Corporate bodies of a family foundation in Poland

According to the Polish family foundation regulations, the structure of a family foundation will include a founder and beneficiaries, as well as corporate bodies such as a board of directors, a supervisory board and an assembly of beneficiaries.

This article will present information on the corporate bodies of a family foundation.

The board of directors of a Polish family foundation – duties

The board of directors of a family foundation is its mandatory body. Thus, we will find it in the structure of every Polish family foundation.

The duties of the family foundation’s board in accordance with the law are:

• managing the affairs of the Polish family foundation and representing it,
• implementing the goals of the family foundation as defined in the statute,
• undertaking activities related to ensuring the financial liquidity and solvency of the Polish family foundation,
• creating, maintaining and updating the list of beneficiaries in accordance with the provisions of the law and the rules contained in the statute (the board of directors reviews the personal data of beneficiaries at least once a year and removes data whose further retention is unnecessary),
• informing the beneficiary of the benefit to which he/she is entitled,
•  fulfilling the benefit to which the beneficiary is entitled.

The board member is obliged to exercise due diligence and act loyally towards the family foundation. He is also obliged to keep confidential the information obtained in connection with his function. The duty of confidentiality also binds him after the expiration of his mandate.

The Law on Family Foundations specifies that the secrecy of a family foundation in particular is to be understood as information concerning the direction of investment, corporate bodyizational or other information of economic value, as well as information concerning beneficiaries that, as a whole or in a particular compilation and collection of its elements, is not generally known to persons normally dealing with this type of information or is not readily available to such persons, provided that the person authorized to use or dispose of the information has taken, with due diligence, measures to keep the information confidential.

Composition of the board of directors of a family foundation in Poland

The board of directors of a family foundation consists of one or more board members.
The function of a member of the board may be performed by an individual with full legal capacity. A person may not be a member of the Board of Directors if he or she has been convicted by a final judgment for certain crimes (offenses of bribery, paid patronage and abuse of office, as well as offenses against protection of information, offenses against credibility of documents, offenses against property, offenses against money and securities, offenses against business and property interests in civil law transactions) – unless five years have passed since the date the conviction became final or the conviction has been erased earlier.

The right of a member of the board of directors to represent the family foundation extends to all judicial and extrajudicial actions, and this right cannot be restricted with effect against third parties.

Unless the statute provides otherwise:

• a board member is appointed for a three-year term,
• a board member may be appointed for successive terms,
• the appointment and removal of the board member is made by the founder (and, after the death of the founder, by the supervisory board if established; if the founder dies and there is no supervisory board, the appointment and removal of the board member is made by the assembly of beneficiaries).

If the foundation is established by a will, the founder shall specify in the will the person or persons to be appointed to serve as a member of the foundation’s first board.

The term of office of a board member expires upon:

• expiration of the term for which he or she was appointed,
• dismissal (this may occur at any time),
• death,
• resignation from the function (here the provisions of the Civil Code on termination of the order by the order taker apply).

The statute may contain provisions on termination of office (e.g., limit the right of dismissal to valid reasons).

Board members may serve for remuneration, but in the absence of an agreement on remuneration – board members serve without remuneration. Board members are entitled to reimbursement of expenses related to participation in the work of the board.

Multi-member board of directors of a Polish family foundation

If the board of directors of a family foundation is multi-member, and if the statute does not contain a different regulation in this regard, all its members are required and authorized to jointly manage the affairs of the family foundation.

If the articles of incorporation of a family foundation do not provide otherwise and the board of directors of the foundation is multi-member – the family foundation shall be represented by two members of the board of directors acting jointly. The signatures of all members of the board of directors on a document issued by the family foundation are required only if the law or the statute so provides.

Statements made to the family foundation and service of letters on the family foundation may be made to a single board member.

Representation of the family foundation when entering into a contract with a board member or in a dispute with a board member

Regarding the representation of the family foundation when entering a contract with a board member or in a dispute between the family foundation and a board member:

• if a family foundation is to enter a contract with a board member or if a dispute arises between a family foundation and a board member, the family foundation shall be represented by the supervisory board. If there is no supervisory board, the family foundation shall be represented by an attorney appointed by a resolution of the beneficiaries’ assembly.
• When a member of the board of directors is the only member of the assembly of beneficiaries – in such a situation, a legal action between this beneficiary and the family foundation represented by him requires the form of a notarial deed, and the notary public shall notify the registry court of such a legal action in each case (the requirement of a notarial deed does not apply in the case of the realization of benefits to which a beneficiary who is also a member of the board of directors is entitled).

