13.09.2019 Company law

Simple Joint Stock Company


On 1 March 2020 a new type of a company will enter the Polish legal system – Simple Joint Stock Company (Prosta Spółka Akcyjna PSA). It has to respond to the needs of new business ventures such as start-ups.

Greater flexibility

Simple Joint Stock Company will add significant flexibility to currently used rules applicable to a limited liability company as well as a joint-stock company. It will combine into one legal form specific elements inherent to these two types of companies. Its position in Commercial Companies Code – a new IA Section placed between a limited liability company and a joint-stock company – proves it. In many cases the provisions on Simple Joint Stock Company refer also to the relevant provisions on a limited liability company or a joint-stock company.

Simple Joint Stock Company combines the corporate character of a legal entity, including its fundamental feature i.e. exclusion of personal liability of the partners for the company`s liabilities, and the considerable freedom in defining the company`s relationship. It includes both the mutual relations between partners, and the company`s management system as well as the supervision over this process.

New capital contributions, lower capital

Simple Joint Stock Company is characterized by the introduction of new types of capital contributions covering the shareholders` rights. On the other hand, here we have modern system of creditors` protection. It is far from the idea of a share capital in favour of flexible reduction in distributing the dividends to the shareholders, including both the aggregated indebtedness of the company and the degree of its solvency.

Simple Joint Stock Company introduces innovative solutions under Polish corporate law, including a minimum share capital of PLN 1.  Such companies are known in foreign law because companies with no minimum share capital or with “symbolic” capital have been already introduced by a number of European countries. It is possible to distinguish, among others, the French simplified joint stock company (Société par Actions Simplifiée – SAS) or the Slovak simple joint stock company (Jednoduchá Spoločnosť na Akcie).

The procedure for establishing Simple Joint Stock Company is based on the regulations concerning the ones applicable for a limited liability company. A PSA may be established by one or more persons for any purpose permitted by law, except for establishment by a sole proprietorship limited liability company. PSA distinguishes itself from other companies through the fact that any in-kind contribution for covering shares may be any contribution having asset value, in particular performing labour or services.

No Articles of Association

PSA does not have separate company`s Articles of Association in the sense of the source of company`s internal law and the acts of company`s incorporation, does not also have separate consent to the Articles of Association content and the agreement on incorporation of a joint-stock company. Formation of a PSA requires concluding the Articles of Association including only obligatory and organisational provisions.

Simple Joint Stock Company – Articles of Association:

  • concluded in a form of a notarial deed (in the same manner as in concluding Articles of Association of a limited liability company and of a joint stock company)

or

  • online using the universal Articles of Association model (in the same manner as in concluding the Articles of Association of a limited liability company).

Share capital

Simple Joint Stock Company capital structure is based upon:

  • shares without nominal or par value
  • share capital which is a new type of capital and is different from the traditional share capital of a limited liability company and a joint stock company as well.

Share capital may consist of contributions in cash or in kind. However, the amount of share capital will not be specified in the PSA Articles of Association, and any changes in share capital will not be regulated by the provisions on Articles of Association amendments. PSA provides for discharging, before the date of application submitted to the register, the shareholders from the obligation to make the whole contribution to cover the acquired shares. The deadline to make the whole contribution may be specified in the provisions of the Articles of Association, the resolution of the General Meeting of Shareholders or the resolution of the Management Board. The whole contribution may be made within three years following the company`s entry into the National Court Register KRS.

PSA shares do not constitute part of the share capital and are indivisible. They shall be traded in a documentary form, i.e. in accordance with the provisions of the Civil Code, in the form of any document, in a way that enables to identify the person making the declaration, and any data carrier allowing to read its consent is a document (signature is not required but it is necessary to identify the person making the declaration of will by the addressee in any other way).

Other novelties

In the case of a Simple Joint Stock Company, the register of shareholders must be kept obligatory by any entity authorised to keep securities accounts or a notary public running a notary`s office in the territory of the Republic of Poland. A Board of Directors, which may include executive and non-executive directors, may be established instead of a Management Board.

Learn more: Limited liability companies – online shareholders meetings

Author:

Artur Rogozik
Partner, Legal Adviser
TGC Corporate Lawyers

How can we help you?

For clients interested in running a business in the form of a Simple Joint Stock Company, we offer comprehensive assistance in setting up such a legal entity. If you have any questions concerning PSA regulations, please do not hesitate to contact us.

 


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