Sprawy korporacyjne

FAQ

55
Recruitment and Employment
Can an employee start work without a prior execution of an employment contract?

Generally, yes. But in the case when an employment contract is not executed in writing, the employer has a duty to deliver to the employee, at the latest on the day the work starts, a written confirmation of the arrangements regarding the contractual parties, contract type and its terms.

56
Appointment, Suspension and Removal of Directors
When does a director’s mandate begin?

A director’s mandate begins on the date a resolution appointing him or her is adopted, unless stated otherwise in the resolution. The ‘mandate’ means an individual’s right to serve as a director. The mandate may be for a period that is longer or shorter than his/her term (the period of a director’s tenure specified in the company’s articles of association).

56
Appointment, Suspension and Removal of Directors
How should a director be appointed?

To appoint a board director, the following must be done:

  • The written consent of the candidate and information on his/her address for service of notices must be obtained;
  • A written statement by the candidate certifying that he/she meets the statutory requirements to hold the function of a board director must be obtained (in the case of foreigners, the registry court may request the company to submit a clean criminal record certificate);
  • A shareholders’ resolution must be adopted (unless the board of directors is appointed by another governing body or an entity authorized by the articles of association to do so); and
  • The new director must be notified about the appointment (i.e. receive a copy of the appointing document).
56
Appointment, Suspension and Removal of Directors
Can a director be appointed for an indefinite term?

Yes, if the articles of association expressly state that the board of directors is appointed for an indefinite term. Otherwise, a resolution appointing a director will be interpreted as an appointment for a one-year long term.

56
Appointment, Suspension and Removal of Directors
Can a director appoint an alternate director?

No. A director holds his/her function personally and may not appoint an alternate director or grant anyone a power of attorney to act on his/her behalf. (However, it is possible for a director to participate in adopting resolutions by casting a vote in writing through another director, if permitted to do so by the articles of association).

56
Appointment, Suspension and Removal of Directors
Does a director’s appointment have to be registered in the commercial register?

No. A director’s appointment alone (a resolution adopted by the relevant governing body or a statement made by the entity authorized to do so by the articles of association) is sufficient. Naturally, the appointed director and the company must be notified about the appointment. A director holds his/her function irrespective of whether his/her appointment is registered in the commercial register.

56
Appointment, Suspension and Removal of Directors
May a director be suspended?

Yes. He/she may be suspended by a resolution of the supervisory board, but this right must be specified in the articles of association. The articles of association may expressly limit grounds for suspension to valid reasons only.

56
Appointment, Suspension and Removal of Directors
When does a director lose the right to act on the company’s behalf?

A director loses the right to act on the company’s behalf on the expiry of his/her mandate. A director’s mandate may expire, for instance:

  • On the day of the shareholders' meeting approving the financial statements for the first full financial year in which the director held his/her function, if he/she is appointed for a one-year term;
  • On the day of the shareholders' meeting approving the financial statements for the last full financial year of the director holding his/her function if he/she is appointed for a term longer than one year;
  • Upon a director’s death;
  • Upon a director’s resignation (on the date the resignation is filed or on any other date specified in the resignation document);
  • As a result of removal from the board of directors (on the date a resolution to remove the director is adopted by the relevant governing body or a statement to this effect is made by the entity authorized to do so by the articles of association); or
  • On the day his/her conviction for certain offences set out in the Criminal Code and the Commercial Companies Code becomes final and non-appealable.
56
Appointment, Suspension and Removal of Directors
When does a mandate of a director appointed under joint board tenure expire?

If the articles of association specify that the term of board directors is joint, the directors are appointed for a period that ends at the same time for all directors. If a director’s mandate expires before the end of the joint term, the mandate of his/her successor will expire simultaneously with the mandates of those directors who were appointed at the beginning of the joint term.

56
Appointment, Suspension and Removal of Directors
Where is a resignation from the board of directors filed?

A letter of resignation must be filed with the company and addressed to the governing body that appointed the director, i.e. to the supervisory board or the shareholders’ meeting. If the articles of association indicate another entity authorized to appoint directors, the resignation must be filed with the company and that entity.

In practice:

Legal doctrine does not present a uniform stance on this issue. There is a view, for example, that a resignation from the board of directors must be filed to the board of directors only, and the board must communicate the information about the resignation to the governing body that appointed the director.

56
Appointment, Suspension and Removal of Directors
Can a director resign from the board orally?

Yes. Legal regulations do not require directors to file resignations in writing. A resignation statement may be made in any form as long as it reaches the right body or entity. CDZ recommends, however, that the resignation be filed in writing (oral resignation may be recorded in minutes of a shareholders’ meeting or a board of directors’ meeting), as it is necessary to submit proof of it and register the change in the composition of the board of directors in the commercial register.

56
Appointment, Suspension and Removal of Directors
Must a reason be offered for resignation from the board of directors?

No. A board director may resign from the board of directors at any time and without giving any reason.

In practice:

If a director serves on the board for a consideration (receives remuneration), he/she should consider filing a resignation only for valid reasons, otherwise he/she may be held liable by the company for damage to the company caused by resigning without a valid reason.

56
Appointment, Suspension and Removal of Directors
Must a resignation from the board of directors be accepted by the company?

No. For a resignation statement to be effective, the company does not have to formally accept the resignation from the board. The resignation, however, must be filed at the company’s registered office and addressed to the right governing body/entity.

56
Appointment, Suspension and Removal of Directors
What actions must be taken for a director’s removal to be effective?

For the removal of a board director to be effective, the following must be done:

  • A shareholders’ resolution must be adopted (unless the articles of association indicate another body/entity authorized to remove a board director);
  • The director must be notified about his/her removal from the board (must receive a copy of the removal notice); and
  • A confirmation of receipt of the removal notice must be obtained.

Failure to notify the director about his/her removal causes his/her actions towards third parties on the company’s behalf to be legally binding on the company unless the third parties know about the removal and act in bad faith.

56
Appointment, Suspension and Removal of Directors
Can a director file an appeal against a resolution removing him/her from the board of directors?

No. A removed board director (who is not a shareholder) has no right to appeal against such a resolution. A director may only assert his/her claims related to his/her employment relationship or any other legal relationship with the company, e.g. a management contract.

56
Appointment, Suspension and Removal of Directors
Does a removed director have any duties to the company?

Yes. The removed director is obligated to provide explanations during the process of drafting the annual report and the financial statements for the period in which he/she served as a board director. He/she is also obligated, at the company’s request, to participate in the shareholders' meetings approving the annual report and the financial statements in order to provide explanations.

56
Appointment, Suspension and Removal of Directors
Does a removed director have any rights towards the company?

A removed director has the following rights:

  • To obtain information about the company;
  • To view the company’s annual report and financial statements (with a copy of a report of the supervisory board, if appointed), as well as an auditor’s opinion and report; and
  • To present written opinions on the company's annual report and financial statements.

However, the director may make use of these rights only to perform his/her duties (i.e. to provide explanations while preparing the annual report and financial statements for the period of his/her tenure) and participate in the shareholders' meeting approving the annual report and financial statements for this time period.
These rights exist until the financial statements for the last financial year in which the removed director held office are approved by the shareholders' meeting.

65
Special Status of Directors
Who decides on the remuneration of directors?

If directors hold their functions only under a resolution appointing them to the board of directors (without a separate contract), their remuneration is set out in the resolution of the body appointing them to the board (usually the shareholders' meeting).

If directors hold their function under an employment or civil-law contract as well, their remuneration is determined by the supervisory board or by an attorney appointed via a resolution of the shareholders' meeting.

65
Special Status of Directors
Can an employment contract be signed with a director for his/her term?

Yes. The company and the director may sign both an employment contract for the duration of the director’s term in office or a contract for the performance a specific task. It is in the company’s interests to conclude such contracts, because if a director is removed, it is not necessary to give notice of the termination of the contract, as it expires upon the effective removal of the director.

Case law:

Recent judicial decisions (e.g. the Supreme Court judgment of 21 January 2013, file ref. II PK 155/12) have held that, if, in a formally executed employment contract with a director for the duration of his/her term in office, provisions are included enabling the parties to terminate the contract, it will be treated as a definite-term contract, and thus will not expire automatically upon the removal of the director from the board.

65
Special Status of Directors
Who defines the terms of contracts with directors and who signs such contracts on the company’s behalf?

