On 15th January, partly as a response to various calls from business circles for simplification of legal complexities that govern some aspects of running a Polish commercial company, a much awaited revision of the Commercial Companies Code has entered into force.
The 2014 Act on amending the Commercial Companies Code and other related laws introduces a series of new legal instruments which could be used by business owners, should they choose to run their affairs in a form of a commercial company.
These new tools were introduced with a purpose of simplifying some of the procedures related with establishing and registration of a commercial company in Poland, as well as other corporate activities that are usually undertaken during the course of its running.
In particular these enhancements include:
- the ability to establish and register a legal partnership or a limited partnership via Internet, through a secure network operated by the Ministry of Justice. This has been previously made possible only for the limited liability companies. The lawmakers however decided that this scope should be widened to include some of the types of partnerships;
- allowing the shareholders of limited liability company, or partners of a partnership, to adopt some of the typical corporate resolutions through virtual shareholders’ meetings, without the necessity of formal convocation;
- simplifying the procedures related to transfer of shares in such virtually established companies (for the sake of clarity, we shall refer to them in this article as “virtually established companies”, or VEC’s for short);
- lowering of the registration fees for these virtually established companies.
Following the suit of limited liability companies, which already can be established and registered via Internet (a concept successfully introduced back in 2012), legal partnerships and limited partnerships can be now established, registered and dissolved in the same way, without having to leave one’s home. Their articles can be also modified without the need to visit the notary. Moreover, all of the above actions may now be performed on the basis of specimen documents prepared by the Ministry. A prospective company owner is therefore presented with complete business package, a so-to-speak DIY set for establishing a company.
The new amendments also provide that some of the corporate resolutions in VEC’s may be adopted virtually, without the need for any formal convocation of shareholders. Additionally, some of those resolutions will be published on a ready-to-use forms. These include in particular change of company’s address, approval of its financial reports, or increasing its share capital.
The revised act was aimed at making running of a commercial company more accessible to the greater public. Up until now, one could only initiate some procedures in writing or in other prescribed form. Few actions that could be undertaken through internet were accessible only on the condition of upon being granted a certified electronic signature, obtaining which was usually a hassle.
The amendments provide for another type of electronic signature called e-PUAP which, in principle, should be much easier to apply for and maintain, thus making it easier to manage the company via the internet.
The new act will allow shareholders to transfer their shares more easily. Up until now, all shares in limited liability company were transferred by a written deed with signatures of the seller and the buyer certified by a notary. As from the entry into force of the revised act, shares in the VEC’s can be transferred via the Ministry’s of Justice secure network, without the need for any written deed.
It should be noted however that the new, simpler procedures, will not apply to the companies and partnerships that already exist. These will be have to dealt with in a traditional manner, i..e. with assistance of the notary (at least with regards to limited liability companies and limited partnerships). The same applies to VEC’s, whose articles were amended in any other way than through the internet (i.e. whenever the articles were amended in the traditional way – in writing or by a notarial deed).
A significant change in relation to the VEC’s (as compared to the companies set up in a traditional way) shall be the decreased registration court fees. These will go down from 500 to 250 PLN for first entry in the entrepreneurs’ register and from 250 to 200 PLN for all subsequent entries. We do underline however, that these lower rates pertain only to the VEC’s.
One of other changes introduced by the revised Act will mean that the company will no longer be obliged to submit specimen signatures of its representatives to the registry court. This move was justified by stating that such specimen signatures have proven to be redundant and obsolete, since in practice no-one actually verifies those for any commercial purposes.
Such change, however, may bode some potential problems for creditors of limited liability companies. This is because specimen signatures of the members of the company’s management board usually contain a reference to each member’s home address.
This in turn allowed the creditors to quickly verify a given member’s address of residence, enabling them to pursue that member for any claims that they might have had against the company (in Poland, members of a management board of a limited liability company are not immune from claims addressed against that company, if it turns out that the company does not have any assets).
Removing the obligation to provide such specimen signatures will cause pursuing of creditor’s claims to be unnecessarily lengthened by the time required to established a member’s address (be it on the basis of data archived in various governing bodies or otherwise).
The purpose of the amended act was to simplify the corporate procedures related to conducting a commercial company and ridding of barriers administrative and financial. Indeed, these new provisions will allow entrepreneurs to run their companies virtually, where most of the corporate duties can be performed via Internet and shareholders or partners will be allowed to use specimen resolutions already prepared by professionals.
Of course on the other hand, some will choose to stay with the traditional way of handling their companies. This applies in particular to the more structurally complex businesses and holdings, that may wish to introduce in their articles and other corporate documents various instruments and procedures unavailable in the specimen documentation provided by the Ministry.
The new provisions have entered into force in major part on 15th January 2015. However few regulations, i.a. those introducing the specimen documentation published by the Ministry of Justice, as well as provisions on electronic signatures, shall enter into force in April 2016.
