In limited liability companies it is worth the while to check when contracts were executed even though the management board’s term of office has already expired or the board members no longer have mandates to serve on the board.

1 March 2019 saw entry into force of an important change to Article 39 of the Civil Code. The law now says that if the board of a legal entity that has a legal person status enters into a contract on behalf of that entity without, or in excess of, its authority (dealing as a “false board”), the contract will not be valid if it is not ratified by the entity. Such a ratification may be expressed to the other party in any form at the initiative of the entity itself or the other party may set a time for the entity to do so. If ratification is not provided within that time, the contract becomes invalid.

For the full text of the article by our partner Anna Skowron, see Rzeczpospolita on-line and the Dobra Firma weekly.