On July 19, 2019, the Sejm of the Republic of Poland passed the Act Amending the Commercial Enterprise Code and Certain Other Acts (Journal of Laws 2019, Item 1655), introducing the simple joint-stock company. The amendments were originally scheduled to enter into force on July 1, 2021. It should be noted that, due to amendments to the Act Amending the Code of Civil Procedure, the provisions regarding the entry into force of the Code of Civil Procedure were modified by the Member of Parliament and postponed by one year, with the entry into force now possible from March 1, 2021. The willingness to change the entry into force of the new regulations stems from the introduction of provisions on personal protective equipment (PPE) and regulations on the electronic registration procedure, the introduction of which was originally planned for 2021.
Formation of a simple public limited company
Establishment of a new company
A simple joint-stock company (PSA) can be formed for any purpose by one or more persons . This means that a simple joint-stock company can also be formed by a single person. The company can be formed using the contract template provided in the S24 ICT system, after the articles of association have been signed with qualified electronic signatures or trusted signatures. The exception, however, is when a PSA is formed based on contributions in kind. In this case, the articles of association require the form of a notarial deed, and the value of the contributions in kind is not verified by a certified auditor. The articles of association should state the following: the name and registered office of the company, the object of the company's activity, the number, series and number of shares, the privileges associated therewith, shareholders holding individual shares and the issue price of the shares, if not cash contributions – the subject of these contributions, shares and shareholders received for contributions in kind, including these shares, the bodies of the company, the number of members of the management board and the supervisory board (if any) or at least the minimum and maximum number of members of these bodies and the duration of the company (fixed or indefinite).
Conversion of another company
A simple public limited company can be formed not only by establishing a new company under the conditions laid down in the Commercial Code, but also by merging another existing company into a PSA (Public Limited Company).
The company of a simple public limited company
The company name can be freely chosen, but should include the additional designation " simple public limited company ". As with other commercial enterprises, it is permissible to use an appropriate abbreviation in business transactions – in the case of a simple public limited company, it is "PSA".
Share capital and contributions
In a simple joint-stock company, the share capital, consisting of shareholders' contributions, is at least 1 PLN (one zloty), and the amount of share capital is not specified in the articles of association. It should be noted that in a "normal" joint-stock company, the share capital is currently 100,000 PLN (one hundred thousand zlotys), which unfortunately presents an insurmountable obstacle for many entrepreneurs.
Contributions to the company can be made in two different ways: in the form of cash and in the form of a non-cash contribution in the form of an inalienable right to real estate or labor . This means that only individuals who contribute their knowledge and skills to the company can become shareholders. The existing regulations of the Code of Commercial Companies did not permit this for partners/shareholders – capital was always secured by tangible assets to allow for objective valuation. In addition to the possibility of contributing an inalienable right to property or performing labor, the legislator recognized that experience, knowledge, or certain skills can be commercialized and represent real value. This is intended, in principle, to allow for better adaptation of the company's business activities and the nature of its business relationships to constantly changing economic realities.
The change in regulations means that in a simple joint-stock company, the company's share capital consists exclusively of contributions with in-kind value, i.e., a sale value for the company. All shares are of the same nature and have no minimum value.
Contributions to share capital should be paid in full to the company within three years of its registration in the commercial register. The shareholder's full contribution is confirmed by the board of directors in the form of a corresponding resolution. If the value of the contribution in kind to the share capital has been significantly overestimated, the shareholder who made such a contribution is obligated to compensate the company for the shortfall. It should be noted that in the case of an undervalued contribution in kind, the members of the board of directors are jointly and severally liable with the shareholder, unless they are not at fault.
Increase in the share capital of a simple public limited company
An increase in the share capital of a simple public limited company is possible according to the provisions of the agreement, i.e., without the need to amend the articles of association and without legal restrictions regarding the maximum amount or duration of such an increase. This is because the documentation, including the issuance of new shares, will only be possible via electronic communication.
Shares of a simple public limited company
Dematerialization of stocks
Shares in a general joint-stock company will no longer exist in paper form. This is related to the so-called dematerialization of shares , meaning that the paper document of the registered share and the bearer share will be replaced by a digital record in the ICT system. The purpose of introducing dematerialization is to facilitate the identification of the company entitled to the shares. This is intended to prevent abuses such as money laundering. Furthermore, it should be noted that with the implementation of the aforementioned regulations, the tax authorities will have unrestricted access to information about shareholders of general-stock companies and limited partnerships held by the owners.
