10.10.2022 Legal services

TGC Corporate Lawyers Legal review – September 2022

Recent legislative changes and interesting decisions prepared by TGC Corporate Lawyers.

1. Banks not always may photocopy your ID card

The President of the Personal Data Protection Office (UODO) decided that provisions of the Banking Law do not allow banks to make photocopies or scans of customers’ ID cards, for example, to open a bank account or to assess the customer’s creditworthiness. According to the President, it is enough to write down the data from identity documents.

Copying documents may take place only on the basis of the provisions of the act. Such a right of banks to make copies of documents is provided, among others, by the provisions of the Act on Counteracting Money Laundering and Terrorist Financing (AML Act). According to the position of the President of UODO, this is only possible in cases specifically mentioned in the AML Act, for example, carrying out an occasional transaction of the equivalent of EUR 15,000 or more or in cases where there is a suspicion of money laundering or terrorist financing.

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2. New obligations for employers

There is a bill amending the Labour Code and some other acts prepared by the Ministry of Family and Social Policy. In accordance with the planned changes, employers will be obliged to inform employees about work and pay conditions. Such information will have to include, among other things, instruction about the employee’s entitlement to breaks at work, rules regarding overtime work and compensation for it, as well as the employee’s right to training.

In addition, the employer will be obliged to inform employees about the possibility of full-time or part-time employment, and fixed-term employees – about vacancies. In addition, the employer should, if possible, comply with the employee’s request to change the working time specified in the employment contract.

The new regulations are not yet being processed by the Sejm.

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3. Planned amendments to the Act on Liability of Collective Entities for Prohibited Acts under the Threat of Penalty

The main change will be that proceedings against a collective entity will be possible without the need to first convict a natural person as a condition of that entity’s liability. In addition, the bill also provides for liability of legal persons for criminal offences committed to their benefit, also if it is not possible to identify the natural person who is the perpetrator of the prohibited act.

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4. Amendment to the Commercial Companies Code – a group of companies

The amendment to the Commercial Companies Code, apart from changes in the method of fixing the term of office of management board members (in full financial years, unless the articles of association provide otherwise) and determining the method of drawing up resolutions of the management board, which after changes should be recorded in the minutes, introduces the provisions on groups of companies.

The new regulations should facilitate the management of a group of companies by the parent company, in connection with the implementation of the group’s common economic strategy. By adopting a resolution on participation in a group of companies, the shareholders indicate the parent company, which is also disclosed in the business register (KRS). Participation in a group of companies allows the parent company to issue binding instructions, if this is justified by the interest of the group of companies and special provisions do not provide otherwise.  A subsidiary will have the right to refuse to execute an instruction if there is a risk it would lead to the insolvency or threat of insolvency, and in the case of a subsidiary participating in a group of companies that is not a single-member company, if there is a well-founded fear that the abovementioned instruction is contrary to the interest of that company and will cause it damage that will not be remedied by the parent company or other subsidiary participating in the group of companies within the period of  two years.

Learn more: Amendments to the Commercial Companies Code from 13 October 2022

5. Business Judgment Rule in the amended Commercial Companies Code

The amended provisions of the Commercial Companies Code introduce regulations regarding the civil liability of members of the management board and supervisory board of limited liability companies and joint-stock companies. The change consists in introducing a reference directly to an action “within the limits of justified economic risk”, i.e. the Business Judgment Rule.  In addition, the Business Judgment Rule assumes that members of the management board and supervisory board participating in groups of companies may invoke in their decisions not only the interest of the company they manage, but also the interest of the group of companies in which that company participates.

6. Additional obligations in the amended Commercial Companies Code

In addition to the above changes, the amended provisions of the Commercial Companies Code also introduce new rules for liability of management board members – Who, contrary to their obligations, does not provide information, documents, reports or explanations on time or provides them inconsistently with the facts, or conceals data that significantly affect the content of these information, documents, reports or explanations, is subject to a fine or a penalty of restriction of liberty.

The new provision will concern the implementation of the information obligation not only by the management board, but also by commercial proxies and persons employed in the company on the basis of an employment contract or performing for the company on a regular basis specific activities on the basis of a specific task contract, mandate contract or other contract of a similar nature, the supervisory board’s requests regarding the preparation or transfer of any information,  documents, reports or explanations concerning the company, in particular its activities or assets. The request may also relate to information, reports or explanations held by the body or the obliged person concerning subsidiaries or related companies. It is worth noting here that these materials must be provided by the obliged persons immediately, no later than within two weeks from the date of submitting the request by the supervisory board, unless this body has allowed them to be provided within a longer period. Who, contrary to the obligations arising from the code, does not submit to the supervisory board or its advisor the information, documents, reports or explanations on time, or provides them contrary to the facts or conceal them is subject to a fine of no less than PLN 20,000 (up to a maximum of PLN 50,000) or a penalty of restriction of liberty. If the perpetrator acts unintentionally, the minimum fine is PLN 6,000 and maximum PLN 20,000. Thanks to the new regulations, the supervisory board will be able to exercise its powers to access information about the supervised company.

5. Draft amendments to the Act on Counteracting Excessive Delays in Commercial Transactions

There is a draft amendment to the Act on Counteracting Excessive Delays in Commercial Transactions, which are intended to facilitate primarily the fulfillment of reporting obligations. Among other things, it is proposed to exclude from the accounts benefits from commercial transactions entered into in the field of insurance and reinsurance. Companies within one capital group have also been exempted from the reporting obligation.

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