A manufacturing company registered in Warsaw discovered, during a routine review, that its board had continued trading for several months after the company became insolvent. No insolvency filing had been made. Two board members faced personal claims from creditors exceeding PLN 3m. The situation was avoidable – but only if the directors had understood their obligations under Polish law before the crisis point arrived.

Under Polish corporate legislation, board members of a spółka z ograniczoną odpowiedzialnością (private limited liability company, sp. z o.o.) bear personal liability for company debts when an insolvency filing is not made within 30 days of the company becoming insolvent. This liability is not capped. It extends to the full amount of unsatisfied creditor claims. The filing is made to the district court at the company's registered office, and the company must first be entered in the National Court Register (KRS).

This case study traces the background to that Warsaw matter, the legal strategy we deployed, the procedural steps taken, and the lessons that any director – Polish or foreign – should carry forward. The structure follows four stages: background, strategy, process, and transferable lessons.

What was the background to the board liability dispute?

The company was a mid-size manufacturing business supplying automotive components. Its two-member board had managed the business for over a decade without significant legal difficulty. In late 2024, a sustained drop in orders combined with rising input costs pushed the company into insolvency within the meaning of Polish insolvency law – liabilities exceeded assets, and the company could no longer service its debts as they fell due. The 30-day filing window began running immediately.

Neither board member recognised this moment as legally significant. Both believed the company could trade through the difficulty. That belief, however understandable commercially, is not a defence under Polish law. The Polish Financial Supervision Authority (KNF) and the courts have consistently held that subjective optimism does not suspend the statutory deadline. By the time the company's accountant raised the alarm, more than 90 days had elapsed.

Creditors – including a leasing company and two trade suppliers – initiated proceedings. They sought to hold both directors personally liable for debts of approximately PLN 3.2m. Our firm was instructed at that stage. We assessed the file and identified two potential lines of defence: first, whether the insolvency threshold had genuinely been crossed at the date alleged; second, whether either director could demonstrate that, despite the missed filing, no creditor had suffered harm as a result of the delay.

What legal strategy did the defence team adopt?

Polish corporate legislation places the burden of proof on the board member once a creditor establishes that an enforcement action against the company has failed. The director must then show one of three exculpatory grounds: that a timely insolvency petition was filed; that no petition was necessary because no basis for insolvency existed; or that the creditor suffered no damage from the failure to file. Each ground requires a different evidential approach.

We focused primarily on the second ground. Our analysis of the company's balance sheets – reviewed quarter by quarter with an independent financial expert – revealed that the technical insolvency trigger under Polish law was reached later than the creditors alleged. The gap narrowed from 90 days to approximately 35 days. That distinction mattered: at 35 days, the personal liability exposure remained, but the quantum of provable creditor harm was significantly reduced.

We also separated the two directors' positions. One had been operationally active; the other had a supervisory role and limited access to financial data. Polish courts have accepted, in a line of decisions, that a director's actual knowledge of financial position is relevant to the harm-causation analysis. This is not a blanket defence – but it is a meaningful factor in quantum. We prepared detailed witness statements for both individuals. We also cross-referenced the company's KRS filings to confirm that all procedural requirements for valid board appointment had been met, removing any argument that the individuals lacked standing to contest the claims.

We secured a reduction in the personal liability exposure from PLN 3.2m to approximately PLN 900,000 for a manufacturing client in the Mazowieckie region (winter 2025). That outcome reflected both the recalculated insolvency date and the court's acceptance that one director had not been in a position to influence the filing decision.

How did the court process unfold?

The proceedings were heard before the district court in Warsaw. Initial hearings focused on establishing the precise insolvency date – a factual question requiring expert accounting evidence. The court appointed its own expert, whose report largely aligned with our analysis. The insolvency threshold was confirmed as having been crossed approximately 38 days before the petition should have been filed.

For context on how entity structure affects liability exposure, see our analysis of branch vs. subsidiary structures in Poland. The choice of vehicle – branch or subsidiary – directly affects which individuals carry statutory director obligations under Polish corporate legislation.

The creditors' claims were assessed individually. The leasing company's claim was largely upheld because its loss was directly traceable to the filing delay. The two trade suppliers' claims were partially reduced: the court accepted that a portion of their exposure predated the insolvency trigger and could not be attributed to the directors' conduct. Total liability for the operationally active director was fixed at PLN 700,000. The supervisory director was held liable for PLN 200,000 – a figure the court justified by reference to his limited informational access during the critical period.

Both directors appealed. The appeals court upheld the first-instance findings in full. The process from initial instruction to final judgment took approximately 18 months. That timeline is typical for contested board liability proceedings in Warsaw courts.

What lessons should directors take from this case?

Three lessons emerge with particular clarity. First, the 30-day insolvency filing deadline is absolute. It runs from the moment the legal insolvency conditions are met – not from the moment the board acknowledges them. Directors who wait for certainty before acting will almost always miss the window. Early legal advice, triggered at the first signs of financial difficulty, is the only reliable safeguard.

Second, board structure matters. A director with genuine supervisory responsibilities and limited access to financial data is not automatically liable to the same extent as an executive director. But this distinction must be documented in advance – through board resolutions, internal reporting lines, and KRS filings. It cannot be constructed retrospectively. Foreign investors structuring their Polish entry should build this differentiation into governance documents from day one. Our analysis of foreign investment screening in Poland addresses related structural considerations for incoming investors.

Third, due diligence Poland requirements extend beyond the pre-acquisition phase. Ongoing financial monitoring – ideally with defined internal triggers for legal review – is a practical necessity for any director of a Polish sp. z o.o. The M&A Poland market has seen increased attention to post-acquisition governance precisely because acquirers have learned this lesson from cases like the one described here. For investors assessing real asset exposure, the legal implications of BREEAM and LEED certification in Poland offer a parallel illustration of how compliance obligations attach to individuals, not just entities.

  • Identify the insolvency trigger date precisely – do not rely on management estimates alone.
  • Document board roles, reporting lines, and information access in KRS filings and internal resolutions.
  • Set internal financial monitoring thresholds that trigger mandatory legal review.
  • Obtain independent accounting advice at the first sign of sustained cash-flow difficulty.
  • Never assume commercial optimism substitutes for a timely insolvency filing.

We also obtained interim measures protecting assets worth over EUR 1.5m for a foreign investor's subsidiary in Lower Silesia (spring 2025) – a matter where early action on governance documentation directly limited personal exposure for two non-resident directors.

The Warsaw case illustrates a recurring pattern. Directors who understand their obligations in advance are rarely the ones who end up in court. The law is not forgiving of delay, but it does reward preparation.

Your company's specific situation may involve a different insolvency threshold, a different board structure, or a different creditor profile. Each variable affects the exposure – and the available defences. Acting late forfeits options that are available only before proceedings begin.

To discuss how board liability rules apply to your directorship or to your planned investment in Poland, contact info@kordeckipartners.com.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to corporate governance, board liability, and M&A. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.