Consumer Bankruptcy of a Management Board Member of a Capital Company
Today on the blog I would like to explain briefly whether consumer bankruptcy can be declared at all for a manager, that is a person serving as a management board member in a capital company, where the company has become insolvent and the manager has not responded to this, despite the statutory obligation imposed on him or her by holding a position on the management board.
Consumer Bankruptcy of a Management Board Member of a Capital Company: What Does the Law Say?
This issue raises certain doubts prima facie because of Article 491(4) section 2 point 3 of the Bankruptcy Law, which obliges the bankruptcy court to dismiss a consumer's bankruptcy petition where the debtor, while under such an obligation and contrary to the provisions of the Act, did not file a bankruptcy petition on time. On the basis of this provision, some argued that persons sitting on the management boards of capital companies, who are under a statutory obligation to file a bankruptcy petition on time for the legal person on whose behalf they act, cannot make use of consumer bankruptcy where they have not fulfilled that obligation.
This view, however, is wrong and contrary to the ratio legis of the provision. The legislator's intention, as shown by the explanatory memorandum to the draft amendment introducing the liberal provisions on consumer bankruptcy, was for this provision to cover only debtors who previously ran a sole proprietorship.
As a Management Board Member of a Capital Company, You Have the Right to Declare Consumer Bankruptcy
The fact that a consumer, contrary to the provisions of the Bankruptcy Law, did not file a bankruptcy petition within the proper time for the company he or she represented does not deprive that consumer of the possibility of seeking a declaration of consumer bankruptcy.
Likewise, the fact that such a person, at the time of seeking the declaration of bankruptcy, still sits on the management board of a company in good financial condition does not prevent him or her from filing such a petition, because a management board member of a commercial company, if he or she does not run a sole proprietorship, is not an entrepreneur within the meaning of the Entrepreneurs' Law.
Legal basis:
- Act of 28 February 2003, the Bankruptcy Law (Journal of Laws of 2017, item 2344, as amended),
- Act of 6 March 2018, the Entrepreneurs' Law (Journal of Laws of 2018, item 646, as amended).