The terms of each contract with a board director (except contracts for the remuneration of board directors, which are defined by the body authorized to appoint the directors, unless the articles of association stipulate otherwise) are agreed and signed by an attorney appointed via a resolution of the shareholders' meeting or the supervisory board (if one exists within the company).

65
Special Status of Directors
Can a director act as an attorney of the company with respect to another director?

Yes. In such a case, the director represents the company not as a member of this company’s governing body but as an attorney appointed by a resolution of the shareholders' meeting.

Case law:

This view is reflected by the Supreme Court decision of 7 April 2010 (file ref. II UZP 5/10), which clearly admits the possibility that such a power of attorney may be granted to board directors.

65
Special Status of Directors
Who grants leave of absence to a director employed by the company?

A request of a director for leave can be approved (signed) by another director. The reason for this course of action lies in the legal principle that it is the managing person or body or another person that performs employment-related actions on the employer’s behalf. A director may not grant him-/herself leave, as this would be contrary to the essence of the employment relationship; that is, the subordination of the employee to the employer.

In practice:

Leave can be granted to a director by another person delegated this power by the company’s articles of association or acting under a power of attorney granted by the company.

65
Special Status of Directors
Is a director personally liable for the company’s liabilities?

Yes. A director bears the so-called subsidiary (auxiliary) liability for the company’s liabilities, i.e. is held responsible when enforcement against the company proves unsuccessful.

As concerns civil law liabilities, board directors will be liable for the company’s debts if enforcement against the company proves unsuccessful and they fail to prove that:

  • The bankruptcy petition was submitted on time, or that composition proceedings were initiated; or
  • The non-submission of a bankruptcy petition or the non-initiation of composition proceedings occurred through no fault of his/her own; or
  • Despite the directors’ failure to submit the bankruptcy petition and initiate composition proceedings, the creditor did not suffer any damage.

As concerns public law liabilities (e.g. taxes or social insurance premiums), board directors are liable as described above, with the exception of the last of the above prerequisites: namely, a director is not liable for public law liabilities if he/she identifies assets owned by the company, enforcement against which would make it possible to repay the company’s tax arrears to a considerable degree).

Directors are liable for civil law and public law liabilities with all of their property.

65
Special Status of Directors
Who terminates an employment contract with a director before and after he/she is removed?

If an employment contract is terminated with a director before or at the same time as his/her removal from the board, the company is represented by the supervisory board or an attorney appointed by a resolution of the shareholders' meeting.

With employees who have already been removed from the board, the company is represented by directors acting in accordance with the representation (signing) rules, a commercial proxy or an attorney authorized by the company.

65
Special Status of Directors
Can a director be involved with a competing business?

Yes, but only when he/she receives the company’s consent. Unless the articles of association provide otherwise, such consent is granted by the governing body authorized to appoint the board of directors. Consent may be granted only when circumstances indicate that there is no justified concern that the director’s participation in another company will have adverse consequences (e.g. because the two companies cooperate closely).

65
Special Status of Directors
When must a director obtain consent to his/her involvement in a competing business?

A director must obtain consent of the company’s governing body before starting a competing business in a situation when he/she plans to:

  • Carry on a competing business;
  • Participate in a competing business as a partner in a civil partnership, registered partnership or as a member of a governing body of a company, or participate in any other competitive legal entity as a member of its governing body;
  • Participate in a competing company while holding at least 10% of the company’s shares, and/or the right to appoint at least one director.
65
Special Status of Directors
What consequences will be suffered by a director who is involved in a competing business?

Involvement of a board director in a competing business may be grounds for removal from the board. He/she may also be liable for the damage caused to the company by such a competitive business and bear penal liability if the damage he/she caused is considerable, i.e. PLN 200,000 (up to 10 years of imprisonment), even when he/she did not sign any non-compete contract or any other contract with non-compete provisions.

Additionally, if the director and the company signed:

  • An employment contract, it may be terminated with notice or without notice (disciplinary dismissal) due to a serious breach of employee duties;
  • A separate non-compete contract or any other contract with non-compete provisions, the consequences for the breach are as specified in the contract, and most frequently include financial liability (the director has to pay a contractual penalty or redress damage on the basis of general principles of law). Other sanctions may also be provided for in such a contract, including the sanction of termination of the legal relationship with the company.

In addition to these general regulations, more detailed restrictions (and sanctions) on actions that board directors may take are also provided in specific laws, such as the Bankruptcy Law or the Unfair Competition Act.

65
Special Status of Directors
Is the consent of the company’s shareholders’ meeting required for the execution of a loan agreement with its director, supervisory board member, liquidator or commercial proxy?

Yes. The consent of the shareholders’ meeting must be obtained to enter effectively into a loan agreement (credit, suretyship or a similar agreement) with a director, supervisory board member, liquidator or commercial proxy. A loan signed without such consent is invalid unless the shareholders' meeting grants such consent within two months from the date of the company signing the loan.

65
Special Status of Directors
What are the implications of granting (or refusing to grant) a vote of approval to a director?

The grant of a vote of approval to a board director shows that his/her actions in the company are approved and, generally, absolves a director from liability to the company for any events occurring in a given financial year that are disclosed in the company’s financial statements, the annual report and other documents submitted to shareholders, as long as these documents are truthful.

If no resolution granting a vote of approval is adopted, this only means that the company may file potential claims against a director.

A resolution refusing to grant a vote of approval to a director usually precedes the company’s filing of claims against the director for damage to the company caused as a result of an action or omission of his/hers that was contrary to law or the articles of association. The resolution containing the refusal to grant a vote of approval does not have to state the reasons for this decision, but it is advisable to do so.

65
Special Status of Directors
Can a director be held liable to the company despite having been granted a vote of approval?

Yes. The vote of approval does not prevent court action against a director in the following situations (examples):

  • The director provides false data when registering the company or increasing its share capital;
  • In-kind contributions made to the company are accepted at an overinflated price and a director who knows about this notifies the commercial register about the company’s incorporation or an increase in its share capital;
  • A distribution to the shareholders is carried out contrary to law or the company’s articles of association;
  • A resolution approving the annual report and the company’s financial statements for the preceding financial year was passed on the basis of documents or information that were misleading, unreliable, untrue or incomplete;
  • A shareholder demands, in court, that damages be paid to the company by a director who caused damage to the company;
  • The director caused damage to the company and the shareholders' meeting, when it voted to grant approval to the liable director, did not have any information on the facts justifying the director’s liability; or
  • The company’s bankruptcy is declared.
65
Special Status of Directors
Must companies file with the commercial register information about a change in address for delivery of notices of a board director? If yes, how?

Yes. If a director’s address registered in the commercial register changes, the company must notify the commercial register of the director’s new address within 7 days of the change by filing a written statement with the commercial register. The court fee for filing such a document is PLN 40.

66
Management of the Company’s Affairs (Duties of Board Directors)
Can the board of directors, before the company is registered, incur any liabilities on the company’s behalf?

Yes. The company may incur liabilities and acquire rights at this stage, including ownership of real estate and other property rights.

66
Management of the Company’s Affairs (Duties of Board Directors)
What consequences may the controlling company face if its board fails to notify a subsidiary about the emergence of a controlling relationship?

When the controlling company fails to notify a subsidiary that a controlling relationship has arisen within two weeks of its assumption of control, the controlling company may not exercise any voting rights that it has from shares representing more than 33% of the subsidiary’s share capital. Any resolution of the shareholders' meeting adopted contrary to this principle is invalid, unless the required quorum was present and the majority of votes cast were in favor of the resolution (disregarding invalid votes).

A controlling company is a company that:

  • Has, directly or indirectly, a majority of votes at the shareholders' meeting or in the board of directors of another company (the subsidiary); or
  • Has the right to appoint or remove the majority of the board of directors of the subsidiary; or
  • Has the right to appoint or remove the majority of the supervisory board of the subsidiary; or
  • Its directors represent more than half of the directors of the subsidiary; or
  • It exerts a decisive influence on the operations of the subsidiary.
66
Management of the Company’s Affairs (Duties of Board Directors)
What are the duties of the board of directors if a management contract is signed between the controlling company and its subsidiary?

The board of directors of the controlling company or of its subsidiary must, within three weeks, lodge with the registry court an extract of the contract that includes provisions specifying the scope of the controlling company’s liability for damage to the subsidiary caused by non-performance or negligent performance of the contract, and the scope of the controlling company’s liability for the subsidiary’s obligations to its creditors. If the contract does not regulate or excludes the controlling company’s liability, this also must be disclosed to the registry court.

