A German parent company acquires a Polish subsidiary, installs its own managers, and begins directing day-to-day operations from Frankfurt. Eighteen months later, the subsidiary is insolvent. Polish creditors file claims – not only against the subsidiary, but against the parent and the directors personally. The parent's legal team is surprised. They should not have been.
Polish law does not recognise a general doctrine of group liability. Each company within a corporate group remains a separate legal entity, and its debts are ordinarily its own. However, Polish corporate legislation, insolvency law, and the recently enacted rules on groups of companies create multiple pathways through which a parent company or its appointees can be held liable for a subsidiary's obligations. The key threshold is control: where a parent directs the subsidiary's affairs in a way that causes harm to the subsidiary or its creditors, liability follows.
This guide explains the step-by-step exposure map for corporate groups operating in Poland. It covers the statutory framework, board liability triggers, the new group-of-companies regime, pre-pack insolvency as a protective tool, and the three most common structural mistakes. Each section includes at least one concrete figure – a deadline, a threshold, or a cost – because vague awareness of risk is not a substitute for knowing exactly when the clock starts ticking.
How does Polish law define a corporate group – and why does the definition matter?
Polish corporate law recognises a formal concept of a "group of companies" (grupa spółek). Under the Commercial Companies Code (Kodeks spółek handlowych, KSH), a group exists when a dominant company and one or more subsidiaries pursue a common group strategy. This is not automatic: the group must be formally disclosed to the National Court Register (KRS). Failure to register the group structure means the parent cannot invoke group-level instructions to justify decisions that harm the subsidiary – but creditors can still pursue liability on other grounds.
The definition matters for two reasons. First, a registered group allows the dominant company to issue binding instructions (wiążące polecenia) to subsidiaries. Second, those instructions come with accountability: if a binding instruction causes harm to the subsidiary and the harm is not remedied within two years, minority shareholders or creditors can seek compensation. The two-year window is not a safe harbour – it is a deferred liability clock.
Polish institutions play a central role in enforcing these rules. The KRS records the group structure. The district courts adjudicate claims under the KSH. The Polish Financial Supervision Authority (KNF) monitors groups that include regulated entities. Groups with a banking or insurance subsidiary face additional scrutiny from KNF, with consolidated supervision rules that can accelerate liability findings.
One practical point that surprises foreign clients: a parent company that has not formally registered the group but exercises de facto control can still be treated as a dominant entity by Polish courts. Control is assessed by substance, not paperwork. A parent holding 75 percent of shares and appointing all board members will be treated as dominant regardless of what the corporate documents say.
When does board liability arise under Polish insolvency law?
Board liability is the most immediate risk in a distressed subsidiary. Polish insolvency law imposes a hard 30-day deadline: board members must file for insolvency within 30 days of the company becoming insolvent. Insolvency arises either when the company cannot pay its debts as they fall due, or when its liabilities exceed its assets for more than 24 months. Missing the 30-day window triggers personal liability of directors for the full amount of unsatisfied creditor claims.
This is not a theoretical risk. Personal liability under Polish corporate legislation attaches to each board member individually, including foreign nationals appointed by the parent. A director who argues that head office did not authorise the filing will not succeed: Polish law places the obligation on the board member personally, not on the group. The filing is made to the district court at the subsidiary's registered office.
We secured a reversal of a surcharge exceeding PLN 1.8m imposed on a manufacturing client's board in the Mazowieckie region (autumn 2025). The key argument was that the board had taken documented steps to restructure the subsidiary within the statutory window, even though the formal filing was delayed. Documentation of the decision-making process proved decisive.
Three additional liability triggers deserve attention:
- Failure to convene a shareholders' meeting when the subsidiary's net assets fall below half of its share capital
- Continuing to trade after the insolvency threshold is crossed, which can constitute a white-collar offence under the Polish Criminal Code
- Granting intra-group loans or upstream guarantees at non-market terms within 12 months before insolvency, which are vulnerable to clawback
The clawback window for intra-group transactions is particularly important. Any transaction concluded at an undervalue within five years before insolvency can be challenged by a court-appointed insolvency administrator. This includes intercompany transfers, dividend payments, and management fee arrangements. Foreign investors frequently underestimate this exposure when structuring cash pooling across a Polish subsidiary.
What does the new group-of-companies regime change for parent companies?
Poland amended the KSH in October 2022 to introduce a dedicated group-of-companies framework. The reform created a structured mechanism for issuing binding instructions to subsidiaries – but it also created explicit accountability for those instructions. A dominant company that issues an instruction causing harm to the subsidiary must compensate the subsidiary unless the harm is offset by group-level benefit within two years.
The practical effect is a two-year liability deferral, not a two-year exemption. If the subsidiary becomes insolvent before the two-year period expires, the compensation obligation crystallises immediately. Creditors of the insolvent subsidiary can pursue this claim through the insolvency administrator. The parent cannot simply argue that the group benefit was planned but not yet delivered.
For a foreign investor, the registration requirement creates an early decision point. Registering the group gives the parent legitimate authority to direct the subsidiary, but it also creates a documented paper trail of instructions. Not registering preserves deniability on paper, but courts will look at economic substance. In our experience, parents with more than 50 percent shareholding and board appointment rights are routinely treated as dominant entities in Polish proceedings.
Our team obtained interim measures protecting assets worth over EUR 3m for a technology group's Polish subsidiary in Wielkopolska (spring 2026). The parent had issued undocumented operational instructions that the insolvency administrator was seeking to characterise as harmful. Securing interim relief before the administrator could transfer assets was the critical step.
To receive an expert assessment of your group's exposure under the new KSH framework, contact info@kordeckipartners.com.
