A joint-stock company may be formed by one or more persons. A joint-stock company may not be formed exclusively by a single-shareholder limited liability company. A joint-stock company is formed once its statutes are drawn up by the promoters in the form of a notarial deed and all of the shares are subscribed for. Upon formation a joint-stock company in organization is created. A company in organization may acquire rights in its own name, including the right of ownership of real estate and other rights in rem, incur obligations, sue and be sued. Upon registration in the register of entrepreneurs held in the National Court Register a joint stock company in organisation becomes a joint stock company and acquires legal personality. The joint stock company becomes a party to the rights and obligations of the company in organization.
The company may issue registered promoter certificates as remuneration for the services provided upon creation of the company. The promoter certificates may be issued for a maximum period of ten years following registration of the company and give the right to participate in the division of profits of the company within the limits stipulated in the statutes, after the minimum amount of dividends stipulated in the statutes has been deducted for the benefit of the shareholders.
Capital requirements of joint stock company
The initial share capital of a joint stock company must be at least 100000 PLN. The share capital of a joint stock company is divided into shares of equal nominal value and the nominal value of a share may not be lower than 1 grosz.
The shares may not be subscribed for below their nominal value. An inalienable right or the provision of work or services may not constitute a contribution to the company. The shares subscribed for in-kind contributions must be paid in full within one year from the date of registration of the company, whereas the shares subscribed for cash must be paid prior to registration of the company to the extent of at least one fourth of their nominal value. The shares subscribed for in-kind contributions must be paid in full within one year from the date of registration of the company, whereas the shares subscribed for cash must be paid prior to registration of the company to the extent of at least one fourth of their nominal value.
Where there are in-kind contributions proposed the promoters draw up a report as to the value of the contributions and have it audited by an auditor appointed by the court. The audited report needs to be approved by the shareholders before they subscribe for the shares. A shareholder’s claim under a loan extended by the shareholder to the company is deemed to be the contribution of that shareholder to the company in the case where the company’s bankruptcy is announced within two years of the date of the loan agreement. The shareholder may not set off his receivables against the receivables of the company concerning his payment for the shares, unless such set-off is contractual.
The shareholders have the right of priority in taking up the new shares in proportion to the number of shares they hold (the pre-emptive right).
Shares
There may be registered shares or bearer shares. Registered shares may be changed to bearer shares or the opposite change may be made at the request of a shareholder, unless the law or the statutes provide otherwise.
The company may issue preference shares. Preference shares may be privileged in particular as to the right to vote, the right to dividends or participation in the division of assets in the case of liquidation of the company. The shareholder may exercise the special rights attached to his preference shares after the end of the financial year during which he made in full the contribution towards the share capital. A single preference share may carry no more than two votes. Preference shares in respect of dividends may entitle the shareholder to dividends which exceed by not more than half the dividends designated to be paid out to the shareholders entitled under non-preference shares. Shares which are preference shares in respect of dividends do not enjoy priority of satisfaction over the remaining shares. The voting right may be excluded with respect to shares which are preference shares in respect of dividends (non-voting shares).
Share certificates may be issued after the registration of the company. The bearer share certificates are issued only in respect of the fully paid shares. Before the full payment only registered share certificates or registered temporary certificates may be issued, on which each subsequent payment is recorded. Preference shares, with the exception of non-voting shares, shall be registered shares. The shares subscribed for in-kind contributions remain registered shares until the date of approval by the earliest ordinary general meeting of shareholders of the annual financial report and during such time may not be transferred or pledged – such shares during that time are retained by the company as security for claims for damages for non-performance or improper performance of the obligation to make in-kind contributions.
Transfer of shares
The shares are transferable. The statutes may provide that the consent of the company is necessary for the transfer of registered shares or limit the transferability of registered shares in another manner. If the company refuses consent for the transfer of the shares, the company must designate another transferee. The time during which such designation must be made, the price or the manner in which the price shall be determined, and the time for payment needs to be specified in the statutes. If there are no such provisions, a registered share may be freely transferred.
The transfer of a bearer share is effected by the transfer of possession of the share. The transfer of a registered share or a temporary certificate is effected by way of a written declaration either in the share certificate or in the temporary certificate, or in a separate document and the transfer of possession of the share or the temporary certificate.
In relations with the company, only a person who is registered in the share register or has possession of a bearer share is deemed to be a shareholder. Separate rules apply to the shares admitted to public trading.
Management and representation of joint stock company
The management board manages the affairs of and represents the company. The management board includes one or more members who may not serve for more than five years. Reappointment may be made not earlier than one year before the end of the current term of office. A member of the management board may be dismissed at any time.
