Simple stock company – not only for start-ups

There will be a new type of capital company – a simple joint stock company. In practice, it is intended to be an alternative to a limited liability company and a public limited liability company. It will be of a non-public nature and its shares will not be marketed.

one of the characteristics of the new commercial company, it will be possible to contribute to the shares in the form of labour and services, without shareholders being responsible for its obligations.

Share capital will be abolished in favour of share capital, and the protection of creditors is to serve, among other things, the provisions on the prohibition of distribution to shareholders that would jeopardise the company's solvency and the obligation to write off profits to cover future losses.

Introduction

Regulations relating to the creation of a simple public limited liability company (hereinafter PSA) include a government draft law amending the Act - Commercial Companies Code and some other laws[1] .

Its justification points out that the construction of a new company, combining elements of a company with a capital company, will be particularly useful for innovative entrepreneurs, especially in the form of start-ups, using modern technologies, but not only for them.

The provision of contributions in the form of work and services and contributions which are difficult to price on the market is therefore intended to make concrete use of the knowledge and experience of specialists, for example IT professionals.

According to the project promoter, a limited liability company is not the best solution for young innovative companies, while running public limited liability companies is quite expensive and complicated.[2] .

For these reasons, among others, the bill decided to amend the Act from 15 September 2000 – Commercial Companies Code[3] , and add the IA section on PSA[4] .

Commercial companies will therefore, after the entry into force of the Act, be: public company, partner company, limited partnership, limited partnership, limited liability company, PSA and joint stock company, and limited liability company.

Establishment of a simple public limited liability company

Under the proposed rules, PSA can be created by one or more persons for any legitimate purpose, unless otherwise provided for in the Act, but not bound solely by a single-member limited liability company[5] .

The shares will be covered in exchange for cash or non-monetary contributions – the project clarifies that this second the type of contribution may be any contribution of material value, in particular the provision of work or services[6] .

The PSA will create – expressed in PLN – share capital for which cash and non-monetary contributions will be allocated, including Article 14(1) k.s.h.7 , at least 1 PLN, and its amount will not be specified in the articles of association.

The project promoter identifies several countries in Europe where capital companies can be established without minimum share capital or with symbolic capital.

For example, from 2009 such minimum share capital is 1 EUR for the French simplified joint stock company (Société par Actions Simplifiée) and 1 EUR in the Slovak straight public limited-liability company (Soločnosňa on the Act), the laws which introduced it began to apply from 1 January 2017 In the case of a limited liability company, such minimum share capital shall also be 1 EUR in the Netherlands (Besloten Vennootschap – B.V.) and in Germany, in the case of embroideryungsbeschränkte Unternehmergesellschaft as a sub-type of limited liability company.

In the Czech Republic (solečnost zručením omezením) it is 1 CZK[8] .

Indivisible shares of PSA will not have a nominal value nor were they part of the share capital[9] ; will be transferable, but the articles of association may also make the regulation subject to or otherwise restrict the consent of the company, and if the company refuses to accept the transfer of shares, it should in this case indicate another buyer[10].

The articles of association may contain a record that the shares will be decommitted without the adoption of a shareholder resolution in the event of a specific event being fulfilled.[11].

The formation of PSA is subject to the conclusion of a company contract in the form of a notarial act; the establishment of its bodies; the payment of share capital at least 1 PLN; entry in the register[12].

The PSA agreement should include, inter alia, information on the subject-matter of the company's activities, the number, series and number of shares and related advantages, shareholders covering individual shares, the issue price of the shares; if shareholders contribute in kind – on the subject-matter of these contributions, the shares covered for non-monetary contributions and the shareholders who cover those shares; if the non-monetary contribution is to provide work or services – of the type and time of the provision, as well as on the bodies established in the company; the number of members of the board and supervisory board (if established)[13].

PSA shares shall not be admitted or marketed within the meaning of the rules on trading in financial instruments, the disposal or imposition of which should be effected in documentary form under the terms of invalidity[14].

Responsibility of the PSA Board

The PSA establishes a board (consisting of one or more members) or the board of directors or, if specified in the contract, the supervisory board (counting at least third members, appointed and revoked by resolution of shareholders). A board of directors may also be appointed, consisting of one Or more directors. The Board shall represent the company and conduct its affairs, and the Director may at any time be revoked by a resolution of the shareholders.

Members of the Management Board shall bear civil liability for their PSA activities.

If they intentionally or negligently provide false data in statements that the contributions to cover the shares have been made in the part provided for in the company's contract and that the contributions to cover the new shares have been made in the part provided for in the resolution on the issue of new shares or the acquisition of shares, they shall correspond jointly and severally with the creditors of the company by three years from the date of registration of the company or registration of issue of new shares[15].

