Imagine this: you built an app, transferred it to your company, signed an employment contract and spent two years developing the product. An investor offers a term sheet for PLN 5 million. Their lawyer reviews the documents and says: “This IP agreement is invalid. The app legally still belongs to you personally, not the company.” The funding round stops. One shareholders’ resolution could have prevented it in 15 minutes.
It sounds extreme, but it is not. Article 210 § 1 of the Polish Commercial Companies Code (KSH) requires a limited liability company to be represented in agreements with a management board member by a proxy appointed by a shareholders’ resolution or by the supervisory board. If the management board signs such an agreement with one of its own members, it is absolutely null and void. It cannot be fixed afterward.
This article explains when Article 210 KSH applies to your company, the consequences of breaching it, and how to make employment, IP-transfer and B2B agreements legally effective.
Key terms you need to know
Before getting into the details, it helps to clarify the terminology used throughout this article.
| Term | Meaning |
|---|---|
| Article 210 § 1 KSH | A rule requiring the company to be represented in agreements with a management board member by its supervisory board or by a proxy appointed by a shareholders’ resolution, not by the management board. |
| Article 210 § 2 KSH | A special rule for a single-member company: if its sole shareholder is also its sole management board member, every agreement between that person and the company must be made as a notarial deed. |
| Absolute nullity | An agreement is void from the outset by operation of law. Later approval or confirmation cannot “cure” it. |
| Fields of exploitation | The ways a work may be used, such as reproduction, online distribution or modification. An agreement transferring copyright must expressly list them. |
| Chain of title | The legal chain showing who acquired rights to an asset, such as an app’s source code, and on what basis. Investors review it during due diligence. |
| EGM | An extraordinary general meeting of shareholders. It may be held without formal notice if all share capital is represented and nobody objects (Article 240 KSH). |
Why Article 210 KSH affects every founder-CEO
Article 210 § 1 KSH is mandatory law (ius cogens). It cannot be excluded by the company’s articles, a corporate resolution or the parties’ agreement. It applies to every agreement between a company and a management board member, regardless of type or whether it relates to the person’s board duties.
The scope is broad:
- Employment agreements with management board members.
- B2B contracts and service agreements.
- Agreements transferring copyright, including rights to software.
- Amendments to existing agreements.
- Notices terminating or mutually ending agreements.
- Loans, leases and sales between the company and a board member.
The purpose is preventive protection of the company, shareholders and creditors against conflicts of interest. A potential conflict is enough; it is not necessary to prove that the company’s interests were actually harmed (Supreme Court order I UZ 20/21 of 16 November 2021).
For a technology startup where founders are shareholders and board members, Article 210 may apply to nearly every agreement concerning their personal work for the company.
Who is covered, and what form is required
| Company structure | Applicable paragraph | Who represents the company | Special form |
|---|---|---|---|
| Multiple shareholders, multiple-member board | § 1 | Proxy appointed by EGM resolution or supervisory board | No additional form beyond requirements for the agreement itself |
| Multiple shareholders, sole board member | § 1 | Proxy appointed by EGM resolution or supervisory board | No additional form |
| Sole shareholder is also the sole board member | § 2 | Not applicable; both parties are the same person | Notarial deed, or the agreement is void |
| Sole shareholder with a multi-member board | § 1 for agreements with individual board members | Proxy appointed by EGM resolution or supervisory board | No additional form |
If a company has two shareholders who are both board members, neither may sign an agreement on behalf of the company with the other, even if both agree. This is a common founder-startup structure and a common source of errors.
What happens if Article 210 KSH is breached
The Supreme Court consistently confirms that an agreement made in breach of Article 210 § 1 KSH is absolutely null and void under Article 58 § 1 of the Polish Civil Code.
Case law that settles the issue
| Decision | Holding |
|---|---|
| Supreme Court judgment of 3 October 2019, I CSK 122/16 | An agreement made in breach of Article 210 § 1 KSH is void. Article 103 of the Civil Code, concerning confirmation by an unauthorized representative, does not apply, even by analogy. |
| Supreme Court judgment II CSKP 785/22 | An agreement made by someone other than the supervisory board or an EGM-appointed proxy is void and cannot be cured by later approval. |
| Supreme Court judgment of 8 November 2024, II CSKP 80/23 | The Court maintained the absolute-nullity approach and did not apply the amended Article 39 § 1 of the Civil Code. |
| Supreme Court judgment of 18 December 2019, I PK 204/18 | Failure to use a notarial deed in a single-member company under Article 210 § 2 KSH results in absolute nullity, including for employment agreements. |
The 2019 amendment to Article 39 of the Civil Code introduced the concept of an initially ineffective act that may later be confirmed (negotium claudicans). Some commentators argue that this should apply to Article 210 KSH. In post-2019 decisions, the Supreme Court has consistently refused to apply that concept to Article 210 KSH, treating it as a special mandatory provision.