66
Management of the Company’s Affairs (Duties of Board Directors)
What may be the consequences if the board of directors fails to notify the registry court that a management contract has been signed?

Failure to notify the registry court about the signing of a contract concerning the subsidiary’s management by the controlling company within three weeks of its signature will result in the invalidity of the provisions of the contract that limit or exclude the controlling company’s liability to the subsidiary and its creditors.

66
Management of the Company’s Affairs (Duties of Board Directors)
What are the board’s duties if shares in the company are sold?

After being notified by a party to a sale agreement that it has sold its shares, the company’s board of directors must update its share register and file an application with the registry court requesting a change in the commercial register (if the sale relates to shares representing at least 10% of the company’s share capital), and must submit an updated list of shareholders that shows the number and nominal value of the shares acquired by the new shareholder. The application must be accompanied by addresses for service of notices of persons or directors of entities authorized to appoint the board of directors.

If shares representing less than 10% of the share capital are sold, the company’s board of directors must file only an updated list of shareholders with the registry court.

66
Management of the Company’s Affairs (Duties of Board Directors)
What are the board’s duties if a pledge is established over the company’s shares?

Upon receipt of a notice from a party to the pledge agreement that a pledge has been established (the agreement being the basis for the encumbrance of shares), the board of directors must record the pledge in the share register. The board must also file an updated list of shareholders with a note that the pledge has been established with the registry court.

66
Management of the Company’s Affairs (Duties of Board Directors)
What consequences will a director suffer for failure to file a list of shareholders when a requirement exists to do so?

A penalty of PLN 20,000 is imposed by the registry court.

66
Management of the Company’s Affairs (Duties of Board Directors)
When must a change be communicated to the registry court?

Any change that is subject to mandatory registration in the commercial register (such as an amendment to the articles of association, or a change in the composition of the board of directors or supervisory board) must be communicated within seven days of the date of the event triggering the obligation to register (e.g. the adoption of a shareholders' meeting’s resolution amending the articles of association or changing the composition of the company’s body, or a board resolution changing the company’s address).

The registration application must be filed on an official form. It is the company’s duty to pay, without being requested, the court fee and the publication fee, if the entry is subject to announcement in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy, a publication for official announcements).

66
Management of the Company’s Affairs (Duties of Board Directors)
What are the consequences of the board’s failure to notify the registry court of a change?

If the company fails to notify in due time any change that is subject to mandatory registration in the commercial register, the registry court, if it finds out about it, will give directors seven days to give notification of the change voluntarily, and may impose a fine on them after this time if they fail to comply. The fine may not be higher than PLN 10,000, unless it has been imposed twice without effect. The total sum of fines concerning the same issue may not exceed PLN 1,000,000. If directors continue to ignore the duty to notify, the registry court may appoint a curator for the company for a total period of up to eighteen months or terminate the company and appoint a liquidator.

In cases justified by pragmatic reasons, the registry court may remove any inaccurate data or enter any data that reflects the facts.

66
Management of the Company’s Affairs (Duties of Board Directors)
What is the procedure for setting up a branch of a Polish company in Poland?

The company’s board of directors must adopt a resolution specifying the assets intended for the branch, the scope of its activity and its location (address). If the articles of association stipulate such a duty, the board must obtain the consent of the appropriate governing body of the company. The branch does not have to be registered in the commercial register, but the parent company must update its status in that register.

66
Management of the Company’s Affairs (Duties of Board Directors)
Can companies suspend their operations?

Yes. A company without employees can suspend its business operations for a period of one to twenty-four months by filing for suspension with the registry court. The suspension period begins from the date stated in the application for suspension, but cannot begin earlier than the date of filing the application with the registry court. The suspension period continues until an application is filed with the registry court for the resumption of business operations, provided that this occurs within twenty-four months of the beginning of the suspension period. During the suspension period, the company may not carry out its business operations.

In practice:

During the suspension period the company may not conduct on-going business operations but it has the right to sell assets to settle its liabilities.

66
Management of the Company’s Affairs (Duties of Board Directors)
How can the company’s operations be financed by shareholders?

There are several methods by which shareholders can finance the company’s business operations, including:

  • Granting a loan to the company;
  • Adopting compulsory contributions, if this is provided for by the articles of association;
  • Increasing its share capital by issuing new shares to the existing shareholders or increasing the value of the existing shares; and
  • Issuing bonds.
66
Management of the Company’s Affairs (Duties of Board Directors)
Is a resolution of the company’s board required before a loan from a shareholder is incurred?

Yes, because the loan is an act beyond the company’s ordinary management. Furthermore, if the loan value totals more than twice the amount of the company’s share capital, a shareholders’ resolution is required before the loan is incurred (but this obligation may be excluded in the articles of association). Lack of a shareholders’ resolution approving the loan will not result in the invalidity of the loan, but may expose directors to liability to the company for unlawful acts.

66
Management of the Company’s Affairs (Duties of Board Directors)
Is the board of directors required to keep a share register?

Yes. The board must keep a share register in which it records the following:

  • The full name (or business name) of each shareholder;
  • The company’s registered office and address, or correspondence address;
  • The number and nominal value of his/her/its shares;
  • Any pledge or usufruct over the shares and any voting rights exercised by the pledgee or user;
  • The amounts of all contributions made;
  • as well as any changes concerning shareholders and their shares.
In practice:

After each new entry is made in the share register, the board of directors must deliver to the registry court a new list of shareholders, signed by all directors and showing the number and nominal value of the company’s shares and information about any pledge or usufruct that has been established over the shares. In addition, a new list of addresses for service of notices of persons or directors of the company’s shareholder (if shareholders are authorized to appoint the company’s board of directors) must be delivered to the registry court.

66
Management of the Company’s Affairs (Duties of Board Directors)
What are consequences of failure to keep a share register?

A director who permits that the board does not keep a share register, despite the obligation to do so, is liable to a fine of up to PLN 20,000. The fine is imposed by the registry court.

66
Management of the Company’s Affairs (Duties of Board Directors)
On what basis does the board make an entry in the share register?

The board of directors makes an entry in the share register following receipt of a notice by either party to a share sale or encumbrance agreement, accompanied by a copy of this agreement. A transfer or encumbrance of shares will be effective towards the company as of the date of delivery of the above documents by the buyer or seller of the shares, the pledgor or pledge.

66
Management of the Company’s Affairs (Duties of Board Directors)
What should the board do with the minutes of the company’s shareholders’ meetings?

The board of directors is obligated to keep a book of minutes of the shareholders’ meetings, both in ordinary written form and in the form of a notary deed.

Evidence of the board convening any and all shareholders’ meetings (if a shareholders' meeting is held as a result of being convened by the board) must be entered into the book of minutes. A shareholder has the right to view the book of minutes and request that copies of resolutions certified by the board be provided to him/her.

66
Management of the Company’s Affairs (Duties of Board Directors)
What company information must be placed on the company’s website?

The board of directors is obligated to place the following information on the company’s website:

  • The company’s business name;
  • Its legal form;
  • Its registered office and address;
  • The registry court it falls under and the company’s registry number in the commercial register;
  • The company’s tax identification number (NIP); and
  • The company’s share capital amount.

The above information must also be placed:

  • On any commercial letters and orders made by the company, on paper and electronically;
  • In written declarations directed to designated persons and related to the company’s activity (this obligation does not apply to declarations of intent directed to persons in regular contractual relationships with the company);
  • In any and all offers (if the company offers goods or services for direct or remote sale through mass media, IT networks or unaddressed mail).
66
Management of the Company’s Affairs (Duties of Board Directors)
What are the consequences if the board permits an issue of commercial letters and orders without the legally required information?

This violation is subject to a fine of up to PLN 5,000 imposed by the registry court.

66
Management of the Company’s Affairs (Duties of Board Directors)
When is the board not permitted to pay out interest due on a loan granted to the company by a shareholder?

Whenever the company’s assets are insufficient to cover fully the share capital. Those shareholders who unlawfully received any such payment must return it to the company, and the board directors are jointly and severally liable with the payment beneficiary for this return.

66
Management of the Company’s Affairs (Duties of Board Directors)
When can the board issue an interim dividend to shareholders?