The draft also includes provisions according to which a member of the body is liable to the company for damage caused by failure to perform his duties, including failure to exercise due diligence or failure to maintain his loyalty to the company, unless he is not guilty, and that whoever, while participating in the creation of the company, has, contrary to the law, caused damage to the company for his own fault, is liable to remedy it.

And if several people have done harm together, they will be jointly responsible for it[16].

If, on the other hand, the company fails to bring an action for compensation of damage caused to it by a member of the body or shareholder within one year of the date of disclosure of the injurious act, any shareholder will be able to bring an action for compensation of damage caused to the company[17].

A member of the board of directors will be able to absolve himself of the aforementioned liability if he demonstrates that a bankruptcy application has been filed in due time or at the same time a decision has been issued to open the restructuring procedure or to approve the arrangement in the approval procedure, or that the failure to notify the bankruptcy application was not due to his fault, or despite the failure of the bankruptcy application and the failure of the decision to open the restructuring procedure or the non-approval of the arrangement in the approval procedure, the creditor has not suffered any damage.[18]. The PSA project also contains a reservation that a member of the board of directors or director may not, without the company's consent, engage in competitive interests or participate in a competitive company as a partner of a civil partnership, a partnership or as a member of a body of a capital company or participate in another competitive legal person as a member of an organ, unless otherwise provided in the articles of association[19].

Obligations and rights of shareholders

According to the project, PSA shareholders are obliged only to benefit under the company's contract and are not responsible for its liabilities[20]. The proposed provisions specify the time horizon for contributions.

They should be transferred to the company in full within three years from the date of entry of the company in the register and be credited equally to cover all shareholder shares, unless otherwise provided in the articles of association[21].

The new regulation states that if the value of the non-monetary contribution to cover the share capital was significantly inflated against its fair value at the date of the acquisition of the shares, the shareholder would be required to compensate the company for that loss, with the members of the board jointly and severally in line with that shareholder, unless they are not guilty[22].

The shareholder will have the right to participate in the profit and to withdraw from the share capital, but it is worth remembering that at least the share capital will need to be provided to cover losses 8% profit for a given financial year if that capital has not reached 5% total liabilities of the company resulting from the approved accounts for the last financial year[23].

The amount to be broken down between shareholders (dividend) will not exceed the sum of the profit for the last financial year, the undivided profits from previous years, created from the profit of the reserves which may be allocated to the division, and the share capital.

This sum will be reduced by uncovered losses, own shares and amounts which, under the laws or articles of association, should be transferred from profit for the last financial year to reserves which cannot be allocated to the division[24]. The bill is to enter into force 1 March 2020

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1 The article discusses the project with 1 February 2019, Government accepted this project 5 February 2019, And into the Sejm 13 February 2019

2 Reasons for the above-mentioned project 1 February 2019; https://legislacja.rcl.gov.pl/projekt/12311555/ Folder ♪ Oh, oh, oh, oh ♪12508021#12508021.

3 i.e. Journal of Laws of 2017, item 1577 (Further: k.s.h.).

4 Article 9(9) Project.

5 Article 3001(1-2) Department IA k.s.h.

6 Article 3002(1-2) Department IA k.s.h.

7 Following the entry into force of the amendment, section 1 under Article 14 k.s.h. will provide that a non-monetary contribution to a limited liability company, a public limited liability company or a public limited liability company intended for the share capital of PSA may not be subject to non-negotiable law or the provision of work or services.

8 Reasons for the project 1 February 2019, op. cit.

9 Article 3002(3) and Article 3003 . section 1-2 Department IA k.s.h.

10 Article 30038(1-2) Department IA k.s.h.

11 Article 30045 Department IA k.s.h.

12 Article 3004 Department IA k.s.h.

13 Article 3005 Department IA k.s.h.

14 Article 30035(2)(4) Department IA k.s.h.

15 Article 300122 Department IA k.s.h.

16 Article 300122, Article 300123, Article 300124(1) and Article 300125 Department IA k.s.h.

17 Article 300126(1) Department IA k.s.h.

18 Article 300131(2) Department IA k.s.h.

19 Article 30054(3) Department IA k.s.h.

20 Article 3001(1-2) Department IA k.s.h.

21 Article 3009 . section 1 and 3 Department IA k.s.h.

22 Article 30010(1) Department IA k.s.h.

23 Article 30019 Department IA k.s.h.

24 Article 30015(2) Department IA k.s.h.