Amendments to the Companies Act – changes concerning the term of office and mandate of the members of the governing bodies

This is the third part of the series of entries related to the subject of the amendment of the Act – the Code of Commercial Companies.

In this part, I address the issue of changes in the term of office of the board of directors and shareholders, the purpose of which is to clarify the period for which members of the company’s bodies are appointed and for how long they remain empowered to perform their functions.

I would like to remind you that as of 13 October 2022, the Act of 9 February 2022 amending the Act – Commercial Companies Code and certain other acts will enter into force. This is one of the biggest amendments to the said Act, which will strongly affect the functioning of capital companies, i.e. limited liability companies, simple joint-stock companies and joint-stock companies.

Amendments relating to the Administrative Board – Term of office

In accordance with the amendment of Article 369 § 1 of the Commercial Companies Code and the addition of § 2 in Article 202 of the Commercial Companies Code:

369 § 1 A member of the board of directors shall be appointed for a period not exceeding five years (term of office). The term of office shall be calculated in full financial years, unless the articles of association provide otherwise. Re-appointment of the same person as a member of the management board shall be permissible, but not earlier than one year before the expiry of the current term of office.

202 § 2 The term of office shall be calculated in full financial years, unless the articles of association/articles of association provide otherwise.

Terms of office will be calculated in full fiscal years.

The indication of the calculation of the term of office in full financial years resolves the final disputes on the correct indication of the expiry dates of the mandates.

It is also worth bearing in mind the provision of Article 23 of the amendment, which indicates:

(1) The provisions of the Act amended by Article 1, as amended by this Act, shall apply to the mandates and terms of office of the members of the bodies which are ongoing on the date of entry into force of this Act.

(2) The provisions of this Act, as amended by this Act, shall apply to persons who, before the date of entry into force of this Act, began to perform the functions specified in 18 § 2 of the Act amended by Article 1.

In view of the foregoing, we will apply the provisions of the Commercial Companies Code, which are made applicable by this amendment, to the mandates and terms of office of the members of the bodies that continue on the effective date of this Act, i.e. on 13 October 2022.

The provisions of the Commercial Companies Code as amended by this Act shall also apply to members of bodies who, before the date of entry into force of this Act, commenced performing the function of a member of the management board, supervisory board, audit committee, liquidator or proxy.

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