{"id":3880,"date":"2026-08-26T11:14:40","date_gmt":"2026-08-26T11:14:40","guid":{"rendered":"https:\/\/sawaryn.com\/?p=3880"},"modified":"2026-10-23T11:27:17","modified_gmt":"2026-10-23T11:27:17","slug":"article-210-ksh-founder-ceo-agreements","status":"publish","type":"post","link":"https:\/\/sawaryn.com\/en\/publikacje\/article-210-ksh-founder-ceo-agreements\/","title":{"rendered":"Article 210 KSH in Practice: Founder-CEOs and Their Companies"},"content":{"rendered":"

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: \u201cThis IP agreement is invalid. The app legally still belongs to you personally, not the company.\u201d The funding round stops. One shareholders\u2019 resolution could have prevented it in 15 minutes.<\/p>\n

It sounds extreme, but it is not. Article 210 \u00a7 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\u2019 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<\/strong>. It cannot be fixed afterward.<\/p>\n

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.<\/p>\n

Key terms you need to know<\/h2>\n

Before getting into the details, it helps to clarify the terminology used throughout this article.<\/p>\n\n\n\n\n\n\n\n\n\n\n
Term<\/th>\nMeaning<\/th>\n<\/tr>\n<\/thead>\n
Article 210 \u00a7 1 KSH<\/strong><\/td>\nA 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\u2019 resolution, not by the management board.<\/td>\n<\/tr>\n
Article 210 \u00a7 2 KSH<\/strong><\/td>\nA 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.<\/td>\n<\/tr>\n
Absolute nullity<\/strong><\/td>\nAn agreement is void from the outset by operation of law. Later approval or confirmation cannot \u201ccure\u201d it.<\/td>\n<\/tr>\n
Fields of exploitation<\/strong><\/td>\nThe ways a work may be used, such as reproduction, online distribution or modification. An agreement transferring copyright must expressly list them.<\/td>\n<\/tr>\n
Chain of title<\/strong><\/td>\nThe legal chain showing who acquired rights to an asset, such as an app\u2019s source code, and on what basis. Investors review it during due diligence.<\/td>\n<\/tr>\n
EGM<\/strong><\/td>\nAn extraordinary general meeting of shareholders. It may be held without formal notice if all share capital is represented and nobody objects (Article 240 KSH).<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Why Article 210 KSH affects every founder-CEO<\/h2>\n

Article 210 \u00a7 1 KSH is mandatory law (ius cogens<\/em>). It cannot be excluded by the company\u2019s articles<\/a>, a corporate resolution or the parties\u2019 agreement. It applies to every<\/strong> agreement between a company and a management board member, regardless of type or whether it relates to the person\u2019s board duties.<\/p>\n

The scope is broad:<\/p>\n

    \n
  1. Employment agreements with management board members.<\/li>\n
  2. B2B contracts and service agreements.<\/li>\n
  3. Agreements transferring copyright, including rights to software.<\/li>\n
  4. Amendments to existing agreements.<\/li>\n
  5. Notices terminating or mutually ending agreements.<\/li>\n
  6. Loans, leases and sales between the company and a board member.<\/li>\n<\/ol>\n

    The purpose is preventive protection of the company, shareholders and creditors against conflicts of interest<\/strong>. A potential conflict is enough; it is not necessary to prove that the company\u2019s interests were actually harmed (Supreme Court order I UZ 20\/21 of 16 November 2021).<\/p>\n

    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.<\/p>\n

    Who is covered, and what form is required<\/h3>\n\n\n\n\n\n\n\n\n
    Company structure<\/th>\nApplicable paragraph<\/th>\nWho represents the company<\/th>\nSpecial form<\/th>\n<\/tr>\n<\/thead>\n
    Multiple shareholders, multiple-member board<\/td>\n\u00a7 1<\/td>\nProxy appointed by EGM resolution or supervisory board<\/td>\nNo additional form beyond requirements for the agreement itself<\/td>\n<\/tr>\n
    Multiple shareholders, sole board member<\/td>\n\u00a7 1<\/td>\nProxy appointed by EGM resolution or supervisory board<\/td>\nNo additional form<\/td>\n<\/tr>\n
    Sole shareholder is also the sole board member<\/td>\n\u00a7 2<\/td>\nNot applicable; both parties are the same person<\/td>\nNotarial deed<\/strong>, or the agreement is void<\/td>\n<\/tr>\n
    Sole shareholder with a multi-member board<\/td>\n\u00a7 1 for agreements with individual board members<\/td>\nProxy appointed by EGM resolution or supervisory board<\/td>\nNo additional form<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    If a company has two shareholders who are both board members, neither may sign an agreement on behalf of the company with the other<\/strong>, even if both agree. This is a common founder-startup structure and a common source of errors.<\/p>\n

    What happens if Article 210 KSH is breached<\/h2>\n

    The Supreme Court consistently confirms that an agreement made in breach of Article 210 \u00a7 1 KSH is absolutely null and void<\/strong> under Article 58 \u00a7 1 of the Polish Civil Code.<\/p>\n

    Case law that settles the issue<\/h3>\n\n\n\n\n\n\n\n\n
    Decision<\/th>\nHolding<\/th>\n<\/tr>\n<\/thead>\n
    Supreme Court judgment of 3 October 2019, I CSK 122\/16<\/td>\nAn agreement made in breach of Article 210 \u00a7 1 KSH is void. Article 103 of the Civil Code, concerning confirmation by an unauthorized representative, does not apply, even by analogy.<\/td>\n<\/tr>\n
    Supreme Court judgment II CSKP 785\/22<\/td>\nAn agreement made by someone other than the supervisory board or an EGM-appointed proxy is void and cannot be cured by later approval.<\/td>\n<\/tr>\n
    Supreme Court judgment of 8 November 2024, II CSKP 80\/23<\/td>\nThe Court maintained the absolute-nullity approach and did not apply the amended Article 39 \u00a7 1 of the Civil Code.<\/td>\n<\/tr>\n
    Supreme Court judgment of 18 December 2019, I PK 204\/18<\/td>\nFailure to use a notarial deed in a single-member company under Article 210 \u00a7 2 KSH results in absolute nullity, including for employment agreements.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    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<\/em>). 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.<\/p>\n

    Consequences of nullity: what you lose<\/h3>\n

    A void agreement is treated as never having taken effect. Benefits provided under it are undue benefits under Article 410 \u00a7 2 of the Civil Code and may have to be returned.<\/p>\n

      \n
    1. Copyright in software:<\/strong> 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.<\/li>\n
    2. Employment agreement:<\/strong> 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).<\/li>\n
    3. B2B and civil-law contracts:<\/strong> nullity applies to the original agreement and amendments. Contractual claims are unavailable; only restitution claims may remain.<\/li>\n
    4. National Court Register entry:<\/strong> it may be challenged if the underlying agreement is void.<\/li>\n<\/ol>\n

      For a technology company with high founder or contractor rates, correction costs may reach hundreds of thousands of z\u0142oty, apart from the risk of losing an investment round.<\/p>\n