Lessons from the Pandemic

A simple joint stock company as a remedy for doing business during a pandemic

By Michał Kulczycki, aplikant adwokacki, Accreo

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The pandemic is ongoing, at the time of writing, analysts are warning of an impending fourth wave of illness. We are all wondering what long-term consequences will be associated with the virus and the announced lockdowns.

However, we are already noticing its impact on our professional behaviour. Today, no one is surprised any more by a barking dog or a crying baby in the background of an online meeting. We have all adapted to the prevailing conditions, and it has turned out that the pandemic has accelerated the process of conducting business remotely.

In order to carry out business activities efficiently, it is necessary to have tools that improve operations and do not constitute an organisational obstacle in the day-to-day functioning of business. We wrote an entire article on the subject of forms of conducting business in Poland, which you can read here. In this article I would like to present a completely new legal form of conducting business in Poland – this is the simple joint-stock company (prosta spółka akcyjna, or PSA), introduced into the Polish legal system on 1 July. It happens that, by coincidence, this is by far the best form to conduct business in our modern world.

The assumption guiding the authors of the new regulation as the worked on the new legal form was by no means to adjust its form to a potential pandemic. The authors intended to a create modern vehicle dedicated to start-ups, ensuring a minimum of formalities and easy exit from the investment.

In the structure of possible forms of conducting business in Poland, the PSA is placed between a limited liability company (spółka z ograniczoną odpowiedzialnością, or Sp z o.o.) and a joint-stock company (spółka akcyjna, or SA). A PSA combines the advantages of those two legal entities such as the lack of personal liability of shareholders for the company's obligations and legal personality. The obligatory share capital has been reduced to the minimum (PLN 1!).

What distinguishes a PSA from an Sp. z o.o, or an SA is the possibility to contribute work or services to the company. This is a great advantage for cooperation between an investor financing a venture and a party that has an idea without capital.

The PSA structure has also introduced a number of improvements related to its possible remote operation. The company can be set up online on the website of the Ministry of Justice. The most important decision-making body in the PSA, which consists of the shareholders, i.e. the General Meeting of Shareholders, can adopt its resolutions electronically. Moreover, shareholders can participate in the Shareholders' Meeting fully remotely. Transfer of shares in the company does not require any special form – it may even take place via e-mail.

All the facilitations described above significantly simplify doing business during a pandemic, but they are also of key importance from the perspective of the company's operations with foreigners.

In my opinion, in the majority of cases PSA is a recommended form of conducting business in Poland for foreigners. The simplicity of operations and numerous facilitations introduced by the legislator seem to be encouraging. In this article, we have only described few of them. Accreo advisers will be pleased to discuss the details of this legal form and to analyse whether it is the right one from the perspective of business expectations.

Business in the form of a PSA is permitted for both EU citizens and non-EU nationals. This follows directly from Article 4(3) of the Act of 6 March 2018 on the principles of foreign businesses and individuals participating in economic activities in Poland. In terms of the internal operations of the company and the performance of the rights arising from the shares held, there are no differences between shareholders.

Some restrictions may result from legal regulations related to the participation of foreigners in the company, nevertheless, these restrictions are the same for all permissible forms of conducting business by foreigners.

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