Consequences of nullity: what you lose
A void agreement is treated as never having taken effect. Benefits provided under it are undue benefits under Article 410 § 2 of the Civil Code and may have to be returned.
- Copyright in software: if an IP-transfer agreement is void, the rights never passed to the company. The company uses software without legal title, and the founder or creator remains the owner of the code.
- Employment agreement: there is no valid employment relationship. ZUS may challenge the basis for social-security contributions. Claims for payment may be available only as restitution of an undue benefit, not under the Labour Code (Supreme Court judgment of 4 November 2010, II PK 178/09).
- B2B and civil-law contracts: nullity applies to the original agreement and amendments. Contractual claims are unavailable; only restitution claims may remain.
- National Court Register entry: it may be challenged if the underlying agreement is void.
For a technology company with high founder or contractor rates, correction costs may reach hundreds of thousands of złoty, apart from the risk of losing an investment round.
Transferring software copyright from a founder to the company
A common startup scenario is a founder who wrote code before or during company formation and now wants to transfer software copyright to the company. If the founder is also a board member, the transaction must meet two legal requirements at once.
Two formal requirements
| Requirement | Legal basis | Consequence of breach |
|---|---|---|
| Proper company representation by an EGM-appointed proxy or supervisory board | Article 210 § 1 KSH | Absolute nullity of the agreement |
| Written form expressly listing fields of exploitation | Article 53 of the Copyright Act | Absolute nullity of the copyright transfer |
| Notarial deed if the sole shareholder is also the sole board member | Article 210 § 2 KSH | Absolute nullity of the agreement |
Breaching any one of these requirements breaks the software’s chain of title. The company is not legally the owner of its product.
What a valid IP-transfer agreement must contain
- Written form: handwritten signature on paper or a qualified electronic signature. Email, a scan of a signed contract or an ordinary electronic signature is not sufficient.
- Express fields of exploitation: the agreement cannot use a generic clause such as “all fields of exploitation.” Each field must be listed, such as fixation and reproduction, including in server memory; online distribution; rental or lending of licenses; modification and adaptation; and making the work available online as SaaS.
- Derivative-work rights: the creator retains the right to authorize adaptations even after transferring economic rights. Without an express transfer of that right, the company must obtain the founder’s consent each time it makes a material program modification.
- Source-code delivery: acquiring copyright does not automatically give the company the source code. The agreement needs a separate provision.
- Proper company representation: signature by an EGM-appointed proxy under Article 210 § 1 KSH, or a notarial deed under Article 210 § 2 for a single-member company.
Risks founders often overlook
- Joint authorship: if a founder and others, such as a freelancer or friend, created the program together, one founder’s transfer does not give the company all rights. Consent from every co-author is needed.
- Code written for a former employer: under Article 74(3) of the Copyright Act, economic rights to a program created as part of employment belong to the employer. A founder cannot validly transfer to the company rights to code written as an employee of another company.
- Open-source components: copyleft licenses may restrict rights transfers or require disclosure of source code. Check license compatibility with the company’s business model before signing.
- Contributing IP is not the same as assigning copyright: a company’s articles stating that IP is contributed as an in-kind contribution do not replace a separate copyright-transfer agreement meeting Article 53 of the Copyright Act.
Founders often form a company through the S24 system because it is faster and cheaper: the court fee is PLN 350 rather than PLN 500, and there is no notarial fee. But S24 does not allow in-kind contributions, only cash contributions. The IP transfer must therefore be made under a separate agreement after registration, which is when Article 210 KSH also becomes relevant.
Common errors in resolutions appointing a proxy
Even if you know a proxy is required, mistakes can invalidate the process. Common pitfalls include:
Procedural errors
- No secret ballot: appointing a proxy is a “personal matter” under Article 247 § 2 KSH and requires a secret vote. An open vote makes the resolution defective.
- Written resolution: Supreme Court judgment of 15 June 2012, II CSK 217/11, says an Article 210 proxy cannot be appointed by written procedure under Article 227 § 2 KSH. A shareholders’ meeting is required.
- No agenda item: for a formally convened meeting, rather than one under Article 240 KSH, the agenda must include appointment of the proxy.
Errors in the resolution
- Scope of authority is too broad: Supreme Court resolution of 30 January 2019, III CZP 71/18, rejects a general power of attorney. A specific power, such as to enter employment agreements with board members, is allowed; authority for “all legal acts with board members” is not.
- Scope is too narrow: the resolution authorizes only an employment agreement, but the proxy also signs an IP-transfer agreement. That second agreement is void because it falls outside the proxy’s authority.
- Missing proxy identification: no PESEL number, incorrect personal details or an imprecise description of the person.
Organizational errors
- The management board appoints the proxy: only the shareholders’ meeting may appoint the proxy. A board resolution is ineffective.
