Polish Group Companies and Holding Law in Practice: Managing Intragroup Instructions and Directors’ Duties

Poland has recently introduced a modern framework for group companies and holding law, designed to reflect how international corporate structures actually operate. For foreign investors, this is an opportunity to bring Polish subsidiaries closer to global governance standards – but also a source of new risks if intragroup instructions and directors’ duties are not handled correctly in practice.

In cross-border structures, a Polish company is often expected to follow decisions taken by a foreign parent or holding entity. At the same time, Polish law has traditionally emphasised the autonomy of each company’s management board and its strict duty to act in the company’s best interest. The new rules on Polish group companies and holding law are meant to bridge this tension – yet they require conscious implementation, clear documentation and careful risk allocation.

As a corporate and international lawyer working with foreign investors, I see that many groups underestimate the legal complexity behind “simple” internal instructions. This article explains how the new framework works, what it means for directors’ liability, and how to organise intragroup instructions so that they are enforceable, compliant and defensible towards minority shareholders and creditors.

What is a “group of companies” under Polish holding law?

The current Polish holding law introduces a statutory concept of a group of companies (in Polish: “grupa spółek”). It is based on a relationship of dominance and dependence between the parent company and its subsidiaries, combined with a common interest pursued in a coordinated manner. This is different from a purely accounting-based “capital group” and has concrete legal effects.

For a structure to qualify, the parent and the subsidiary must formally resolve to participate in a group of companies and disclose this in the relevant registers. Only then can they fully use the mechanisms provided by Polish holding law, including binding intragroup instructions. Without this formalisation, the group effectively operates in a legal “grey zone”, where traditional corporate law rules continue to apply in a stricter form.

For international investors, this means that the decision whether to opt into the statutory group regime is strategic. It should be preceded by a review of the existing governance model, intra-group agreements and the risk appetite of both the parent company and local management boards.

How is “intragroup instruction” defined and when can it be used?

An intragroup instruction is a formal directive issued by a parent company to its subsidiary that participates in the same statutory group of companies. It concerns a specific action or omission by the subsidiary, justified by the common interest of the group. Polish holding law provides detailed rules on how such instructions should be issued, accepted or refused.

Typically, an intragroup instruction must be made in writing or in electronic form and specify at least: the expected action, its legal and economic basis, and the benefits or potential detriments for the subsidiary. This formalism is not purely bureaucratic – it is crucial for the assessment of directors’ duties and potential liability for damages.

Used correctly, intragroup instructions allow the parent to coordinate strategy within a Polish group of companies more transparently. Used incorrectly, they may create evidence of undue influence, exposing both the parent and the subsidiary’s board members to litigation from creditors or minority shareholders.

Directors’ duties in Polish group companies: who do they really serve?

Under traditional Polish company law, management board members owe their directors’ duties to the company itself, not to its shareholders or the wider group. They must act with due diligence, loyalty, and in the best interest of that specific entity. The holding law reforms have not abandoned this principle, but they nuance it in the context of a properly formed group of companies.

Where a statutory group exists and has been duly disclosed, a subsidiary’s directors may – under defined conditions – legitimately consider the interests of the group as a whole, not only the standalone interests of the subsidiary. However, this does not grant them immunity. They remain responsible for monitoring the company’s solvency, respecting mandatory law, and protecting creditors from excessive risk.

In practice, this means that board members must systematically document how they balanced the interest of the group against the interests of their own company when following an intragroup instruction. This documentation can become critical evidence in any future dispute or investigation.

Can directors safely follow intragroup instructions from the parent company?

Polish holding law creates a conditional “safe harbour” for directors who implement intragroup instructions. If certain statutory requirements are met – including proper group registration, correct form and content of the instruction, and an internal analysis of consequences – the scope of directors’ liability for resulting loss may be limited.

However, this safe harbour is not absolute. Directors cannot lawfully follow instructions that would clearly violate mandatory law, lead to insolvency, or disregard the justified interests of creditors. In such cases, their duty is to refuse or at least postpone implementation, even at the cost of tension with the parent company.

From a governance perspective, boards should adopt internal procedures for reviewing intragroup instructions, involving legal and financial analysis, and recording dissenting views where appropriate. Such procedures greatly improve the defensibility of board decisions if challenged by regulators, courts or stakeholders.

When must directors refuse an intragroup instruction?

There are scenarios in which Polish law expects the management board of a subsidiary to refuse an intragroup instruction. Key triggers include a high risk of the company’s insolvency, a serious threat to its long-term viability, or a clear conflict with the interests of its creditors or minority shareholders that cannot be adequately mitigated.

The threshold is not purely theoretical. Courts will examine whether a reasonably diligent director, with access to the same information, should have foreseen the negative consequences. Therefore, boards should ensure that they maintain robust financial forecasting and risk management tools, rather than relying solely on assurances from the parent.

Refusal must be properly justified and documented. A bare “no” is never sufficient. A carefully reasoned written response, outlining the perceived risks and legal constraints, not only fulfils statutory requirements but also serves as crucial evidence of compliance with directors’ duties.

How does Polish holding law affect liability towards shareholders and creditors?

