From 1 March 2021 the amendment of the Code of Commercial Companies entered into force, which refers to and replaces paper-based shares and introduces an e-registration of shares for non-public companies.
According to the amendment of the provisions, bearer shares and registered shares of public limited companies, which are not subject to compulsory dematerialisation within the meaning of the Public Offering Act and the Financial Instruments Trading Act, are to take the form of a digital recording rather than a paper document.
Effects on shareholders
More importantly, than 1 March 2021 in respect of non-public companies, only those entities that are entered in the e-registration shall be considered to be a shareholder. Consequently, a shareholder who does not submit a paper stock document to the company, until it is deposited and entered in the register of shareholders, will not be able to exercise its rights (participation in general meetings and participation in dividends). \
The entry in the register can be fought
However, the mere failure to register shareholders does not immediately mean the loss of rights from shares and shareholder status. The registration entry may also be based on other documents. Where the shareholder has lost the shares' documents, he will be forced to demonstrate his rights through other available means of evidence.
Another solution is to sue Article 189 Code of Civil Procedure for the determination of shareholder status. In such a case, the decision of the court which states that the status of shareholder may be a document meeting the criteria of Article 3284(4) Code of Commercial Companies.
E-registration — persons entitled to make an application
At this point it is worth noting that companies should conclude a registry agreement before first request shareholders to deposit the documents of shares in the company, at the latest by 30 September d.b. However, according to Article 3285(1) the register of shareholders shall be public to the company and to each shareholder.
Such an alert shall be made at the request of a company or a person of legal interest. The registrant shall make all entries without delay but no later than one week after receipt of the request.
Disposal only after entry in the e-Register
Furthermore, the Act introduces the concept of a registration certificate, indicating that, at the request of a shareholder, a lien or a user entitled to exercise voting rights from shares, the entity keeping the register of shareholders issues a registered registration certificate.
The registration certificate shall confirm the rights deriving from shares which cannot be exercised solely on the basis of records in the shareholders' register.
The acquisition of shares or the establishment of a limited right in rem will take place when the relevant entry is entered in the register, and this does not apply to the situations indicated in the Act concerning the inclusion of shares.
Therefore, the divestment of shares will be effective from the moment of entry in the shareholders' register.
Author: Bartosz Nawrot
Legal consultant with the law firm Russell Bedford Poland 2018.