In which companies is a supervisory board mandatory?

A supervisory body is an institution that exists exclusively in capital companies; the exception in this respect is the limited joint-stock partnership. Accordingly, a supervisory board may be established in the following types of companies: a limited joint-stock partnership, a limited liability company, a simple joint-stock company, and a joint-stock company.

With regard to a limited joint-stock partnership, attention should be paid to Article 126 § 1 point 2 of the Commercial Companies Code, pursuant to which, in matters not regulated in the section concerning the limited joint-stock partnership, the provisions applicable to a joint-stock company shall apply accordingly, in particular the provisions concerning share capital, shareholders’ contributions, shares, the supervisory board, and the general meeting. Pursuant to Article 142 § 1 of the Commercial Companies Code, a supervisory board may be established; however, if the number of shareholders exceeds twenty-five, the establishment of a supervisory board then becomes mandatory. In other words, in a limited joint-stock partnership there is no obligation to appoint a supervisory body unless there are more than 25 shareholders, in which case the appointment of a supervisory board is compulsory.

In a limited liability company, there is also no obligation to appoint a supervisory board. However, pursuant to Article 213 § 2 of the Commercial Companies Code, in limited liability companies whose share capital exceeds PLN 500,000 and which have more than twenty-five shareholders, a supervisory board or an audit committee must be established. Accordingly, the obligation to establish a supervisory body arises only when two conditions are met cumulatively: the company’s share capital exceeds PLN 500,000 and the company has more than twenty-five shareholders.

With regard to a simple joint-stock company, pursuant to Article 300^52 § 2 of the Commercial Companies Code, the appointment of a supervisory board is always optional and requires regulation in the articles of association. It should be noted that, unlike in the case of a limited liability company, the legislator has not provided for any circumstances in which the establishment of a supervisory board would be mandatory and has left this entirely to the discretion of the shareholders.

In a joint-stock company, pursuant to Article 381 of the Commercial Companies Code, a supervisory board is established. Therefore, it should be noted that the establishment of a supervisory board in a joint-stock company is mandatory. It should also be emphasized that the management board is responsible for the absence of a supervisory board or for the board operating with an improper composition.

In summary, and in direct answer to the question posed, the only company in which there is a statutory obligation to establish a supervisory board is a joint-stock company. In the remaining types of companies, this body is optional, or the obligation to appoint it arises only upon the fulfilment of specific conditions, such as reaching a certain level of share capital or exceeding a specified number of shareholders.