As a rule, if the management board comprises several members, all the members are obligated and entitled to jointly manage the affairs of the company. In relation to the company, the members of the management board are subject to the limitations stipulated in the statutes, in the regulations of the management board and in resolutions of the supervisory board and of the general meeting of shareholders. The general meeting of shareholders and the supervisory board may not give the management board any binding instructions with respect to the management of the affairs of the company. The right of a member of the management board to represent the company may not be restricted with a legal effect as against third parties.
If the statutes do not include any provisions in this respect, representations in the name of the company may be made by two members of the management board acting jointly or by one member of the management board acting together with a holder of the commercial power of attorney.
Supervisory board of joint stock company
The joint-stock company must have a supervisory board. The supervisory board comprises of at least three members, and in the case of public companies of at least five members appointed and dismissed by the general meeting of shareholders. Upon an application of the shareholders, representing at least one fifth of the share capital, the election of the supervisory board must be made by the next general meeting of shareholders by way of a vote in separate groups. The term of office of a member of the supervisory board may not be longer than five years. A member of the supervisory board may be dismissed at any time.
The supervisory board exercises permanent supervision over all areas of the activities of the company. The special duties of the supervisory board include evaluation of the management board reports on the operations of the company and of the financial reports with regard to their conformity with the books and documents, as well as with the actual state of affairs, and of the proposals of the management board concerning the division of profits or the financing of losses, as well as submitting to the general meeting of shareholders annual written reports on the results of such evaluation. The statutes may expand the powers of the supervisory board.
General meeting of shareholders
The following matters require a resolution of the general meeting of shareholders: 1/ consideration and approval of the annual report of the management board on the operations of the company and of the annual financial report, 2/ the granting of approval of the performance by the members of the company governing bodies of their duties, 3/ adoption of a resolution on the distribution of profits or the financing of losses, 4/ decisions concerning claims for redress of damage caused upon formation of the company or in the course of management or supervision, 5/ transfer or tenancy of the enterprise or its organized part and the creation of a limited right in rem on them, 6/ acquisition and transfer of real estate, the right of perpetual usufruct, or a share in real estate, unless the statutes provide otherwise, 7/ issue of convertible bonds or bonds with the right of priority, and issue of subscription warrants, 8/ amendment of the statutes.
Share in profits of joint stock company
The shareholders are entitled to participate in the profits shown in the financial report, audited by an auditor, which have been designated by the general meeting of shareholders for distribution to the shareholders. The sums to be divided among the shareholders may not exceed the profits for the previous financial year, increased by the undivided profits from previous years and by the sums drawn from the supplementary and reserve capitals created out of profits which may be allocated for dividends. That amount needs to be reduced by uncovered losses, own shares and by the sums which according to the law or the statutes should be allocated, from the profits for the previous financial year, to the supplementary or reserve capitals. As a rule, profits should be divided in proportion to the number of shares. If the shares are not paid for in full, the profits should be divided in proportion to the effected payments for the shares.
The statutes may authorize the management board to pay the shareholders an advance on the dividends expected at the end of the financial year if the company has sufficient funds for such payment. The payment of the advance requires the consent of the supervisory board.
Liability for the obligations of joint stock company
A joint stock company is a legal person and the shareholders are not liable for the obligations of the company. The members of the management board are jointly and severally liable for the company’s tax obligations in the event when enforcement against the company has proved to be ineffective unless in appropriate time a petition for bankruptcy was filed.
Liquidation of joint stock company
The liquidation of a joint stock company is conducted in the event of its dissolution, unless the partners agree on another mode of bringing the operations of the partnership to an end. The reasons for dissolving the company are the following: 1/ the reasons stipulated in the statutes, 2/ a resolution of the general meeting of shareholders on dissolution of the company or a transfer of the seat of the company abroad, 3/ an announcement of bankruptcy of the company.
The liquidators draw up a balance sheet as at the date of the opening and as at the date of closing liquidation. The assets of the company are used first of all to pay the obligations of the company. The remaining assets are divided among the shareholders proportionately to the payments towards the share capital made by each of them. If preference shares enjoy a priority right in the division of the company assets, preference should be paid first, to the extent of the amounts paid for each of them; subsequently, ordinary shares shall be paid in the same manner; any surplus of the assets should be divided in accordance with regular rules among all of the shares. The statutes may provide for different rules for the division of the assets. If bankruptcy of the company is declared, the company is dissolved following the bankruptcy procedure.
