The supervisory board in a limited joint-stock partnership

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In partnerships, which include a limited joint-stock partnership, the rule is that the control over its operation is exercised by the partners themselves. A supervisory board in a limited joint-stock partnership is possible under certain circumstances, but sometimes its establishment is obligatory. Check below.

When can a supervisory board be appointed in a limited joint-stock partnership?

In the case of this company, the legislator regulated this issue in a manner typical of capital companies. The supervisory board in a limited joint-stock partnership may be appointed at any time - it depends on the will of the partners. On the other hand, in certain situations, appointing a council is even an obligation of the partners. 

Attention!

When the number of shareholders in a limited joint-stock partnership exceeds 25, it is necessary to appoint a supervisory board.

In practice, it often happens that from the beginning of the company's existence there is no obligation to appoint a supervisory board. However, in the course of its operation, the number of its shareholders increases so that the condition for appointing a board is met. In this case, is it necessary to change the articles of association? Fortunately, the formalities in this situation are limited, as such an obligation to establish a council arises under the law. However, this fact should be reported to the register.

If the supervisory board in a limited joint-stock partnership was appointed in the course of its operation, and the rules of the board's operation are not provided for in the company's articles of association, the organization of the board's operation is the responsibility of the general meeting.

Important!

If the number of shareholders in a limited joint-stock partnership does not exceed 25 people, and the articles of association do not provide for the possibility of establishing a supervisory board, its appointment must be preceded by an amendment to the articles of association.

The supervisory board in a limited joint-stock partnership and its composition

The supervisory board of a limited joint-stock partnership consists of at least 3 members. As a rule, members of the board are appointed for a term of office that may not exceed 5 years, and each member of the board is appointed for a separate term of office. The company's articles of association may, however, provide otherwise in the latter matter.

By whom is the supervisory board appointed in a limited joint-stock partnership?

The competence to appoint a supervisory board in a limited joint-stock partnership rests with the general meeting. Importantly, since the Commercial Companies Code does not mention the appointment of the supervisory board in the competences of the general partners, it should be assumed that the appointment and dismissal of the supervisory board by an absolute majority of votes belongs to the shareholders. Moreover, a general partner who has obtained the status of a shareholder in a limited joint-stock partnership also does not have this competence - during the election of supervisory board members, he cannot exercise voting rights. It is also not permissible for a general partner-shareholder to be a shareholder's proxy at a general meeting the subject of which is, inter alia, electing members of the supervisory board. However, this principle suffers from a certain limitation.

Important!

A general partner is prohibited from appointing members of the supervisory board because he is the one in charge of the partnership's affairs, therefore the prohibition ceases to apply when the general partner is deprived of the right to conduct affairs or represent the partnership. If such a general partner is also a shareholder, he may appoint members of the supervisory board.

A supervisory board in a limited joint-stock partnership - who can be its member?

The Commercial Companies Code defines negative premises for performing the function of a supervisory board member in a limited joint-stock partnership. As a rule, any natural person with full legal capacity may be a member of the council. However, these people exclude those who:

  • have been convicted by a final judgment for offenses related to the protection of information, credibility of documents, against property, business transactions, money and securities trading;

  • are general partners managing the partnership's affairs or representing it;

  • are a proxy, liquidator, head of a branch or plant, chief accountant employed in the company, legal counsel, attorney-at-law or persons directly reporting to the general partner or liquidator.

What are the competences of the supervisory board in a limited joint-stock partnership?

In a limited joint-stock partnership, its operations are supervised by the general partners, but only in a situation where the partners do not appoint a supervisory board.

Moreover, the supervisory board may delegate its members to perform the functions of general partners in a situation where none of the general partners authorized to exercise management or conduct of the partnership's affairs may perform their duties. However, this body has no power to suspend the general partners from performing their duties.

In order to exercise control over the company, the supervisory board in a limited joint-stock partnership may:

  • examine all company documents;

  • demand explanations and reports from general partners and employees of the company;

  • audit the company's assets.

The special competences of the supervisory board, exercised at the general meeting, include the annual assessment of general partners 'reports on the company's operations and financial statements for the previous financial year, as well as assessment of general partners' conclusions regarding the distribution of profit or coverage of loss.

Attention!

The supervisory board of a limited joint-stock partnership may bring an action for compensation for the damage caused against the general partners authorized to conduct affairs and represent the partnership.