Expiration of the mandate of a member of the board of directors of a limited liability company appointed for an indefinite period of time

According to the judgment of the Supreme Court dated April 29, 2016, ref: I CSK 18/15, if the contract does not provide otherwise, the mandate of a member of the board of directors expires on the date provided for in Article 202 § 1 of the Commercial Companies Code, also when, according to the shareholders’ resolution, the appointment was for an indefinite period of time. In the judgment in question, the Supreme Court indicated that a professional (i.e., a company) can be expected to complete all necessary organizational steps to remove a condition that harms the certainty of trade and the stability of the legal relations established with it.

The aforementioned judgment has significant importance for economic turnover because often happens, that a resolution of the shareholders’ meeting, contrary to the wording of the company’s articles of association, appoints a member of the management board for an indefinite period of time – which, in light of the cited ruling, will result in the fact that a member of the management board so appointed will lose his mandate as of the date of the shareholders’ meeting approving the financial statements for the first full financial year of his function as a member of the management board, and any actions taken by him on behalf of the company after that date may be challenged.