10 legal changes important for entrepreneurs in 2020
The year 2020 has brought significant changes in economic and company law. Some of the changes impose new obligations on companies, but there will also be solutions aimed at facilitating business operations.
Legal changes 2020 - check out which ones to prepare for?
New regulations, which have already entered into force or will become effective soon, will influence both the existing companies and the registration process of new business entities.
The most important changes include, among others, the new organisational form of the company, the act preventing payment backlogs, the obligation to dematerialise shares and to operate websites, the digitalisation of the National Court Register (KRS), as well as the new solutions for bankruptcy and restructuring proceedings and the act introducing the obligation to report in an electronic way the real beneficiaries.
10 most important changes in the law 2020
1. Obligation to operate website and disclose it in the KRS (1 January 2020)
On 1 January 2020, the provisions concerning the obligation for joint stock companies and limited joint-stock partnerships to operate their own website entered into force. The new regulations have also introduced an obligation to disclose websites in the National Court Register and to publish on them, in places designated for communication with shareholders, important announcements required by law or the companies' statutes.
2. New regulations to reduce payment backlogs (1 January 2020)
From the new year on, the regulations against payment backlogs have come into force. They are aimed at improving the financial liquidity of businesses. The Act on counteracting excessive delays in commercial transactions includes, among others, higher interest for delay in commercial transactions and the reduction of maximum payment periods.
From the point of view of most entrepreneurs, it is also important to increase the lump sum recovery costs. On the other hand, the legislator imposed an obligation on large companies to report on payment deadlines. The new regulations also provide for very high fines for companies which are the most delayed in paying debts to their contractors.
3. Friendly Law Package has partly entered into law (1 January 2020)
Since 1 January, a significant part of the PPP (Friendly Law Package) has come into force. It includes, among others:
- the right to make a mistake during the first year of operation or again after at least 36 months from the date of the last suspension or termination of operation for entrepreneurs registered in CEIDG,
- consumer protection, i.e. the right of complaint, for entrepreneurs registered in CEIDG,
- extension of the deadline for the VAT settlements in import to the 25th day of the following month, together with the VAT-7 return,
- a number of facilitations for craftsmen, including the extension of the definition of a craftsman to general partnerships, limited partnerships, limited joint-stock partnerships or sole proprietorships, provided that the partners in such a partnership have professional qualifications in the craft or are family members running a family craft business,
- facilitation of business succession, including the implementation of the rule of taking over of concessions, permissions and licenses in the case of a change of the enterprise owner by a person registered in the CEIDG and the possibility of appointing a temporary representative after the death of the entrepreneur's spouse (provided that the enterprise belongs to the entrepreneur and the spouse).
4. BDO Waste Database (1 January 2020)
On 1 January, the Waste Database has been introduced. All entities providing waste management services and companies trading in packaged products must be registered in it.
Furthermore, the BDO Act obliges entrepreneurs to include the BDO registration number on all documents drawn up in connection with their business operations, including VAT invoices and sales contracts.
5. Simple Joint Stock Company (Prosta Spółka Akcyjna, PSA) - (1 March 2020 - probable change of the date of entry into force to 2021)
At the beginning of March, the Commercial Companies Code was to be enriched with a new form of conducting business activity - Simple Joint Stock Company. As announced by the Ministry of Development, the date of entry into force of the PSA regulations is likely to be postponed by 12 months. The Simple Joint Stock Company will combine the most important features of a limited liability company with the possibility of raising capital by issuing securities. The company is dedicated to start-ups and people who want to commence business activity. The main advantages of PSA include:
- minimum share capital of 1 PLN,
- possibility to register a company online,
- the considerable digitisation of most procedures in a company,
- possibility to submit the entire share capital within 3 years from the date of registration,
- extension of the definition of contributions to share capital to asset value,
- possibility of transforming a sole proprietorship into PSA.
6. Full digitisation of the KRS (1 March 2020)
From March 2020, the National Court Register will be fully electronic, which means that applications can only be submitted via the IT system, and documents in paper form will need to be scanned and verified by a notary public or sent in the original form not later than within 3 days from the date of application submission.
Digitization of the National Court Register also involves making the documents such as statutes and articles of association and the documents concerning the dismissal and appointment of new members of company boards available via the Internet.
7. Changes in the pre-pack (24 March 2020)
Pre-pack, i.e. the procedure for the so-called prepared liquidation, will be made much more flexible by means of the amendment to the regulations coming into force on March 24, 2020.
The changes will include, inter alia, the introduction of an auction to select the most advantageous bid to enable the quick sale of the assets of an insolvent debtor in the event of submission at least two applications for approval of the terms and conditions of sale of the debtor's businesses.
Furthermore, the entity applying to the court requesting the approval of the pre-pack will have to attach to the application the proof of paying a deposit in the amount of 1/10 of the offered price. The court will have to appoint a court supervisor or a receivership who will review the application and check the information regarding the assets of the company in bankruptcy.
8. Deadline for reporting to the Central Register of Real Beneficiaries (13 April 2020)
The Central Register of Real Beneficiaries (CRBR) became effective on 13 October 2019, but the deadline for reporting real beneficiaries amounts to 6 months from the entry into force of the regulations for existing entities, i.e. 13 April 2020.
It is mandatory to report to the CRBR the following data:
- company identification data (company name, organisational form, registered office, KRS number, NIP number),
- identification data of a real beneficiary and a member of the company's board or shareholder entitled to represent the company (name and surname, country of residence, citizenship, PESEL number - in case of persons without PESEL number, information about the volume and nature of the share or rights enjoyed by the real beneficiary).
Failure to report data to CRBR by a company will result in a fine of up to PLN 1 000 000. If false data are provided to the Central Register of Real Beneficiaries, the person making the report may be liable to prosecution for making false statements.
9. Share dematerialisation - first call and conclusion of the agreement (30 June 2020)
As part of dematerialisation, i.e. digitisation of shares in joint stock companies and limited joint-stock partnerships, these companies will be obliged until 30 June 2020 to:
- conclude agreements to operate a register of shareholders with an entity authorised to manage securities accounts or conclude agreements to register shares in a securities depository,
- make the first call for shareholders to submit share documents in paper form (with a deadline of no more than one month or less than two weeks from the date of each call for the next four calls).
10. New rules on posting workers in the EU (30 July 2020)
At the end of July, new EU regulations will come into force, which will affect not only the legal regulations of the Member States but also employees and entrepreneurs.
The amendment of Directive 96/71/EC will reduce the period of posting to 12 months (in some exceptions to 18 months). Moreover, the new regulations provide for wages and rates of allowances or reimbursement of expenses for travel, board and lodging of posted workers should be equal to the wages and rates set out in the national laws and regulations of the Member State to which the worker is posted.
From 30 July 2020, Member States will, however, be obliged to make public information on the terms and conditions of employment and to ensure cooperation between the competent public authorities or bodies in monitoring employment conditions.
See also: Reducing payment backlogs - new regulations