Non-compete clauses in partnerships Cover Image

Zakaz konkurencji w spółkach osobowych
Non-compete clauses in partnerships

Author(s): Małgorzata Dumkiewicz
Subject(s): Civil Law
Published by: Krajowa Izba Radców Prawnych
Keywords: partnerships; non-compete clause; engaging in competing interests

Summary/Abstract: The juridical construction of partnerships is, in principle, grounded in the personal involvement of partners in the activities of a company. The statutory non-compete clause resulting from the Article 56 § 2 of the Polish Code of Commercial Companies is therefore related to those partners of partnerships who are entitled to conduct cases and the representation of a company. It does not concern only limited partners who do not have the right to perform operations of a limited partnership or to represent it (Article 121 § 3 of the Polish Code of Commercial Companies) and partners in a limited joint-stock partnership, whose position in a partnership is regulated by the applicable regulations on a joint-stock partnership (Article 126 § 1 item 1 of the Polish Code of Commercial Companies). However, this clause is not absolute, as it may be lifted on the grounds of the explicit or implicit consent of the shareholders. The scope of the non-compete clause in partnerships is referred to in the Article 56 § 1 of the Polish Code of Commercial Companies, which regards all forms of engaging in competing interests, which particularly include the participation in competing companies. Therefore, contrary to the non-compete clauses in capital companies (Articles 211 and 380 of the Polish Code of Commercial Companies), participation in competing entities is recognized in the context of the Article 56 § 2 of the Polish Code of Commercial Companies as a form of engaging in competing interests, and not as a separate form of a prohibited competing activity. However, the notion of competing interests itself has not been defined in the provisions of the Polish Code of Commercial Companies, while those forms of an “out-of-business” involvement of partners that are considered to be engaging in competing interests have been indicated only as examples. These include the participation of a partner in a competing company as: a partner in a civil partnership, general partnership, partner in a partner company, general partner in a limited partnership and limited joint-stock partnership, or as a member of a body of the company (i.e., mainly a board member of a competing capital company). Nonetheless, due to the fact that the forms of engaging in competing interests indicated in the Article 56 § 2 of the Polish Code of Commercial Companies do not represent a complete list, other types of competing activities of partners of a partnership may also be considered as violating the provisions of the Article 56 § 2 of the Polish Code of Commercial Companies.

  • Issue Year: 2020
  • Issue No: 3
  • Page Range: 11-24
  • Page Count: 14
  • Language: Polish