Supervisory board of a family foundation

The supervisory board of a family foundation is an optional body if the number of beneficiaries does not exceed twenty-five people (if the number of beneficiaries exceeds twenty-five people the supervisory board is mandatory). This means that its establishment is not mandatory, and in the structures of one foundation we will find a supervisory board, and in others there may not be one. The supervisory board can be established in the statute by the founder. It is not possible to serve simultaneously as a member of the board of directors and as a member of the supervisory board.

The supervisory board may consist of one or more board members.

Unless the statute provides otherwise:

• members of the supervisory board are appointed for a five-year term,
• a member of the supervisory board may be appointed for successive terms,
• members of the supervisory board of a family foundation are appointed and dismissed by the founder (and after his death by the assembly of beneficiaries).

If a family foundation is established in a will, the founder may specify in the will the person or persons to be appointed to serve as member or members of the first supervisory board.

The supervisory board, as its name indicates, performs supervisory functions vis-à-vis the board of directors – with regard to compliance with the law and the provisions of the statute. The charter of a family foundation may expand the powers of the supervisory board (e.g., provide that the board of directors is required to obtain the approval of the supervisory board before carrying out a certain action).

In order to carry out its supervisory function, the supervisory board may direct the management board or any other obligated person to request information, documents, reports or explanations – these documents must be provided to the supervisory board immediately, but no later than within two weeks from the date of the request (unless the supervisory board specifies a longer term).

Assembly of beneficiaries of the family foundation in Poland

The assembly of beneficiaries is formed by beneficiaries who are granted the right to participate in it in the statute. The founder establishes the assembly of beneficiaries in the statute.

Unless the statute provides otherwise – the assembly of beneficiaries is convened by the board of directors. Exceptions to this situation:

• In the event of the death of the funder and the absence of a board of directors, and when the funder is not authorized to appoint a board of directors, a member of the board of directors shall submit his or her resignation to the members of the beneficiaries’ assembly, at the same time convening the beneficiaries’ assembly if, due to the resignation, no seat on the board would be filled. The notice of the beneficiaries’ assembly shall also include the resignation statement of the board member. The resignation shall be effective as of the day following the day for which the beneficiaries’ meeting was convened.
• In the event of the death of the founder and the absence of a board of directors, and when the founder is not authorized to appoint a board of directors, any beneficiary may convene a meeting of beneficiaries if, as a result of the death of a board member, no seat on the board would be filled.
• The statute may specify cases in which beneficiaries may demand that the board of directors convene a meeting of beneficiaries. The request shall specify the proposed agenda for the meeting of beneficiaries. A beneficiary who has demanded the convening of a meeting of beneficiaries shall have the exclusive right to cancel the meeting.
• If, within two weeks from the date of presentation to the board of directors of a demand to convene a beneficiaries’ assembly in the cases specified in the family foundation’s charter, the beneficiaries’ assembly is not convened with an agenda in accordance with the demand, the registry court may, after summoning the board of directors to make a statement regarding the demand and to explain why the board of directors has not complied with the demand, authorize the requesting beneficiary to convene a beneficiaries’ assembly. The registry court shall appoint the chairman of this meeting. The notice of the meeting of beneficiaries in such a case shall cite the order of the registry court.

The beneficiary may participate in the meeting of beneficiaries and exercise voting rights in person or by proxy. A power of attorney to participate in the meeting of beneficiaries and exercise voting rights shall be in documentary form under pain of nullity. A copy of the power of attorney shall be attached to the minutes of the meeting of the assembly of beneficiaries. The Board of Directors shall take appropriate measures to identify the beneficiary and the proxy, in terms of verifying the validity of the power of attorney.

The Law on Family Foundations indicates that it is necessary to adopt a resolution of the beneficiaries’ assembly in the case of:

• considering and approving the family foundation’s financial statements for the previous fiscal year,
• discharging the members of the family foundation’s bodies for the performance of their duties,
• distribution or coverage of the net financial result,
• selection of an auditing firm, in case the financial statements are subject to audit,
• other matters mentioned in the law or the statute.

