On 1 July 2021, a new type of company, a simple joint-stock company, was introduced into the Polish legal system. Similarly to a regular joint-stock company, it is a capital company, but its registration and functioning require fewer formalities. Below we outline in more detail how of a simple joint-stock company operates.
A word of introduction about capital companies
As mentioned above, a simple joint-stock company is a capital company. This means that it has a legal personality, but also that it is characterised by a high capital volatility and a high shareholder turnover. For a simple joint-stock company, these are expected to be higher than in the case of a regular joint-stock company due to lower formal requirements applicable to issuing and selling shares to new shareholders. As any capital company, a simple joint-stock company is also liable for its operations.
General characteristics of a simple joint-stock company
The level of a simple joint-stock company’s share capital is not specified in its articles of association, which means that changes to the share capital do not require an amendment to the articles of association. The minimum share capital level has been set at a token amount of PLN 1. Furthermore, the shares of a joint-stock company do not constitute its share capital. Another difference is the fact that a contribution in kind may also be provided in the form of services or work for the benefit of the company, which is not possible in the case of a limited liability company or a regular joint-stock company.
Funders of a simple joint-stock company
A simple joint-stock company may be founded by a natural person (or several natural persons), as well as by legal persons and other commercial law companies and partnerships. However, a simple joint-stock company cannot be founded by a single-shareholder limited liability company.
Steps required for the formation of a simple joint-stock company
A simple joint-stock company can be formed upon:
- execution of its articles of association;
- appointment of its governing bodies;
- payment of a contribution by the shareholders in the minimum amount of PLN 1;
- registration of the company.
Articles of association
As a rule, unless we opt for the simplified formation procedure, the articles of association of a simple joint-stock company should be executed in the form of a notarial deed and should comprise the following elements:
- the company’s business name and registered office;
- specification of the company’s objects;
- information about the shares;
- specification of the contributions, including contributions in kind;
- specification of the company’s governing bodies;
- the duration of the company – if it is established for a fixed period.
Just as for any capital company, the name of a simple joint-stock company may be freely designated; however, it must include an additional element denoting its legal form, i.e. “prosta spółka akcyjna” (simple joint-stock company). It is also possible to use the abbreviation: “P.S.A.”.
Registration of a simple joint-stock company
A simple joint-stock company may be registered using either the traditional or the electronic procedure. However, if in-kind contributions are made, only the traditional procedure may be followed. Under the electronic (simplified) mode, documents are submitted via the Internet, and the articles of association are based on an on-line template.
The cost of incorporating a simple joint-stock company
The cost of establishing a simple joint-stock company depends on the chosen registration mode. The traditional mode is more costly, but it allows for more flexibility in adapting the company’s operating principles to the specifics of a given business activity. This mode requires payment of notarial costs, as well as registration fees: PLN 500 for filing an application with the National Court Register and PLN 100 for publishing an announcement in Monitor Sądowy i Gospodarczy (Court and Business Gazette). If one decides to set up a simple joint-stock company under the simplified procedure, the cost of filing an application with the National Court Register is reduced by half and equals PLN 250.
Summary
A simple joint-stock company has been introduced into the Polish legal system to offer entrepreneurs a more flexible form of conducting business activity. It was primarily developed with innovative companies in mind, where expertise and new ideas are often the foundation of success. However, all entrepreneurs operating on the Polish market may benefit from it, as it is also possible to transform previously established companies into a simple joint-stock company. Upon a decision to set up a simple joint-stock company, one must decide on its mode of incorporation. The traditional procedure, despite its higher costs as compared to the simplified procedure, allows for more flexibility in drafting the articles of association. The model articles of association of a simple joint-stock company provided for under the simplified procedure allow for a modification of only some of its provisions. If you are considering setting up a simple joint-stock company or transforming your existing business into this type of entity, do not hesitate to contact Radkiewicz Lawyers Poland where you will receive advice from legal professionals with broad expertise in setting up companies and partnerships under commercial law.
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