An interim dividend may be issued when:

  • This possibility is provided for in the articles of association;
  • The company has sufficient funds for the issue;
  • The approved financial statements for the preceding financial year show profit;
  • The company has earned a profit from the end of the preceding financial year (financial statements for the present reporting period must be prepared);
  • The board plans to issue a dividend at the end of the current financial year; and
  • The board adopts a resolution approving the issue by an absolute majority (or by the type of majority stipulated in the articles of association).

The amount of the interim dividend issued may not be higher than half the net profit earned from the end of the preceding financial year, plus the reserve capital retained from profits and minus uncovered losses and the sum of the values of the shares in the company’s share capital acquired by the company.

66
Management of the Company’s Affairs (Duties of Board Directors)
Can an appeal be filed against a board resolution? If yes, by whom?

Board resolutions may be appealed in court to establish the existence or non-existence of a legal relationship or right. The appeal may be launched by anyone who has legal interest in it, e.g. a shareholder or a supervisory board member.

In practice:

The Commercial Companies Code does not regulate this issue. The method of appeal recommended above by CDZ is based on a ruling of the seven judges of the Supreme Court of 18 September 2013 (file ref. III CZP 13/2013).

66
Management of the Company’s Affairs (Duties of Board Directors)
Can the board of directors change the articles of association?

No. A resolution of the shareholders' meeting is required to amend the articles of association.

66
Management of the Company’s Affairs (Duties of Board Directors)
Can the board establish the consolidated text of the articles of association?

Yes. The consolidated text of the articles of association must be adopted by the board in a resolution and then signed by all the board directors and filed with an application to register the amendment with the registry court.

In practice:

Even though the provisions of the law do not expressly regulate whether the consolidated text must be signed by all the board directors or only those authorized to represent the company, CDZ recommends the former course of action. In some cases, the registry courts accept a consolidated text signed by a subset of directors acting in accordance with the company’s signing rules, but this is not always the case.

66
Management of the Company’s Affairs (Duties of Board Directors)
What consequences do directors face if the company fails to keep accounting books?

Failure to maintain accounting books or maintenance of such books in a manner that violates the law, as well as recording untrue information in accounting books, is subject to a fine of up to PLN 1,080,000 or imprisonment for up to two years, or both.

66
Management of the Company’s Affairs (Duties of Board Directors)
Can the board refuse to give explanations about the company to a shareholder?

Yes. Despite the shareholder’s right to supervise the board’s activity, the board may refuse to give explanations to the shareholder and to provide access to the company’s books and documents in a situation when there is a reasonable concern that the shareholder may use the received data for purposes contrary to the company’s interest and thereby cause considerable damage to the company.

In addition, the board of directors may refuse to enable the shareholder to exercise the right to supervise its activities if an audit committee or supervisory board exists in the company and the articles of association exclude or limit individual supervision by shareholders.

66
Management of the Company’s Affairs (Duties of Board Directors)
Is a board resolution valid if it is adopted when not all directors have been notified about a board meeting?

No. The board of directors may adopt resolutions only when all of its directors have been duly notified about a board meeting.

66
Management of the Company’s Affairs (Duties of Board Directors)
Can the board of directors adopt resolutions in writing or over the telephone?

Yes, if this possibility is provided for in the articles of association.

In practice:

Legal provisions offer considerable leeway as concerns the organization of relations within the company, for instance by setting out rules for the board’s adoption of resolutions. Such rules are binding on the company and any resolutions adopted in accordance with the rules will be valid.

66
Management of the Company’s Affairs (Duties of Board Directors)
When is the consent of the shareholders’ meeting necessary for the company to enter into a sale contract?

Entry into a sale agreement requires the consent of the shareholders' meeting if the agreement concerns the sale of the company’s business or real estate (in the latter case the articles of association may exclude the obligation to obtain consent).
The shareholders’ consent is also required when the company enters into a contract to purchase real estate (or a share in a real property) or fixed assets for a price exceeding one fourth of the share capital but not lower than PLN 50,000, before the lapse of two years from the date of the company’s registration (unless such a contract is permitted by the articles of association).

In the above cases, a sale contract signed without consent will be invalid.

The shareholders’ consent is also required for the company to enter into a sale contract whose value exceeds the amount of the share capital by a factor of two (the articles of association may exclude this obligation). In such a case, however, entry into the sale agreement without the shareholders’ consent does not result in the sale contract being invalid, but only in the board directors incurring internal liability.

66
Management of the Company’s Affairs (Duties of Board Directors)
Must the shareholders’ meeting grant its consent to a contract to sell the company’s business or real estate prior to the board signing such a contract?

No. Such consent may be granted after the sale contract is signed but not later than within two months of the date of the company’s signature of the contract. The shareholders’ meeting’s consent operates retroactively from the moment of signature of the contract.

66
Management of the Company’s Affairs (Duties of Board Directors)
Can an incomplete board manage a company’s affairs?

An “incomplete” board of directors is a board with fewer directors than the minimum number specified in the articles of association.

The incomplete board may manage the company’s affairs only within the scope of ordinary management. However, if at least one director objects to a transaction, then (since the board may not adopt any resolution) the director(s) proposing the transaction must desist or find another way of resolving the controversy to avoid liability for causing damage to the company.

An incomplete board may not manage the company’s affairs beyond the scope of ordinary management, as any such actions must be approved by a board resolution with at least the minimum number of directors set out in the articles of association.

66
Management of the Company’s Affairs (Duties of Board Directors)
Can a board director be liable for a company’s acquisition of its own shares?

Yes. A director who permits the company to acquire its own shares (or accept them as a pledge) is subject to a fine of up to PLN 1,080,000, restriction of liberty for up to one year, or imprisonment for up to six months.

66
Management of the Company’s Affairs (Duties of Board Directors)
In what situations must a director request a board approval?

Whenever a specific action goes beyond ordinary management, or if, prior to the action being taken, at least one of the directors objects to the action, even if the action lies within the scope of ordinary management.

In practice:

There is no statutory definition of the term “ordinary management”. Whether a given matter lies within the scope of ordinary management depends on the characteristics of a given company, the scope of its activity and its financial standing. Actions that surpass ordinary management usually include any and all unusual matters or matters of particular importance.

66
Management of the Company’s Affairs (Duties of Board Directors)
When is a resolution of the supervisory board or shareholders' meeting binding on the company’s board of directors?

A resolution of the supervisory board or shareholders' meeting on a given issue is binding on the company’s board of directors if its passage is required by law or the provisions of the articles of association.

Actions taken by the board of directors without a resolution, when one is required by legal regulations, are invalid, whereas actions taken by the board of directors without a resolution when one is required by the articles of association are valid, but directors may be held liable to the company for the breach of the articles of association.

66
Management of the Company’s Affairs (Duties of Board Directors)
When must a director abstain from managing the company’s affairs?

A director must abstain from participation in resolving matters involving the following persons:

  • The director him-/herself;
  • His/her spouse;
  • His/her relatives by blood and marriage to the second degree; and
  • Any persons with whom this director is personally related.
In practice:

A legal transaction by the company under a board resolution adopted contrary to the above prohibition will be valid, but the director may be held liable for any damage caused to the company.

66
Management of the Company’s Affairs (Duties of Board Directors)
When must the board file for the company’s bankruptcy?

The company’s board is obligated to file for the company’s bankruptcy within 30 days of the day on which grounds to declare bankruptcy first arose.

It is necessary to file for bankruptcy when the company becomes insolvent; i.e. when:

  • The company fails to meet its financial liabilities as they fall due; or
  • The liabilities of the company exceed the value of its assets, even if the company pays the liabilities as they fall due.
In practice:

The above conditions are not precise, which leads to many controversies in practice. Consequently, board directors often find it difficult to prove that they have filed for bankruptcy in due time or that there were in fact no grounds to declare bankruptcy.

67
Representation of the Company
Can the company have signing rules that are “limited by value”?

In general, the articles of association may provide for different signing rules depending on the value of the transaction at issue. For example, the provisions of the articles of association may stipulate that the company may be represented by any board director individually, except for transactions whose value exceeds a certain amount, for which a joint signature of two directors is required.

In practice:

This issue is quite controversial. Our experience is that the Krakow registry court accepts such signing rules, whereas the practice is not accepted by the Warsaw registry court, which dismisses any applications for the registration of articles of association with “limited by value” signing rules.