Sale and encumbrance of shares
Shares in a general partnership can encumbered and sold in so-called documentary form , under penalty of invalidity. It should be noted that the documentary form for conducting legal transactions was incorporated into the Civil Code on September 8, 2016. To maintain the documentary form of a legal transaction, a declaration of intent must be submitted in a document that allows the person making the declaration to be identified (e.g., by email, instant messaging, electronic media, etc.). Thus, the documentary form is far less formal than a written form, which requires the document containing the content of the submitted declaration of intent to be signed. This means that in the case of a general partnership, its shares can be encumbered and sold by declarations of intent recorded and transmitted remotely using electronic means of communication, i.e., without the need to issue a share certificate.
Shareholder register
Every transaction and issuance of shares in a general partnership (GPP) is subject to registration in the shareholders' register , which can also be maintained electronically. The GPP is obligated to maintain such a register and must entrust this task to a company authorized to manage securities accounts or to a notary public. The shareholders' register is accessible to both the company and its shareholders . The entity maintaining the register makes entries upon request from the company or any person with a legitimate interest in such registration. It is important to note that only the person registered in the register is considered a shareholder. This fact is relevant, for example, in matters concerning dividend payments. Regarding the shareholders' register, it should be noted that the entity maintaining the register—i.e., the company authorized to manage securities accounts or a notary public—is responsible for the proper fulfillment of all obligations associated with its management.
Organs of a simple public limited company
Board of Directors or Supervisory Board
In a simple public limited company, a management board or a board of directors established. The management board consists of one or more members and manages the company's affairs, representing the company to third parties. Members of the management board are appointed, dismissed, and suspended by the shareholders by resolution. However, the articles of association may stipulate otherwise. It should be noted that if a supervisory board is established in a company, the members of the management board are appointed, dismissed, and suspended by the supervisory board, not by the shareholders. As in a "traditional" public limited company, the management board is entitled to appoint a proxy – the appointment requires the consent of all members of the management board. Conversely, the proxy can be revoked by any member of the management board. Like the board of directors, the board of directors manages the company's affairs, represents the company, and oversees the conduct of its business. The board of directors consists of one or more members who can be appointed, dismissed, and suspended by the shareholders by resolution. As with the management board, the appointment of a proxy requires the consent of all directors. Any director can revoke the proxy. If the board of directors consists of more than one person and the articles of association do not contain any provisions to that effect, declarations must be made by two members of the board of directors or by one member of the board of directors and a commercial agent on behalf of the company.
Supervisory Board
The supervisory board of a general partnership consists of at least three members , who are appointed and dismissed by resolution of the shareholders. As with the management board, however, the articles of association may provide for a different method for appointing or dismissing supervisory board members. The supervisory board exercises ongoing oversight of the company's business activities but has no right to issue binding instructions to the management board in this regard. The supervisory board's specific duties include assessing the accuracy and reliability of the management board's reports and proposals concerning profit distribution or the coverage of losses, and submitting an annual written report on the results of this assessment to the general meeting. It should be emphasized that the articles of association may expand the supervisory board's powers.
Annual General Meeting
The general meeting of a general partnership is convened by its shareholders. Shareholder resolutions can be passed at the general meeting or outside of it, either in writing or via electronic communication. It is important to note that shareholders can vote electronically at general meetings if this is stipulated in the articles of association or if all shareholders have given their documented consent to such voting. Furthermore, shareholders can vote in writing if all shareholders have given their documented consent to such voting.
Dissolution of a simple public limited company
The regulations in force provide for the dissolution of a simple public limited company in a simplified form, i.e., without the need to sell the company's assets or repay its liabilities to its creditors. A simplified form of dissolution of a simple public limited company is permissible if at least one of the shareholders, with the approval of the local court, assumes the company's assets and is responsible for its obligations.
Should you have any questions regarding the simple joint-stock company, you can contact us by email at kontakt@kancelaria-pozniak.pl or by phone at +48 665 246 969 .