Unless the statute provides otherwise, the beneficiaries’ assembly shall be valid regardless of the number of votes represented at it.

The assembly of beneficiaries passes resolutions on the appointment or dismissal of members of the board of directors or the supervisory board, if at least half of its members participated in the meeting or voted in writing or by means of direct remote communication.

Term of office and serving as a member of a Polish family foundation corporate bodies

The term of office of a member of the corporate body of a family foundation shall be calculated in full fiscal years unless the statute provides otherwise. The required form for consent to serve as a member of a family foundation corporate body is in writing.

Meetings of family foundation corporate bodies

The place of meetings of the family foundation’s corporate body shall be the family foundation’s premises (or any other place designated by the statute or if all members of the corporate body agree to hold the meeting at a place other than the family foundation’s premises).

Meetings of family foundation corporate bodies shall be convened by the chairman of such a body:

• on the chairman’s own initiative,
• at the request of a member of the body:
• the request may include a proposed agenda or adoption of a specific resolution in writing or by means of direct remote communication,
• if the chairman of the body of the family foundation does not call a meeting or order a vote in writing or by means of direct remote communication for a date falling within two weeks from the date of receipt of the request, the requester may independently call a meeting, stating its date, time and place.

Convening a meeting requires sending notices stating:

• date, time and place of the meeting,
• the proposed agenda (unless the statute provides otherwise, the agenda indicated in the notice may be extended during the meeting if none of the members of the family foundation body participating in the meeting objects to it, unless the statute provides otherwise),
• if participation in the meeting is by means of electronic communication, the notice must additionally include information on how to participate in the meeting, speak during the meeting, exercise the right to vote and object to the resolution or resolutions adopted.

It is possible to participate in the meeting of the family foundation corporate body by means of electronic communication (unless such possibility is excluded by the family foundation’s charter).

To participate in the meeting of the family foundation corporate body by means of electronic communication, it is necessary to provide at least:

• real-time transmission of the meeting,
• real-time two-way communication (so that a member of the family foundation corporate body can speak during the meeting while in a place other than the meeting place),
• exercise of voting rights before or during the meeting.

Adoption of resolutions by Polish family foundation corporate bodies

Adoption of a resolution by a family foundation corporate body is possible if all members of the corporate body have been duly notified of the meeting or of the vote in writing or by means of direct remote communication. If the statute of the family foundation does not provide for stricter restrictions, the family foundation corporate body shall adopt resolutions if at least half of its members have participated in the meeting or voting in writing or by means of direct remote communication.

Resolutions of the family foundation body shall be adopted by an absolute majority of votes (unless the statute provides otherwise) and shall be minuted. The minutes shall include a list of the members of this corporate body participating in the vote and the content of the adopted resolutions and the result of the vote. The minutes shall be signed by at least the member of the family foundation corporate body conducting the meeting and the person taking the minutes. Unless the articles of incorporation of the family foundation provide otherwise, each member of the family foundation corporate body is entitled to one vote, unless the articles of incorporation provide otherwise. As a rule, the votes of the family foundation corporate body shall be public. Secret votes are held:

• at elections and on motions to dismiss members of family foundation corporate bodies,
• on holding members of the foundation’s corporate bodies accountable,
• on personal matters, 
• at the request of at least one member of the family foundation corporate body participating in the vote.

Lack of the required consent of the family foundation body to perform an action – legal effect

If, in order for a family foundation to perform a legal act, the law requires a resolution of the assembly of beneficiaries, a legal act performed without the required resolution is invalid. A legal act performed without the consent of the competent body of the family foundation, required only by the statute, is valid, but this does not exclude the liability of the members of the board of directors to the family foundation for violation of the statute. The approval may be given either before or after the filing of the statement by the family foundation, but no later than two months from the date of filing the statement. Confirmation expressed after the filing of the statement has retroactive effect from the moment of the legal action.

Are you planning to establish a family foundation in Poland? Do you have doubts related to the bodies of a family foundation? Let us help you!

If you are planning to establish a family foundation in Poland, would like to structure your business and are wondering whether a family foundation is a good solution for you or maybe you have doubts about the corporate bodies of a family foundation – contact us.

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