A limited joint – stock partnership is a partnership where at least one partner is liable for the obligations of the partnership without limitation (the general partner) and at least one partner is a shareholder. The statutes of a limited joint-stock partnership must be made in the form of a notary deed. The limited joint-stock partnership is created upon its registration in the register of entrepreneurs held in the National Court Register.
Capital requirements of limited joint-stock partnership
The initial share capital of the limited joint-stock partnership must be at least 50 000 PLN. The share capital of a joint-stock company divides into shares of equal nominal value. The nominal value of a share may not be lower than 1 grosz. There are no requirements as to the minimum level of contributions of general partners. A general partner may make a contribution to the share capital or to other funds, however making of the contribution to the share capital does not exclude his unlimited liability for the obligations of the partnership. The contributions may be made in cash or in kind. The provision of services or work for the partnership may represent an in-kind contribution of a general partner, unless a contribution is made to the share capital. The capital share of the general partner equals the value of the contribution effectively made. The general partner has neither the right nor the obligation to increase the agreed contribution. 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).
Management of limited joint-stock partnership
Management of the affairs of the limited joint-stock partnership may not be entrusted to third parties to the exclusion of the partners. Each general partner has the right and obligation to manage the affairs of the partnership, however, the statutes may provide that management of the affairs of the partnership is entrusted to one or several general partners. General partners do not have the right to manage the affairs of the partnership with regard to matters which are reserved for the competence of the general assembly or the supervisory board. The partners may not receive remuneration for managing the affairs of the partnership. As a rule, each general partner entrusted with the management may, without a prior resolution of the partners, manage the affairs within the ordinary business of the partnership. However, where prior to conclusion of such a matter at least one of the remaining general partners objects to the conclusion of the matter, a prior resolution of the partners is required. Where in matters which fall within the ordinary course of business of the partnership a resolution of the partners is required, the unanimity of all partners who have the right to manage the affairs of the partnership is required. In matters which fall outside of the ordinary course of business of the partnership, the consent of all general partners is required, including those who have been excluded from managing the affairs of the partnership.
Representation of limited joint-stock partnership
The limited joint-stock partnership is represented by general partners, who are not deprived of the right to represent the partnership under the statutes. A shareholder may represent the partnership only as an attorney in fact. A shareholder who effects an act in law in the name of the partnership without disclosing his power of attorney or outside of his powers is liable without limitation for the consequences of such act in law as against third parties.
Supervisory board
The supervisory board consists of at least three members who are appointed and dismissed by the general meeting. The supervisory board must be established where there are more than twenty-five 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 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. The supervisory board exercises permanent supervision over all areas of the activities of the company. The special duties of the supervisory board include evaluating of the general partners report on the operations of the company and of the financial report for the previous financial year with regard to their conformity with the books and documents, as well as with the actual state of affairs, and proposals of the management board concerning the division of profits or the financing of losses, as well as submitting to the general assembly annual written reports on the results of such evaluation. The statutes may expand the powers of the supervisory board.
General meeting
A general meeting may be ordinary or extraordinary. Both, the shareholders and general partners have a right to take part in the meeting. A resolution of the general meeting is required in particular for: 1/ consideration and approval of the report of the general partners on the activities of the partnership and the financial report of the partnership for the previous financial year, 2/ granting the general partners who manage the affairs of the partnership an approval of the performance of their duties, 3/ granting the members of the supervisory board an approval of the performance of their duties, 4/ election of the auditor, unless the statutes provide for the competence of the supervisory board in this matter, 5/ dissolution of the partnership. The following resolutions of the general meeting require the consent of all the general partners: 1/ entrusting one or several general partners with management of the affairs and representation of the partnership, 2/ division of the profits for the financial year in respect of the portion for the shareholders, 3/ transferring or letting in tenancy of the enterprise of the partnership or its organized part and establishing over it a right of usufruct, 4/ transferring the real estate of the partnership, 5/ increase and reduction of the share capital, 6/ issuance of bonds, 7/ merger and transformation of the partnership, 8/ amendments to the statutes, 9/ dissolution of the partnership. The consent of a majority of the general partners is required for the resolutions of the general meeting concerning: 1/ a division of the profits for the financial year in respect of the portion for the general partners, 2/ financing of losses for the previous financial year, 3/ other acts stipulated in the Statutes.
Transfer of the rights and obligations of a general partner in limited joint stock partnership
The rights and obligations of a general partner in a limited joint stock partnership may be transferred to another person only where the articles of association so provide. As a rule, all rights and obligations of a partner in a partnership may be transferred to another person only upon the written consent of all of the remaining general partners. In the case where all rights and obligations of a general partner are transferred to another person, the withdrawing partner and the acceding partner are jointly and severally liable for the obligations of the withdrawing partner arising in connection with his membership of the partnership and for the obligations of the partnership.
Transfer of shares
The shares are transferable. The statutes may provide that the consent of the company is necessary for the transfer or encumbrance of registered shares or limit the transferability of registered shares in another manner. The transferee and the transferor are jointly and severally liable to the company for the outstanding performances due to the company in respect of the share transferred.
Share in profits and participation in losses of limited joint stock partnership
As a rule, a general partner and a shareholder participate in the profits of the partnership in proportion to their contributions made to the partnership, unless the statutes provide otherwise. As a rule, general partners participate in the losses in shares in which they participate in the profits. The statutes may release a general partner from participation in losses. If, as a result of a loss sustained by the partnership, the capital share of the general partner has diminished, the profits need to be first of all used to supplement the share of the partner. A shareholder participates in the losses only up to the value of his subscription for shares. Each general partner has a right to personally inquire about the state of the assets and business of the partnership and personally review the books and documents of the partnership. Each shareholder has a right to receive not later than fifteen days before the ordinary general meeting of shareholders the copies of the general partners’ report on the operations of the company and of the financial report, together with a copy of the supervisory board report and the opinion of the auditor.
Liability for the obligations of limited joint-stock partnership
Each general partner is liable for the obligations of the joint-stock partnership without limitation with all his assets jointly and severally with the remaining general partners. However, his liability is subsidiary to the liability of the partnership, i.e. a creditor of the partnership may conduct execution from the general partner’s assets only where execution from the assets of the partnership has proved ineffective. The shareholders are not liable for the obligations of the partnership.
Liquidation of limited joint-stock partnership
The liquidation of a limited joint-stock partnership 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 limited partnership are the following:1/ the reasons set out the articles of association, 2/ a resolution of general meeting of shareholders to the effect, 3/ a declaration of bankruptcy of the partnership, 4/ the death, declaration of bankruptcy of the sole general partner or his termination of the partnership. Termination of the partnership by a general partner and his withdrawal from the partnership is allowed only if the statutes so provide. A declaration of bankruptcy of a shareholder is not a reason for dissolution of the partnership and a shareholder does not have the right to terminate the partnership. Unless statutes state otherwise, if the partnership has been formed for an undefined time, a partner may terminate the partnership six months before the end of the financial year. 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 partnership are used first of all to pay the obligations of the partnership. The remaining assets are divided among the general partners and shareholders in accordance with the provisions of the statutes. If the assets of the partnership are not sufficient for repayment of the shares and debts, the shortfall is divided among the general partners in accordance with the provisions of the statutes, and if there are no such provisions, in the same proportion as that in which the general partners participate in the loss. In the case of the insolvency of one of the general partners, the share of that partner in the shortfall is divided among the remaining partners in the same proportion. If bankruptcy of the partnership is declared, the partnership is dissolved following the bankruptcy procedure.