67
Representation of the Company
When may the board of directors not represent the company?

Examples of exceptions to the rule of the board’s sole right to represent the Company:

  • A company may not be represented by its board of directors in a contract between the company and a board director or in a dispute between the company and a board director. In such cases, the company is represented by an attorney appointed by a resolution of the shareholders' meeting or of the supervisory board (if one exists in the company). A breach of this provision results in the invalidity of the contract;
  • A company may not be represented by its directors in disputes concerning the cancellation or invalidation of a shareholders’ resolution initiated by the board of directors or individual directors (as a rule, the company may be represented in a lawsuit by its board of directors if no attorney has been appointed pursuant to a shareholders’ resolution; if there is no such resolution and the board of directors may not act for the company, the court competent to resolve the suit will appoint a curator to the company).
67
Representation of the Company
Can an incomplete board of directors represent the company?

An “incomplete” board of directors is a board with fewer directors than the minimum number specified in the articles of association.

According to the prevailing line of judgments of the Supreme Court, the directors of an incomplete board may effectively represent the company if the signing rules specified in the company’s articles of association are followed. If, according to the articles of association, the board must consist of three directors, and the company may be represented by two directors acting jointly, the absence of the third director will not affect the ability of the other directors to represent the company effectively.

67
Representation of the Company
Is a contract signed by one director valid if the company must be represented by two board directors acting jointly?

No. Such a contract is deemed invalid.

In practice:

Current practice, both in case law and in legal doctrine, holds that it is preferable on pragmatic grounds to allow a contract’s validity to be ratified by the company. The counterparty may set a time limit for the ratification of the contract. The contract is not deemed invalid until the other party refuses to ratify it or the time limit for its ratification lapses without effect. Disputes as to whether a contract executed contrary to the signing rules is invalid or only suspended as ineffective (until ratified by the counterparty) are resolved by courts on a case-to-case basis.

67
Representation of the Company
Can the company grant a general power of attorney to a director?

No. The granting of a general power of attorney to one director in particular when the company has joint representation is, according to the prevailing case law, a circumvention of law.

Case law:

It is possible, however, for a company with joint representation to grant one of its directors a limited power of attorney to effect legal acts of a specific type (e.g. the power to execute leases), or else a specific power of attorney to effect a specific legal act (e.g. the power to execute a specific lease for specific premises or with a specific contractor).

67
Representation of the Company
Must a letter to the company be delivered to two directors if the company has joint representation?

No. Statements and letters to the company may be delivered to any board director or commercial proxy, even if the company has joint representation.

68
The End of the Company’s Financial Year
What are the board’s duties at the end of the company’s financial year?

With respect to the end of the financial year, the company board must perform the following corporate duties:

  • Prepare annual financial statements and the annual report for the preceding financial year, not later than three months after the end of the financial year;
  • Have the company’s financial statements audited (if they are subject to audit);
  • Provide to shareholders the company’s annual financial statements and annual report, as well as the auditor’s opinion and report (if the financial statements are subject to audit), at least 15 days prior to the shareholders' meeting;
  • Convene the ordinary shareholders’ meeting so that it can be held within six months of the end of each financial year;
  • Participate in the shareholders' meeting to provide explanations to shareholders;
  • File with the commercial register the above documents and the resolutions of the shareholders' meeting approving the above statements and report and distributing the company’s profit or covering its loss within 15 days from the date the annual financial statements were approved;
  • File the above documents with the tax office within 10 days of the date the annual financial statements were approved.
In practice:

If the company’s financial statements and the annual report have not been approved within six months of the end of the financial year, they must be submitted to the commercial register within 15 days after this time, and additionally within 15 days after they are approved (i.e. the financial statements must be submitted twice).

68
The End of the Company’s Financial Year
Can a director refuse to sign the company’s financial statements?

Yes, but the refusal must be made in writing, state reasons and be attached to the financial statements. The refusal statement is an integral part of the company’s annual financial statements.

68
The End of the Company’s Financial Year
When must financial statements be audited?

The audit requirement pertains to the financial statements of going concerns whose financial statements for the preceding financial year for which financial statements were prepared meet at least two of the following conditions:

  • The average annual headcount in full-time equivalents is at least 50 persons;
  • The company’s total balance sheet assets at the end of the financial year amounts to no less than the PLN equivalent of EUR 2,500,000;
  • The net proceeds from the sale of products and goods and from financial operations during said financial year amounted to no less than the PLN equivalent of EUR 5,000,000.
68
The End of the Company’s Financial Year
Who appoints an auditor and who signs a contract with the auditor on the company’s behalf?

Auditors are appointed by the shareholders' meeting, unless the articles of association stipulate otherwise (e.g. authorize the supervisory board to do so). If the appointment is made by the board of directors, it is invalid.

The contract with the auditor is signed on the company’s behalf by the board of directors in accordance with the signing rules.

68
The End of the Company’s Financial Year
What are the consequences of a failure to prepare financial statements?

Failure to prepare the company’s annual financial statements within three months from the end of the financial year, preparation of the financial statements in a manner that violates the law, and the recording of untrue information in the financial statements, are punishable by a fine of up to PLN 1,080,000 or imprisonment for up to two years, or both.

68
The End of the Company’s Financial Year
What are the consequences of a failure to submit annual financial statements for audit (if required by law to do so)?

This offence is punishable by a fine of up to PLN 1,080,000 or restriction of liberty for up to two years.

68
The End of the Company’s Financial Year
What are the consequences of a director’s failure to provide shareholders with financial statements?

Failure to provide shareholders with financial statements, management reports, and, if the company’s financial statements are subject to audit, the auditor’s report, at least 15 days prior to the company’s annual shareholders’ meeting is punishable by a fine of up to PLN 1,080,000 or restriction of liberty for up to two years.

68
The End of the Company’s Financial Year
What are the consequences of a director’s failure to submit the financial statements to the registry court on time?

Failure to submit financial statements and the annual report to the registry court on time is punishable by a fine of up to PLN 1,080,000 or restriction of liberty for up to two years. The financial statements must be submitted even if they have not been approved by the shareholders' meeting.

In practice:

Increasingly often, the registry court imposes fines as a disciplinary measure for failure to submit financial statements for registration in the commercial register.

68
The End of the Company’s Financial Year
How are financial statements filed with the registry court?

Financial statements, annual reports and minutes of ordinary shareholders’ meetings are filed with the registry court on-line using a qualified electronic signature or a signature confirmed by an ePUAP secure profile of at least one natural person whose PESEL number is disclosed in the commercial register and who is registered as a board director, bankruptcy trustee or liquidator. A statement that documents attached to the submission meet the requirements set out in the Accounting Act is attached to the submission.

69
The Shareholders' Meeting
Can a shareholders' meeting be held outside Poland?

No. Shareholders' meetings may be held within the territory of Poland only.

In practice:

Most resolutions may be adopted, however, without holding a shareholders’ meeting, if consent in writing is given to a proposed resolution or to a written vote. In such circumstances, shareholders may vote from outside Poland.

69
The Shareholders' Meeting
Can a shareholders' meeting be held anywhere in Poland?

Yes, if all shareholders consent in writing to the location. The rule is that shareholders' meetings must be held only in the company’s registered office or at any other location specified in the articles of association.

69
The Shareholders' Meeting
When must the board of directors convene a shareholders' meeting?

In general, the board of directors has the right to convene a shareholders' meeting at any time, but also the obligation to convene the shareholders' meeting:

  • So it is held within six months after the end of each financial year (this is the ordinary, or annual, shareholders' meeting);
  • Upon the request of a shareholder or shareholders representing at least 1/10 of the share capital;
  • Whenever the balance sheet prepared by the board (or by an auditor upon the request of a shareholder or shareholders representing at least 1/10 of the share capital) indicates a loss exceeding the sum of the company’s supplementary and reserve capitals and half of the company’s share capital.
In practice:

The purpose of the shareholders' meeting in the latter case is to notify shareholders about the company’s financial standing and enable them to adopt a resolution on (i) the company’s continued existence (through the introduction of a program to remedy the company’s financial weakness), or (ii) its dissolution and liquidation.

69
The Shareholders' Meeting
What are the consequences of a director’s failure to convene a shareholders' meeting?

Failure to convene a shareholders’ meeting required to be convened under legal regulations or the articles of association is punishable by a fine of up to PLN 20,000, imposed by the registry court.