- Confusing an Article 210 proxy with a commercial proxy: commercial procuration does not replace an Article 210 power of attorney. A procurator cannot represent the company in agreements with board members.
- Forgetting to revoke the proxy: if a power is not revoked after the transaction, the proxy formally remains authorized and may take unauthorized actions.
Single-member company: Article 210 § 2 KSH
If you are both the sole shareholder and sole management board member, Article 210 § 1 KSH does not apply. Instead, Article 210 § 2 requires every legal act between you and the company to be made as a notarial deed.
The sanction is the same: absolute nullity under Article 73 § 2 of the Civil Code. This applies to employment agreements, IP transfers, B2B contracts and everything else.
The rationale is that a single-member company has no one to appoint a proxy: the sole shareholder cannot vote on an agreement with themselves as the sole board member. The legislature therefore replaced corporate oversight with external oversight by a notary and the registry court. The notary must notify the court of each such act under Article 210 § 3 KSH.
Exception: the notarial-deed requirement does not apply to acts carried out using the S24 template system.
ZUS may examine whether the formal conditions for an agreement serving as a social-insurance basis are valid. A void employment agreement does not establish employee-insurance status. The sole shareholder of a single-member limited liability company is treated as a person conducting non-agricultural business activity under Article 8(6)(4) of the Social Insurance System Act and must pay full ZUS contributions, regardless of whether they actually perform work for the company.
Supervisory board or proxy: which should you choose?
Article 210 § 1 KSH offers two options: the supervisory board or a proxy appointed by the EGM. For startups and scale-ups the choice is usually straightforward, but it helps to understand the differences.
| Criterion | EGM-appointed proxy | Supervisory board |
|---|---|---|
| Minimum size | 1 person | 3 people (Article 215 KSH) |
| Appointment | EGM resolution, ad hoc or for a term | EGM resolution; formal company body |
| Ongoing costs | Minimal, a one-time fee or none | Member compensation and tax/social-contribution duties |
| Scope | Only agreements with board members covered by the resolution | Broad supervision of company activity (Article 219 KSH) |
| Liability | Proxy’s liability under general rules | Members’ liability for damages (Article 293 KSH) |
| Mandatory appointment | No | Yes, when share capital exceeds PLN 500,000 and there are more than 25 shareholders (Article 213 § 2 KSH) |
| Flexibility | High, appointed for specific acts | Low, a standing body with ongoing duties |
For most early-stage startups, an EGM-appointed proxy is sufficient and much simpler. A supervisory board may make sense as the company grows, external investors join or it approaches the mandatory thresholds.
The proxy does not have to be a lawyer. It may be the company’s accountant, a person trusted by the shareholders or legal counsel. It cannot be a board member, because Article 210 KSH is designed to prevent conflicts of interest. Consider appointing a standing proxy for annual terms to simplify operations and avoid convening an EGM for every agreement.
Note: an audit committee does not have authority under Article 210 KSH and cannot replace the supervisory board or proxy for this purpose.
Article 210 KSH in due diligence: what investors check
Venture capital and private equity funds treat Article 210 KSH as a systemic corporate-governance provision. Breaches signal the overall quality of the company’s governance.
Market data illustrate the scale: in the third quarter of 2025, Polish funds invested PLN 464 million across 39 transactions, and the forecast for all of 2025 exceeded PLN 3 billion. At these values, proper corporate documentation is not a formality; it is a condition for closing a transaction.
What the investor’s lawyer checks
- National Court Register extracts: board composition, shareholders and changes over time.
- Articles of association: representation rules, supervisory board provisions and restrictions.
- Shareholders’ meeting minutes: resolutions appointing Article 210 proxies.
- List of powers of attorney: scope, dates and identifying details.
- Agreements with board members: who signed for the company and on what authority.
- IP chain of title: whether software copyright was properly transferred from creators to the company.
Consequences when breaches are discovered
| Scenario | Investor response |
|---|---|
| Minor formal defect, such as one missing set of minutes | Require the records to be corrected before closing. |
| Void IP-transfer agreement | Pause the transaction until a valid agreement is signed; reduce valuation; require representations and warranties. |
| Systemic Article 210 breaches, such as multiple agreements without a proxy | Reduce valuation, require a thorough remediation plan or, in severe cases, withdraw from the transaction. |
| Void employment agreements with founders | Require employment status to be regularized and assess ZUS and tax risks. |
Academic spin-offs and companies whose code was created during founders’ previous employment are especially sensitive cases. Investors check not only whether rights were transferred correctly, but whether the founder had the right to transfer them at all.
Checklist: how to enter into an agreement with a board member
Use this process for every agreement between the company and a management board member.
- Determine which paragraph applies: § 1 for a company with multiple shareholders or a multi-member board, or § 2 if the sole shareholder is also the sole board member.