How does pre-pack insolvency protect a subsidiary's going-concern value?
Pre-pack insolvency (przygotowana likwidacja, pre-pack) allows a buyer – which can be the parent itself or a related entity – to acquire the subsidiary's business before formal insolvency proceedings open. The court approves the sale simultaneously with the insolvency declaration. The entire process can be completed in as little as three months, compared to 18 to 36 months for a standard liquidation.
Pre-pack is particularly valuable in corporate groups because it allows the parent to ringfence the subsidiary's performing assets while leaving legacy liabilities in the insolvency estate. The buyer acquires assets, not shares, which means it does not inherit the subsidiary's historical obligations. Polish insolvency law requires court approval of the pre-pack price, which must reflect fair market value assessed by a court-appointed expert.
The cost structure matters. Court fees for pre-pack proceedings start at approximately PLN 1,000 for the initial application. The court-appointed expert's fee typically ranges between PLN 5,000 and PLN 30,000 depending on the complexity of the assets. Legal fees are additional. The total cost is modest relative to the value preserved – but the timeline is tight. A pre-pack application filed after the 30-day insolvency filing deadline has passed is still valid, but the board may already face personal liability for the delay.
For cross-border groups, pre-pack interacts with EU insolvency regulation. Where the subsidiary's centre of main interests (COMI) is in Poland, Polish proceedings take precedence. Foreign parents should be aware that cross-border insolvency involving Poland and Switzerland follows a different framework from EU member state proceedings, with recognition depending on bilateral arrangements rather than the EU Recast Insolvency Regulation.
What are the three most common structural mistakes in Polish corporate groups?
Structural mistakes in Polish corporate groups tend to cluster around three recurring patterns. Each one is avoidable. Each one has caused clients significant liability that could have been prevented with early advice.
Mistake 1: Cash pooling without arm's-length documentation. Many groups operate zero-balance or notional cash pooling across their Polish subsidiaries. Under Polish tax and insolvency law, intra-group lending must be priced at market rates and documented with a proper loan agreement. Undocumented cash pool participation can be recharacterised as a hidden dividend or a harmful instruction, triggering both tax surcharges and insolvency clawback. The Polish tax authority (Krajowa Administracja Skarbowa, KAS) routinely audits transfer pricing on cash pool arrangements.
Mistake 2: Appointing shadow directors. A parent employee who gives operational instructions to the subsidiary's board without being formally appointed as a director can be treated as a de facto board member under Polish corporate legislation. De facto directors carry the same personal liability as formally registered ones, including the 30-day insolvency filing obligation. This risk is particularly acute in IT and shared-services groups where parent employees routinely manage subsidiary operations.
Mistake 3: Ignoring real estate as a liability anchor. Polish subsidiaries frequently hold real estate assets that are subject to mortgage or perpetual usufruct rights. In insolvency, these assets are distributed to secured creditors first. A parent that has taken a mortgage over the subsidiary's real estate as security for an intra-group loan may find that the mortgage is challenged as a preference transaction if granted within 12 months before insolvency. For groups with significant property holdings, real estate advisory in Poland should be integrated into the group's insolvency planning from the outset.
What to prepare before a restructuring review:
- Corporate chart showing all Polish entities, shareholding percentages, and board composition
- List of intra-group transactions in the past five years, including loans, guarantees, and management fees
- KRS extracts for each Polish subsidiary, confirming registered addresses and directors
- Cash pool agreements and transfer pricing documentation
- Any binding instructions issued under the KSH group-of-companies framework
For groups with real estate exposure, a title search and mortgage register extract for each Polish property should be added to the list. The Land and Mortgage Register (Księga Wieczysta) is publicly accessible and provides immediate confirmation of encumbrances.
The specific facts of your group structure will determine which liability pathways are most material. Addressing them before a crisis forecloses options that insolvency proceedings cannot recover. To discuss how the restructuring framework applies to your Polish subsidiaries, email info@kordeckipartners.com.
Frequently asked questions
Q: Can a parent company be held directly liable for a Polish subsidiary's debts without piercing the corporate veil?
A: Yes. Polish law provides several routes to parent liability that do not require piercing the corporate veil in the traditional sense. Under the Commercial Companies Code group-of-companies provisions, a dominant company can be held liable for harm caused by binding instructions it issued to the subsidiary. Separately, insolvency law allows clawback of intra-group transactions concluded at undervalue within five years before the insolvency filing. These mechanisms operate independently of veil-piercing doctrine.
Q: How long does a restructuring or insolvency proceeding typically take in Poland, and what does it cost?
A: Timeline and cost depend heavily on the procedure chosen. A pre-pack insolvency can be completed in three to six months, with total costs (court fees, expert fees, legal fees) typically ranging from PLN 50,000 to PLN 200,000 for a mid-size subsidiary. A standard sanacja (restructuring) proceeding under the Restructuring Law takes 12 to 24 months. Full liquidation insolvency averages 18 to 36 months. Choosing the right procedure at the right moment is the single largest cost-control decision in a distressed situation.
Q: Is it a misconception that foreign-appointed directors are protected by their home country's corporate law?
A: Yes, this is a common and costly misconception. A director registered in the National Court Register is subject to Polish law regardless of their nationality or the law of the parent's home jurisdiction. Polish insolvency law imposes personal liability on every board member individually. A German or French national serving on a Polish subsidiary's board faces exactly the same 30-day filing obligation and the same personal liability consequences as a Polish national. Home-country corporate law provides no protection in Polish proceedings. For cross-border situations, the interaction between Polish proceedings and foreign jurisdictions – such as those covered in our analysis of cross-border insolvency involving Poland and the UAE – requires careful coordination.
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 restructuring, insolvency, and corporate group liability. 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.