69
The Shareholders' Meeting
When can a shareholder convene or request the convocation of the shareholders' meeting?

A shareholder may convene or request the convocation of the shareholders' meeting when the articles of association permit the shareholder to do so, as well as in certain cases set out by legal regulations, i.e.:

  • When the shareholder or shareholders represent at least 1/10 of the company’s share capital, they may request that an extraordinary shareholders' meeting be convened and certain items be put on the agenda;
  • When the shareholder or shareholders represent at least 1/10 of the company's share capital, they may convene an extraordinary shareholders' meeting, but only when the board of directors fails to convene the meeting on their request and the registry court authorizes them to convene it.
69
The Shareholders' Meeting
Can a person who is not a shareholder chair the shareholders' meeting?

Yes. Legal regulations do not provide for any restriction on the identity of the chair of the shareholders' meeting and, therefore, any person can be elected.

69
The Shareholders' Meeting
When can a buyer of shares exercise voting rights at the shareholders' meeting?

A buyer of shares may exercise his/her voting rights from the moment the company is effectively notified about the acquisition of a share until the share is transferred or a pledge or usufruct is established over the share with voting rights (if the articles of association permit the share pledgee or user to exercise voting rights).

69
The Shareholders' Meeting
Can the company exercise voting rights attached to shares acquired for the purpose of redemption?

No. The company may not exercise voting rights attached to shares acquired for the purpose of redemption (or exercise any other corporate or property rights attached to such shares).

In practice:

Legal doctrine takes the opposing view, relying on the fact that the Commercial Companies Code does not expressly exclude the possibility of exercising voting rights attached to the company’s own shares (as it does in the case of a joint-stock company’s own stocks). CDZ is of the opinion that this stance is incorrect.

69
The Shareholders' Meeting
In what cases must a quorum be present for the shareholders' meeting to adopt a resolution?

The quorum is the minimum number of shareholders (or their representatives), representing a certain portion of the share capital, whose presence is required for a resolution to be adopted. A quorum must be present to adopt resolutions only in the cases set out in the articles of association or in legal regulations, for example:

  • To adopt a resolution on an issue not included in the shareholders' meeting’s agenda (100% of the share capital);
  • To adopt a resolution if the shareholders' meeting was not formally convoked (100% of the share capital);
  • To adopt a resolution amending the articles of association to increase shareholders’ contributions, or curtail shareholders’ general rights or rights granted personally to individual shareholders (the shareholders affected by the changes need to be present);
  • To adopt a resolution on the continued existence of the company if proceedings to liquidate the company have been initiated (100% of the share capital);
  • To adopt a resolution merging the company with another company (1/2 of the share capital);
  • To adopt a resolution merging the company with a partnership (1/2 of the share capital);
  • To adopt a resolution demerging the company (1/2 of the share capital);
  • To adopt a resolution transforming the company into a partnership (2/3 of the share capital); and
  • To adopt a resolution transforming the company into a joint-stock company (1/2 of the share capital).
69
The Shareholders' Meeting
Is a shareholders’ resolution adopted without the required quorum valid?

No. As a rule, quorum is not required for resolutions of the shareholders' meeting to be valid. However, in situations where statutory legislation or the articles of association require a quorum to be present, a resolution adopted without the required quorum may be considered invalid (and a declaration of its invalidity may be obtained by filing an appeal on the terms set out in the Commercial Companies Code) or non-existent (and a confirmation that it does not exist may be obtained by filing an appropriate action with a court).

Case law:

There is a discrepancy in legal doctrine as to the consequences of adopting a resolution without a quorum. In our view, the former of the above stances (that the resolution is invalid) seems more appropriate, as the Commercial Companies Code does not provide for an institution of a “non-existent resolution”. Moreover, the occurrence of “non-existent resolutions” in legal dealings would create legal uncertainty as there are no time limits for filing an action with a court to determine the existence of the resolution. This view is confirmed in particular by the 16 July 2009 judgment of the Katowice Appellate Court (file ref. V ACa 241/2009) and the 30 January 2008 judgment of the Białystok Appellate Court (file ref. I ACa 612/2007).

69
The Shareholders' Meeting
When must a resolution of the shareholders' meeting be recorded by a notary?

Generally, resolutions of the shareholders' meeting do not have to be recorded by a notary (the ordinary written form is sufficient), except for the following (examples):

  • Resolutions amending the articles of association;
  • Resolutions terminating the company or transferring its registered office outside Poland;
  • Resolutions merging the company with another company or partnership;
  • Resolutions on the company’s demerger or a takeover of a part of another limited liability company or joint-stock company; and
  • Resolutions transforming the company’s legal form.
69
The Shareholders' Meeting
How is the absolute majority calculated?

Unless legal regulations or the provisions of the articles of association stipulate otherwise, the resolutions of the shareholders' meeting are adopted by an absolute majority vote.

‘Absolute majority’ means that more than half of the votes cast were in favor of the resolution. When establishing whether a vote resulted in an absolute majority, votes that were not cast (e.g. due to absence) or are invalid are ignored, while votes “for”, “against” and “abstaining” cast during the vote are taken into account.

69
The Shareholders' Meeting
Who may appeal against a resolution of the shareholders' meeting?

A resolution of the shareholders' meeting may be appealed against (i.e. an action may be filed to cancel the resolution or declare its invalidity) by the following entities:

  • The board of directors, supervisory board, audit committee, or members of these bodies;
  • Any shareholder who voted against the resolution but demanded that his/her objection be recorded after it was adopted;
  • Any shareholder who was unreasonably prevented from participating in the shareholders' meeting;
  • Any shareholder who was absent from the shareholders' meeting, but only when the meeting was convened in a defective manner or a resolution was adopted on an issue not put on the agenda;
  • Any shareholder who was omitted in a written vote or who did not consent to a written vote, or who voted against the resolution and objected to it within two weeks after having become aware of the resolution.
69
The Shareholders' Meeting
Until when can a lawsuit be filed to cancel or invalidate a resolution of the shareholders' meeting?

A lawsuit to cancel a resolution that is contrary to the articles of association or good custom and causes harm to a shareholder or the company’s interest must be filed within one month from the date the person/entity lodging the appeal became aware of the resolution, but not later than six months from the date on which the resolution was adopted.

Whereas a lawsuit to invalidate a resolution that is unlawful must be filed within six months of the date the person/entity lodging the appeal became aware of the resolution, but not later than three years from the date on which the resolution was adopted.

69
The Shareholders' Meeting
Can a director or employee of the company be a shareholder’s representative at the shareholders’ meeting?

No. Neither a director nor an employee may be a shareholder’s representative at the shareholders’ meeting. However, this prohibition does not cover the cases when a director or an employee of the company acts at its shareholders’ meeting as a body authorized to represent the shareholder (e.g. when both the company and the shareholder have management boards composed of the same persons).

69
The Shareholders' Meeting
In what form must a power of attorney be granted to authorize its holder to participate in and vote at a shareholders' meeting?

A power of attorney must be granted in writing, irrespective of whether resolutions will be recorded by a notary or in ordinary written form.

69
The Shareholders' Meeting
Can a company demand that an original power of attorney be provided by a proxy before taking part in a shareholders' meeting?

Yes, the power of attorney must be filed in the book of minutes kept by the company’s board of directors.

70
The Supervisory Board
When must a supervisory board be appointed in the company?

A supervisory board (or audit committee) must be established in the company if the company’s share capital exceeds PLN 500,000 and the company has at least twenty six shareholders. If these conditions apply, the shareholders must adopt a resolution amending the articles of association to introduce provisions for a supervisory board (or audit committee).

70
The Supervisory Board
What are the statutory duties of the supervisory board?

The statutory duties of the supervisory board include:

  • Exercising ongoing supervision over the company’s activities in all areas (jointly with shareholders, unless their supervision rights are excluded in the articles of association);
  • Assessing the annual report and financial statements for the preceding financial year for compliance with the company’s books, documents, and the facts;
  • Assessing the board of directors’ proposals concerning profit distribution or loss coverage; and
  • Submitting an annual written report on the findings of this assessment to the shareholders' meeting.
70
The Supervisory Board
Can the supervisory board’s powers be extended via the articles of association?

