In the course of changes in legislation aimed at revolutionizing the conduct of business in Poland, alongside the Act from the 6th of March 2018.
– In entrepreneurs’ Law, the legislator has established a new legal institution – succession management of an enterprise in inheritance. The details of this form of enterprise management are described in the Act from the 5th of July 2018 on succession management of a natural person’s enterprise.
Who, when, and how may appoint a succession manager?
The appointment of a succession manager is possible in the situation of the death of a natural person conducting business activity entered in the Central Register of Business Activity and Information. The task of the succession manager is primarily to ensure the continuity of the business after the owner’s death so that his sudden death does not cause negative financial effects for the new owners.
A succession manager may be appointed in two ways – he may be appointed while the entrepreneur is still alive (in which case he takes over the management as a rule at the moment of the entrepreneur’s death) or appointed after the entrepreneur’s death (in which case he takes over the management at the moment of entry in the Central Register of Economic Activity (CEIDG).
In order to validly appoint a successor manager during the entrepreneur’s life, it is necessary to keep a written form – under pain of nullity. What is important, the succession manager himself must also consent to the appointment in writing.
If the succession manager was not appointed upon the entrepreneur’s death, the succession manager may be appointed after his/her death by his/her spouse (if he/she is entitled to a share in the business in the estate), statutory or testamentary heir of the entrepreneur who accepted the inheritance or a legatee who accepted a legacy of inheritance, if he/she is entitled to a share in the business inheritance. After the decision on the confirmation of inheritance acquisition becomes valid, the succession manager may only be appointed by the new owner of the enterprise. What is important is that the appointment of a succession manager after the death of the entrepreneur requires a form of a notarial deed and must be made within 2 months – after that time the right to appoint a successor manager expires.
The activity of the succession manager
A succession manager performs his role acting in his own name, but on behalf of the owners of the inherited company. This means that the owners of the business under succession are responsible for the liabilities incurred by the succession manager and they are entitled to the profits he earns.
The rights and obligations of a successor manager in the area of civil law relations are not significantly different from the rights and obligations of a deceased entrepreneur – the manager may be sued and he/ she is entitled to sue. Moreover, statements and documents regarding the business may be delivered to him/her. He/she also takes over the employer’s obligations towards the employees of the business under inheritance (provided that he/she is appointed within 30 days of the employer’s death). The act also allows for retaining, for a certain period of time, the right to use some of the administrative and legal decisions issued in favor of the entrepreneur (e.g. concessions). What is important, in the case of appointing an estate administrator and a succession manager at the same time, the inherited business is not subject to the estate administrator – the business therefore acts, so to speak, independently from the rest of the remaining inheritance mass.
Succession management allows to maintain continuity in the functioning of an enterprise after the death of its owner. Thanks to this institution, contracts concluded by the entrepreneur do not expire, but are continued – to the benefit of both contractors and heirs of the deceased. By means of this institution, the legislator has given the heirs a chance to put the deceased’s affairs in order and take control over the enterprise in an organized and planned manner, without the need to introduce sudden changes in the structure and the necessity to build relations with contractors from scratch. It is undoubtedly an institution that secures the interests of those entrepreneurs who as sole proprietors have created a large and prosperous enterprise with a well-developed structure and a network of regular business partners.