the company. This is followed by legal actions for access to information, challenges to resolutions at general meetings and, finally, reports of possible criminal offences, if there are grounds for them (actions to the detriment of the company, unfair competition, etc.).
🟦 In today's post we would like to take a closer look at the practical aspect of challenging shareholders' resolutions. The with respect to a limited liability company provides for two types of actions against shareholders' resolutions.
a) claim against the company for repealing a resolution (art. 249 of the Polish Code of Commercial Companies)
(b) an action to declare a resolution invalid (Article 252 of the Polish Code of Commercial Companies).
🟦 In this post, I will focus exclusively on shareholder challenges to shareholder resolutions. It should be noted that the circle of persons entitled to bring an action for the repeal of a shareholder's resolution is indicated in Article 250 of the Polish Code of Commercial Companies.
🚨 A shareholder who intends to challenge a resolution should vote against the resolution and then, after it has been adopted, request that his objection be recorded in the minutes (Article 250(2) of the Polish Code of Commercial Companies).
🕑 An action for the repeal of a shareholders' resolution should be brought within a month of becoming aware of the resolution, but no later than within six months of the date on which the resolution was adopted.
🟦 From a practical point of view, I would suggest the following course of action for the shareholder before the resolution is passed.
➡️ If a shareholder is concerned that the resolutions may be detrimental to the interests of the company or to him or her personally, he or she should contact the board of directors before the shareholder meeting and request information about the individual resolutions, in particular the reasons for them. This should preferably be done in writing or by e-mail. At the meeting, the shareholder should ask questions about the resolutions and participate actively in the discussion. He or she should ensure that the discussion and his questions are recorded as fully as possible. In any event, the shareholder should not forget to object to the minutes after each resolution if he wishes to challenge the resolution at a later date.
🛑 In any case, the assistance of an experienced is recommended. ‼️
This post does not constitute legal advice.
Stand. 16.01.2025
Pawel Majewski, LL.M. Attorney at Law
