On August 24, 2018, the Act of July 5, 2018 on the succession management of a natural person’s enterprise was announced in the Polish Journal of Laws under No. 1629 (hereinafter refferred to as the ‘Succession Management Act’ or the ‘Act’).
Subject of regulation
The Succession Management Act regulates:
- the rules of temporary management of the enterprise after the entrepreneur’s death, who on his own behalf performed business activities on the basis of an entry into the Central Register and Information on Economic Activity, hereinafter referred to as “CEIDG”, and
- the rules of continuing business operations performed with the use of this enterprise
Enterprise in inheritance
The act introduces the definition of the concept of the ‘enterprise in inheritance’ (przedsiębiorstwo w spadku in Polish).
Generally the enterprise in inheritance includes intangible and tangible assets intended for performance economic activity by the entrepreneur, being the entrepreneur’s property at the time of his death.
Establishing the succession management
According to the act the succession management may be (generally) established:
- by the entrepreneur or
- by the spouse of the entrepreneur or her/his heirs (if she/he did not establish the succession management)
Temporary management of the enterprise after the entrepreneur’s death
In the event that the succession manager has not been appointed, the Act sets out the rules for the exercise of temporary management of the enterprise after the entrepreneur’s death.
This temporary management may be executed untill the day of establishement of the succession management or the day of expiry of the right to establish the succession management (if the succession management has not been established).
The right to establish the succession management expires after two months from the entrepreneur’s death.
When the succession management was established it is executed by the appointed succession manager.
The succession manager is obliged to run the enterprise under previous name with a note “in inheritance” (in Polish: “w spadku”) and is authorised to court and out-of-court activities related to running an enterprise in inheritance.
The succession manager acts on his own behalf, for the account of the owner of the enterprise in inheritance.
The succession manager performs ordinary management activities in matters arising from the conduct enterprises in inheritance. For the activities beyond the scope of ordinary management the succession manager must obtaint he the consent of all owners of the enterprise in inheritance, and in the absence of such consent – with the permission of the court.
The succession management may be as a rule excerised for a maximum two years form the date of the entrepreneur’s death.