In general, the list of the supervisory board’s powers may be freely extended via the articles of association, but the supervisory board may not be assigned powers that are allocated by law to other governing bodies; for example, the supervisory board may not be entitled to manage the company’s affairs or represent it (with some exceptions), and the right to consent to a transfer of the company’s business may not be taken away from the shareholders' meeting and granted to the supervisory board. Examples of powers that may be delegated to the supervisory board in the articles of association include:

  • The right to consent to specific actions of the board of directors (e.g. the incorporation of a subsidiary, the sale of shares in a subsidiary, the taking out of a loan);
  • The right to suspend (for valid reasons) all or some of the board directors;
  • The right to appoint and remove board directors; and
  • The right to consent to the appointment of commercial proxies.
70
The Supervisory Board
What are rights of the supervisory board towards the board of directors?

The supervisory board exercises ongoing supervision over the company’s activities (and consequently over the actions of the board of directors) in all areas. It has the right to audit the company’s assets and all documents, including the right to ask the board of directors for reports and explanations.

The supervisory board may not, however, give any binding instructions to the board of directors concerning the management of the company’s affairs and no such right may be given to the supervisory board in the articles of association or any other internal regulations of the company.

The list of powers of the supervisory board may be extended via the articles of association by including a requirement that the board of directors must obtain the supervisory board’s consent to perform certain actions, and/or a provision enabling the supervisory board to suspend board directors.

70
The Supervisory Board
Can a supervisory board member perform the duties of a board director?

Yes. A supervisory board member may be temporarily delegated to sit on the board of directors, but this possibility must be provided for in the articles of association.

70
The Supervisory Board
Can the supervisory board suspend a board director?

The supervisory board may suspend a board director for valid reasons if this power is provided for in the articles of association.

70
The Supervisory Board
Can the supervisory board adopt resolutions in writing or over the telephone?

Both. The supervisory board may adopt resolutions in writing or using means of direct remote communication (such as the telephone or teleconferencing software), if the articles of association provide for such a possibility. Resolutions may not be adopted through such means if they concern:

  • The election of the supervisory board chairman and vice-chairman;
  • The appointment of a board director; and
  • The removal and suspension of a board director and the supervisory board chairman or vice-chairman.
70
The Supervisory Board
Can a supervisory board resolution be appealed?

Yes, although there are no provisions regulating the procedure for appealing against supervisory board resolutions.

In practice:

Legal doctrine is unclear about how supervisory board resolutions may be appealed. According to one view, the relevant provisions of the Commercial Companies Code that regulate appeals against resolutions of the shareholders' meeting should be applied. According to another view, however, supervisory board resolutions should be appealed through a civil action whose purpose is to determine the existence of the resolution. CDZ tends to agree with the latter view, taking into account the position of the Supreme Court, as expressed in the ruling issued by its seven judges on 18 September 2013 (file ref. III CZP 13/13).

70
The Supervisory Board
Can a contract with a board director be signed exclusively by the supervisory board chairman?

Yes. Contracts with board directors may be signed by the supervisory board chairman if he/she is authorized to do so by the articles of association or a supervisory board resolution. However, it is the supervisory board, via its resolution, that makes the decision to sign the contract and defines the contract’s terms (with the exception of provisions governing the remuneration of board directors, which are determined by the body authorized to appoint directors to the board), unless the articles of association grant this power to the supervisory board.

70
The Supervisory Board
Can the supervisory board sign a contract with a board director if an attorney has been appointed by the shareholders' meeting for this purpose?

Yes. If there are no internal regulations on this matter, it should be assumed that the supervisory board is always authorized to sign a contract with a board director irrespective of whether the shareholders' meeting appoints an attorney to do so.

70
The Supervisory Board
What consequences does a board director face if the supervisory board is incomplete?

When a board director fails to convene a shareholders' meeting to appoint supervisory board members and thereby permits the company to remain, for a period longer than three months, without a complete supervisory board, contrary to law or the articles of association, he/she is at risk of a fine of up to PLN 20,000 imposed by the registry court.

70
The Supervisory Board
What requirements must be met for a supervisory board resolution to be valid?

The supervisory board may pass valid resolutions if at least half of its members participate in its meeting and all supervisory board members have been duly notified about the meeting.

71
Commercial Proxies
What is a commercial power of attorney?

A commercial power of attorney is a type of power of attorney granted to an individual by the company, which includes authorization to take court and out-of-court action in connection with the conduct of the company’s business.

71
Commercial Proxies
What is the procedure for appointing a commercial proxy in the company?

The appointment of a commercial proxy requires a resolution by all board directors (although the articles of association may set out other rules for the appointment of a commercial proxy). Additionally, the commercial register must be notified of the appointment of the commercial proxy.

In practice:

The notification to the registry court must specify the type of power of attorney being granted and, in the case of a joint commercial power of attorney, must also specify how the power will be exercised.

71
Commercial Proxies
Why is it a good idea to sign a contract specifying the commercial proxy’s duties?

The commercial power of attorney gives the commercial proxy the right to act on the company’s behalf but does not impose any duties on him/her. The contract can therefore set out the commercial proxy’s duties and the scope of the proxy’s liability for their non-performance or negligent performance.

71
Commercial Proxies
Can a commercial proxy lease real estate on the company’s behalf?

No. A commercial proxy cannot take any action resulting in the transfer of or an encumbrance of the company’s real estate, nor may he/she take any action to transfer the company’s business or lend its business for temporary use.

For the commercial proxy to be able to take such actions on the company’s behalf, a separate power of attorney must be granted to the commercial proxy by the company.

71
Commercial Proxies
Can a commercial proxy sign the company’s financial statements?

No. The company’s financial statements may be signed only by the board of directors (i.e. all directors serving on the date on which the financial statements are signed).

71
Commercial Proxies
Can a commercial proxy sign a list of shareholders or a statement certifying that contributions to the share capital have been paid?

No. The commercial proxy cannot take these actions in place of the board of directors.

71
Commercial Proxies
Can a commercial proxy be a board director or supervisory board member?

No. Any appointment of the commercial proxy to the board of directors or supervisory board is invalid. If a board director or supervisory board member is granted a commercial power of attorney, his/her mandate in the board of directors or supervisory board automatically expires.

71
Commercial Proxies
What is the scope of liability of a commercial proxy?

The company is liable for the commercial proxy’s actions towards third parties. The commercial proxy is liable to the company, on general principles of law and under regulations governing liability for acting beyond the scope of authorization or after the expiry of authorization, for any damage caused by his/her actions.

The contract with the commercial proxy that specifies his/her duties may alter the scope of his/her liability.

71
Commercial Proxies
What is the effective way to revoke a commercial power of attorney?

A commercial power of attorney may be revoked at any time by any of the board directors (although the articles of association may stipulate other terms for the revocation of a commercial power of attorney). The revocation must be filed with the commercial register.

71
Commercial Proxies
Can a commercial proxy terminate an employment contract executed by the company?

Yes. Execution and termination of employment contracts fits within the scope of “actions connected with the management of a business.”

71
Commercial Proxies
Can a commercial proxy convene a shareholders' meeting?

Unless the articles of association grant the commercial proxy the right to convene the shareholders' meetings, he/she may not convene such meetings.

72
Shares
Can certificates be issued to confirm that a shareholder holds shares in the company?

No. A board director who permits the company to issue certificates of shares or other securities or rights to profits in the company is subject to a fine of up to PLN 1,080,000, restriction of liberty or imprisonment for up to six months.

72
Shares
Can shares be sold or pledged before the company, or an increase in its share capital, is registered?

No. Shares can be sold or pledged only after the company, or the increase in its share capital, has been registered in the commercial register.

In practice:

There is a view that it is possible to sell existing shares before the registry court registers their increased value, but CDZ does not agree with it.

72
Shares
Can payments towards shares be made by shareholders at the Company’s cash desk?

Yes. Legal regulations do not provide for any limitations regarding how cash contributions are made. They may be paid by wire transfer to the company’s bank account or in cash to the company’s cash desk.

72
Shares
Is any additional agreement necessary for in-kind contributions to the company to be effective?

Yes. Although a resolution of the shareholders' meeting increasing the share capital and a statement that shares have been assumed provide the basis for a shareholder’s in-kind contributions, it is necessary for the company to sign an in-kind contribution agreement with the shareholder. Generally, it is sufficient for the agreement to be executed in ordinary written form (with certain exceptions: for example, if real estate is contributed, the agreement must be executed as a notary deed; if shares in another company are contributed, the agreement must be executed with the parties’ signatures notarized). The agreement must be executed and performed before notifying the commercial register of the share capital increase.

