In the previous part, we discussed the first part of the possible consequences that may arise for a member of an elected body if he or she breaches his or her duty to act with due care, namely the duty to compensate for damage, the duty to deliver unjust enrichment and the incurrence of liability. In this part, we will focus on disqualification, i.e. the expulsion of a member of the statutory body, the action for the addition to liabilities and the action for the release of a benefit.

The issue of disqualification is regulated in § 63 of the Act on Business Corporations (hereinafter “BCA”). According to this regulation, the court may decide, even without a request, that:

• a member of the statutory body of the business corporation ¹ Section 69 BCA extends it to other groups of persons, e.g. former members of the statutory body, persons in a similar position of a member of the statutory body (i.e. liquidator and guardian of a legal entity) and others. Finally, if a legal person is a member of the statutory body of a commercial corporation, the disqualification process applies to the natural person who represents the legal person in the performance of its duties. , who

• in the last 3 years prior to the initiation of the proceedings ² The proceedings may be initiated for acts occurring within the last three years prior to the initiation of the proceedings, and disqualification proceedings may be initiated at the request of a person having an important interest, but also without a request. ,
• has repeatedly or seriously breached his or her duties in the performance of his or her duties,
•  may not, for a period of 3 years from the legal effect of the decision on expulsion, serve as a member of the statutory body of any business corporation.

According to the decision of the Supreme Court in Case No. 29 Cdo 2227/2016, the sense and purpose of the legal regulation on the exclusion of a member of the statutory body is to promote the public interest in ensuring that the function of a member of the statutory body of a commercial corporation is not performed by persons who have committed a qualified breach of the duties associated with this function (and who are thus in serious doubt as to whether they would perform this function properly and in accordance with the law).

Disqualification may at the same time concern only the prohibition to perform the function of a member of a statutory body, i.e. a person who has been prohibited from performing the function may also perform the function of a member of another elected body.

Disqualification is not only a sanction for breach of the duty to act with due care; the grounds for disqualification may be a breach of any duty connected with the exercise of the function.

Upon the legal effect of the decision ³ The court may, on the motion of the person whose expulsion is being considered or of the business corporation concerned, decide that a person for whom grounds for expulsion of a member of the statutory body are given may, under the conditions set out in the decision, remain a member of the statutory body of another business corporation. However, the circumstances of the case must show that the previous performance of the duties of a member of the statutory body in that business corporation does not justify exclusion from office, and that any exclusion could lead to damage to the legitimate interests of that business corporation or its creditors. on disqualification of a member of the statutory body, the person to whom the decision relates ceases to be a member of the statutory body in all commercial corporations.

These are two special duties regulated in Section 66 BCA acting against a member of the statutory body ⁴ Here as well Section 69 BCA extends the scope to other groups of persons. .

An action to supplement the liabilities ⁵ As with the case of liability, a breach of duty other than a breach of due care is also relevant to an action for replenishment of liabilities. may be brought only by the insolvency administrator at the request of a creditor if the company’s assets have been declared bankrupt. In such a case, a member of the statutory body may be ordered to provide the estate with a payment up to the difference between the total debts and the value of the assets of the business corporation. In determining the amount of the compensation, the court shall take into account in particular the extent to which the breach of duty contributed to the insufficient amount of the estate, i.e. the court shall apply the principle of proportionality.

As stated in the explanatory memorandum, the obligation to replenish the assets of a business corporation constitutes a special case of the obligation to compensate for damages. The conditions are (i) a breach of duty by a member of the statutory body, (ii) the occurrence of damage consisting in insufficient assets from which the creditors of the business corporation could be satisfied, and (iii) a causal link between the breach of duty and the lack of assets (bankruptcy). The obligation to replenish liabilities is decided at the end of the insolvency proceedings.

The primary reason for the action for the release of the benefit is that the insolvency administrator can only bring it in cases where the insolvency petition was filed on the petition of a person other than the debtor. Although it is not expressly mentioned, the principle of proportionality also applies in the case of an action for the recovery of a benefit from the exercise of office. Although the legislator formulates the sanction as compulsory if the statutory prerequisites are met, it must first be assessed whether, if the other statutory prerequisites are met, the sanction is proportionate to the obligation breached and only if the court concludes that it is, can it uphold the action.

The essence of this sanction is the obligation to hand over any benefit retroactively for a maximum period of 2 years from the commencement of insolvency proceedings, which a member of the statutory body has received in connection with the performance of his/her duties (from the contract of office as well as any other benefit). It is therefore irrelevant whether or not a contract of office was concluded, whether or not all the conditions for the payment of the benefit were met, whether or not it is remuneration, an interest-free loan or any other benefit. The only restriction is that the consideration must be related to the performance of the duties of a member of the statutory body. Therefore, if it is a benefit received by the person concerned by virtue of another capacity, e.g. as a partner or employee, it will not be actionable. In the case of a non-monetary benefit, the member of the statutory body must provide appropriate monetary compensation.