Should the management board in a Polish limited liability company always appoint its president?

This article will answer the following questions:

• What does the president of the management board do?
• What is the difference between the president of the management board and a member of the management board in a Polish limited liability company?

Establishing a limited liability company (Polish: spółka z o.o.) in Poland entails a number of statutory obligations for business owners, and meeting these obligations is key to ensuring model operation of the entity. One of the most important requirements in this case is the need for the company owners to appoint a management board. In practice, members of this body can be assigned various functions – including the role of the president of the management board. However, the Commercial Companies Code* does not directly specify whether the appointment is indeed mandatory.

*Act of 15 September 2020 – the Commercial Companies Code (Journal of Laws of 2024, item 18).

The theory under the Code: the management board of Polish limited liability company as the corporate executive body 

As we have mentioned on multiple occasions on our blog, a limited liability company is one of the most attractive forms of running a business in Poland. Its executive body known as the management board is the one that:

• manages the company,
• represents the company in relations with other entities (offices, clients, contractors), and
• attends to the company’s affairs by making internal decisions – including those of an organisational nature.

When operating on the Polish market, business owners should be well acquainted with the exact rules governing this body. We wrote more about the appointment, dismissal and liability of members of the management board in a limited liability company in the article “Management board in a limited liability company – key information and regulations”. 

Please note – the very existence of the management board is crucial for the proper functioning of a limited liability company in business transactions, and the creation of this body is a mandatory element of the internal corporate structure of this entity. 

Equal rights and obligations of the company’s management board members

For the management board to be a fully-fledged body, it must be made up of management board members.

The Commercial Companies Code in Article 201(2) explicitly states that the management board in a limited liability company consists of one or more members.

Interestingly, the currently binding regulations stipulate only the general definition of management board members, without actually emphasising the authority of the president of the management board. It can therefore be assumed that being the president of the management board is often a purely honourable title, as all members of the management board are equal and have the same rights and obligations. Only the Articles of Association can incorporate a completely separate clause on this matter and ensure that the function of the president of the management board is not merely symbolic.

How does the position of the president of the management board differ from the position of the member of the management board?

Technically, these two functions are no different! The president of the company's management board (similarly to the vice president) makes up the management board and – consequently – is also a member of the management board. And there is no obligation or legal compulsion for a limited liability company to appoint its president.

However, in day-to-day business, it is common practice to designate someone for the position. In addition to prestige and the opportunity to build one’s personal brand thanks to the title of president (acting as the boss, leader, company frontman), this person, along with the function, often gains additional, unique privileges and authorisations (specified in detail in Articles of Association), such as:

• broader authority in terms of company representation – the president of the management board may be granted the right to representing the company solely, while other members of the management board can still represent it jointly;    
• having a casting vote – thanks to relevant authority, the vote of the president of the management board may be crucial where resolutions are adopted by collective management boards (Article 208(8) of the Commercial Companies Code);
• special internal authority – e.g. enabling the president of the management board to arrange the work of the entire management board as a collective body or to exercise a disciplinary function over other members of the management board.

Please bear in mind that regardless of the position held by a given person in the corporate hierarchy (irrespective of whether they are the president or vice president), their liability towards creditors for the company’s debts remains the same – i.e., unlimited, personal as well as joint and several with other "ordinary" members of the management board.

Is it worth appointing a president of the management board in a limited liability company?

There are multiple reasons why shareholders should appoint a president of the management board in a company. Most often, such actions are driven by the desire to point out a company frontman – someone who will manage the business and become a support for employees, a strong leader in negotiations with contractors and a guardian bolstering the company's position on the way to explore new business horizons. So when it comes to business practice, this is a function that is often performed, although sometimes not really associated with any additional powers.

And what about the legal perspective? The answer to the title question about whether a president of the management board should always be appointed in a limited liability company is of course "NO". The Polish Commercial Companies Code does not impose such an obligation and the appointment of a person to such a function is always an internal decision of the shareholders.