The introduction of statutory Polish group companies and holding law does not eliminate the traditional liability for damages owed to the company, its shareholders and creditors. Instead, it reshapes how courts may assess the legality of actions taken in the interest of the group. Directors can invoke the common interest of the group as a partial defence, but only if the formal conditions of the regime were respected.

For majority shareholders and group parents, the new framework provides more predictable tools to defend group-oriented decisions. Yet for minority shareholders and creditors, it introduces new litigation angles: they may challenge whether the group was properly formed, whether intragroup instructions complied with the statute, or whether negative effects on the subsidiary were adequately compensated.

Foreign investors should therefore align their Polish governance policies with group-wide standards on conflict management, related party transactions and capital maintenance. A robust compliance framework is one of the best risk mitigation tools under the new regime.

Practical governance: how should groups organise intragroup instructions?

From a practical standpoint, the key to managing intragroup instructions in Poland is standardisation and transparency. International groups should design a clear internal policy that defines: who can issue instructions on behalf of the parent, in what form, based on what analysis, and with what internal approvals.

Many groups benefit from implementing standard templates for instructions and board responses. These templates can guide decision-makers through essential elements such as legal basis, expected benefits, quantified risks, and proposed safeguards for the subsidiary. Over time, they create a consistent audit trail that is invaluable in demonstrating compliance with directors’ duties.

Such policies should be integrated into the broader group compliance and risk management systems, including training for local board members and in-house counsel. Regular review of the policy – particularly after major transactions or regulatory changes – is advisable.

Interaction with international corporate structures and shareholder agreements

In many foreign-owned Polish companies, the reality of control is shaped less by statutory law and more by shareholder agreements, financing documents and informal group practices. The new Polish holding law interacts with these instruments in complex ways, and sometimes exposes inconsistencies between “paper” and practice.

Where shareholder agreements already contain detailed governance and instruction mechanisms, they should be reviewed and potentially aligned with the statutory concept of a group of companies. Otherwise, there is a risk that formally binding contractual clauses conflict with the mandatory rules on board autonomy and directors’ liability in Poland.

International structures should also consider how Polish intragroup instructions fit into the group’s global documentation and reporting. For listed or regulated parents, the Polish framework can support more credible disclosure on related party transactions and risk control across jurisdictions.

Why foreign investors should not ignore the Polish group companies regime

Some international groups initially view the Polish holding law as optional and administratively burdensome, preferring to continue with informal governance practices. This approach overlooks the potential advantages of a properly implemented statutory group of companies – and the risks of remaining outside the regime while de facto exercising group control.

By opting in, a parent company gains a more defensible legal basis for coordinating business strategy, capital allocation and risk across its Polish subsidiaries. At the same time, local board members obtain clearer rules on how to reconcile the group interest with their personal directors’ duties and potential liability for damages.

Ignoring the regime, on the other hand, may leave both sides exposed: parents may be accused of shadow directorship or abusive control, while board members may lack any statutory safe harbour when executing group decisions that later turn controversial.

How a specialised Polish law firm can support compliance and risk management

Adapting to the practical realities of Polish group companies and holding law is not merely a question of amending articles of association. It requires a structured review of the entire governance ecosystem: decision-making flows, internal policies, board documentation, and alignment with international standards.

A law firm experienced in both corporate and international matters can assist in designing and implementing a tailored framework for intragroup instructions and directors’ duties in Poland. This often includes regulatory analysis, contract alignment, training for management boards, and ongoing advisory support in complex or contentious situations.

If your group operates or plans to operate in Poland, I recommend seeking dedicated legal support. The firm Kopeć Zaborowski Adwokaci i Radcowie Prawni provides comprehensive advisory services in this area, helping foreign investors structure their Polish operations in a way that is compliant, efficient and defensible both locally and internationally.

Key takeaways for boards and parent companies

The evolving framework for Polish group companies and holding law fundamentally reshapes how intragroup control can be exercised in a legally secure manner. Parent companies gain formal tools to direct subsidiaries, while boards of Polish companies receive clearer statutory guidance on when and how they may follow intragroup instructions.

For directors, the central message is that their duties remain personal, active and non-transferable. They must understand the statutory regime, critically assess each instruction, and document their reasoning. For international parents, the focus should be on transparency, standardisation and respect for the specific features of Polish corporate law.

Properly managed, the new regime can strengthen corporate governance, enhance predictability, and reduce disputes. Poorly managed, it may become a source of litigation and regulatory scrutiny. Early, well-informed adaptation is therefore in the best interest of all stakeholders in a Polish group of companies.

Bibliography

• Polish Commercial Companies Code (Kodeks spółek handlowych), in particular provisions on group of companies (grupa spółek) as amended by the Act of 9 February 2022 (Dz.U. 2022 poz. 807).
• Explanatory Memorandum to the Draft Act amending the Commercial Companies Code and certain other acts, Sejm print no. 1515 (2021).
• OECD, “Guidelines on Corporate Governance of State-Owned Enterprises” (2015), sections on group structures and directors’ duties.
• European Commission, “Report on the application of the Shareholder Rights Directive II” (2022), parts concerning related party transactions and group governance.
• Selected commentaries on the Polish Commercial Companies Code (legal scholarship, 2022–2024), including analyses of the group of companies regime and management board liability.