- For § 1, convene a shareholders’ meeting: Article 240 KSH allows a meeting without formal notice if all share capital is represented and nobody objects.
- Adopt a resolution appointing the proxy: use a secret ballot under Article 247 § 2 KSH. Identify the proxy by name, surname and PESEL, specify which board member they will contract with, the agreement type and its subject matter.
- Record the resolution: prepare EGM minutes with the attendance list, resolution text and voting result.
- The proxy signs for the company: not the board member, a procurator or another shareholder acting without a resolution.
- Archive the records: keep the EGM minutes, resolution, power of attorney and signed agreement together.
- For § 2, arrange a notary: the entire legal act must be made as a notarial deed.
- For an IP transfer, also meet Article 53 of the Copyright Act: written form, express fields of exploitation, derivative-work rights and a source-code delivery provision.
Properly following the process costs a few thousand złoty once. Fixing it afterward, through new resolutions and agreements and potential disputes, costs much more.
How we can help
If your company has founders who are shareholders and board members while also building technology or signing employment and B2B agreements, Article 210 KSH may apply directly to you.
We help founders, boards and scale-ups organize corporate governance, particularly where company law intersects with intellectual property and agreements with management.
- Audit agreements with board members: check whether each employment, IP-transfer and B2B agreement involved a proxy appointed under Article 210 § 1 KSH. Identify gaps and agreements that need to be entered into again.
- Verify the IP chain of title: assess whether software rights were properly transferred from creators to the company, including form, fields of exploitation, derivative-work rights and joint authorship.
- Prepare corporate records: EGM resolutions, powers of attorney and minutes tailored to the specific agreements and board members.
- Prepare for due diligence: organize records before an investment round or M&A transaction so an investor does not find issues that reduce valuation or block closing.
We combine company law with business context, including IP, ownership structure and growth plans, so corporate decisions align with the company’s direction.
Summary: 15 minutes that can protect your assets
Article 210 KSH is easy to overlook and difficult to fix after the fact. An agreement signed without the required proxy is absolutely null and void; a later resolution or confirmation cannot cure it. This applies to employment agreements, IP transfers, B2B contracts and every other legal act between the company and a board member.
For technology startups where founder-CEOs transfer software rights to the company, the risk is twofold: breaching Article 210 KSH breaks the product’s chain of title, while breaching Article 53 of the Copyright Act invalidates the transfer itself. The result may be that the company does not legally own its product, a problem that may surface only during due diligence.
The process is straightforward: an EGM resolution, appointment of a proxy and signature by the proxy. A few thousand złoty and minutes of corporate work may protect an investment round.
If you want to check whether your board agreements and IP records are legally effective, contact us.
Frequently asked questions
Do I need to appoint a proxy every time I sign an amendment to my CEO employment agreement?
Yes. Article 210 § 1 KSH covers all acts concerning the employment relationship, including entering into, amending, terminating or mutually ending an agreement. Each amendment is a separate legal act between the company and a board member. One option is to appoint a standing proxy for annual terms, with authority covering employment agreements with board members, to avoid convening an EGM for every change.
Who can be appointed as proxy? Does it have to be a lawyer?
No. The proxy may be any individual, such as the company’s accountant, someone trusted by the shareholders or legal counsel. It cannot be a board member or procurator; commercial procuration does not replace an Article 210 power of attorney. The resolution should identify the proxy precisely, including name, surname and PESEL, and define the scope of authority.
We have two founder-shareholders on the board. Can one sign an agreement with the other for the company?
No. Article 210 § 1 KSH excludes the entire board from representing the company in agreements with board members. Even if the board has multiple members and both founders agree, neither may sign for the company in an agreement with the other. The company must be represented by an EGM-appointed proxy or the supervisory board.
We already signed an IP-transfer agreement without a proxy. Can we fix it without signing a new agreement?
No. The Supreme Court consistently treats an agreement made in breach of Article 210 § 1 KSH as absolutely null and incapable of being cured, including by later approval from the shareholders’ meeting or supervisory board (Supreme Court judgment II CSKP 785/22). The solution is to convene an EGM, appoint a proxy and enter into a new agreement correctly.
Does Article 210 KSH also apply to B2B contracts, or only employment agreements?
It applies to every agreement between the company and a board member, regardless of type. This includes employment, B2B, service, specific-work, copyright-transfer, loan and lease agreements and other legal acts. It is enough that one party is the company and the other is one of its board members.
How does Article 210 work in a single-member company? Does the sole shareholder-president still need a proxy?
In a single-member company where the sole shareholder is also the sole board member, Article 210 § 1 does not apply. Under Article 210 § 2, every legal act between the shareholder and company must be made as a notarial deed or it is absolutely null and void. The notary must notify the registry court of each act. Failure to use the required form invalidates the agreement.