72
Shares
Must board directors audit the value of in-kind contributions?

No. Legal regulations do not provide for a formal obligation to audit in-kind contributions in this respect. However, it is recommended that, if there are any doubts, the board of directors should audit or have audited the value of contributions. The reasons include:

  • That it is necessary for board members to file a statement that contributions have been made to the company in full; and
  • That board directors are statutorily liable if they knowingly report in-kind contributions that are overinflated compared to their market value when notifying the registry court about the incorporation of the company or an increase in its share capital.
72
Shares
Can board directors be absolved from liability for accepting overinflated in-kind contributions to the company?

No. Neither board directors nor the shareholder can be absolved, under the articles of association or any other contract, from liability in such a case.

72
Shares
Can the company acquire its own shares?

No. The Company may not, as a rule, acquire its own shares, whether by their assumption (on their issue) or by their acquisition (on the market). The company is prohibited from accepting its own shares as a pledge. Exceptions to this rule include:

  • Acquisition of own shares by enforcement to satisfy the company’s claims (if such claims cannot be satisfied from the shareholder’s other property);
  • Acquisition of own shares for the purpose of redemption;
  • Acquisition of 10% of own shares to enable the shareholders of an acquired company to assume shares in the acquiring company (while merging companies); and
  • Acquisition of 10% of own shares by an acquiring or newly incorporated company while demerging a capital company.

If the company breaches the prohibition on acquiring its own shares, the board directors who permitted the acquisition will be subject to a fine of up to PLN 1,080,000, restriction of liberty or imprisonment for up to 6 months.

72
Shares
How can shares be redeemed?

Shares can be redeemed only when the articles of association so provide, e.g.

  • With a shareholder’s consent (voluntary redemption); or
  • Without such consent (compulsory redemption, but the conditions and procedures for compulsory redemption must be set out in the articles of association).

The redemption of a share generally involves payment of compensation to the shareholder for the redeemed share, but in the case of voluntary redemption the shareholder may consent to the procedure without compensation. To redeem a share, a resolution of the shareholders' meeting must be adopted. This does not apply in the case of any automatic redemption that occurs as a result of the occurrence of a specific circumstance provided for in the articles of association. The redemption of a share may also involve an obligation to reduce the company’s share capital, unless the share is redeemed from the company’s net profit.

72
Shares
Can shares with different rights be issued?

Yes. The articles of association may provide for an issue of shares with special rights. The preferential rights may include voting rights (a maximum of three votes per share), the right to dividends (which may not exceed one-and-a-half times the dividend on non-preference shares), or the right to participate in the distribution of the company’s assets if the company is liquidated.

72
Shares
Can a third party assume shares in the company’s share capital increased without an amendment to the articles of association?

No. If the company’s share capital is increased under the provisions of the articles of association (that is, without amending the articles of association), the new shares may be assumed by the existing shareholders only.

72
Shares
During an increase in the company’s share capital without an amendment to the articles of association, is it possible for a shareholder to assume shares in a proportion different than his/her existing share?

No. If the share capital is increased without an amendment to the articles of association, new shares may be assumed by shareholders only in proportion to their existing shares in the company’s share capital.

Case law:

The above has been clearly decided in the ruling of the seven judges of the Supreme Court of 17 January 2013 (file ref. III CZP 57/12).

72
Shares
What actions must be taken by a company to acquire shares in a different company?

In order to acquire shares in another company, the following must be done:

  • A due diligence of their legal status must be carried out;
  • A share purchase agreement must be executed with the notarized signatures of the buyer and seller;
  • The target company must be notified about the share acquisition and given a copy of the share purchase agreement, because the share transfer is not effective towards the company until the company is notified about the fact of its occurrence;
  • The target company must be notified if there is a change in its control following the share acquisition;
  • The buyer must ensure that the company’s board of directors registers the buyer in the share register, notifies the registry court about the change of shareholders and submits a new list of shareholders.
72
Shares
Is it advisable to carry out a legal due diligence of the shares before their acquisition? What should the due diligence process involve?

Yes. The objective of such a process is primarily to verify the seller’s legal title to the shares and any encumbrances of the shares. The due diligence examination should cover the following documents and information (among others):

  • The articles of association with all amendments;
  • Any resolution increasing the share capital, any statement that the newly issued shares have been assumed and evidence that cash or in-kind contributions have been made;
  • Any contract of the purchase or encumbrance of shares after the incorporation of the company;
  • The entries in the share register;
  • The resolutions of the company’s governing bodies with the right to consent to the transfer of the company’s shares (if their consent was or is required under the articles of association);
  • Any statements by the other shareholders on the waiver of rights granted in the articles of association, such as the preemption right, tag-along or drag-along rights;
  • Any entries in the commercial register; and
  • Certificates from the register of pledges or tax liens.

The process should establish whether:

  • The company has been duly incorporated;
  • The shares have been duly issued and assumed;
  • Cash or in-kind contributions towards the shares have been paid or made in full;
  • The seller has legal title to the shares (to check if the seller and his/her predecessors acquired the shares from their previous holders effectively);
  • The shares are not encumbered with any third party rights or claims;
  • The shares have been approved by the company’s governing bodies and cleared by public authorities, e.g. the Ministry of Internal Affairs or the Competition and Consumer Protection Office.
72
Shares
Can a shareholder’s spouse prevent the sale of the shareholder’s shares in the company?

Yes. In a situation where spouses have common property, the shareholder’s spouse may object to the sale of shares in the company. The objection may be expressed in any form, even orally, and is effective towards a third party if the third party was able to learn of it before the purchase of shares.

72
Shares
Must a shareholder’s statement on assuming new shares in the company always be executed in a notary’s presence?

Yes, except for situations when a share capital increase occurs under existing provisions of the articles of association that provide for a maximum amount and date of such an increase.

72
Shares
Who exercises voting rights attached to shares if a usufruct or pledge are established on them?

The possibility that a person other than a shareholder exercises voting rights attached to shares may be introduced in the articles of association only. Unless the articles of association provide for such a possibility, voting rights to pledged shares may be exercised by their holder (the pledger).

In practice:

When the articles of association do not permit a pledgee to exercise voting rights attached to shares, the pledgee may be granted a power of attorney to exercise voting rights on behalf of the holder (pledger). The authorization to do so may result from a pledge contract or a separate document.

73
Heirs of a Shareholder
Can several heirs individually exercise voting rights in the company?

No. The heirs of a deceased shareholder may exercise their rights in the company exclusively through a common representative until the estate is distributed. Any of the heirs or a third party chosen by all the heirs may act as such a representative.

73
Heirs of a Shareholder
What documents must be presented by a shareholder’s heir to be entered into the share register?

The shareholder’s heir must notify the company of his/her acquisition of the company’s shares through succession.

Along with this notification, the heir must deliver to the company proof of succession, such as a copy of the ruling confirming the acquisition of the deceased person’s estate or a registered deed certifying succession executed by a notary, or their equivalents issued in accordance with the law of the decedent’s jurisdiction.

73
Heirs of a Shareholder
When can a shareholder’s heir participate in the shareholders' meeting?

The shareholder’s heir may participate in the shareholders' meeting from the moment the company is effectively notified about the acquisition (by succession) of the shares of the deceased shareholder. If there are several heirs, then, until the estate is distributed, a representative chosen by them may attend the shareholders' meeting on their behalf.

73
Heirs of a Shareholder
Can a minor heir exercise his/her rights individually?

No. Minor heirs may exercise their rights in the company only through their statutory guardians (e.g. parents). In the case of actions beyond the ordinary management of the minor’s property, the minor’s legal representative must have the prior approval of the appropriate guardianship court. If the minor heir has no legal representative, he/she may exercise his/her corporate rights arising from the inherited shares through the legal representative appointed by the appropriate guardianship court.

73
Heirs of a Shareholder
Can the heir’s right to join the company in place of the deceased shareholder be limited?

Yes. The articles of association may limit or exclude the possibility of heirs joining the company, in which case the articles of association must set out the terms of compensating the heirs; otherwise, the limitation or exclusion will be ineffective.

74
Branch of a Foreign Company
What is better: a company or a branch of a foreign company?

It is better for a foreign company to set up a company to carry on business in Poland. The costs, formalities and time necessary to set up a branch of a foreign company are similar to those of setting up a company. However, the branch may not, individually and in its own name, give any offers, enter into contracts, or pursue its claims in court. The statutory limitation that the branch may carry on its business only within the scope of activity of the foreign company limits the ability of the branch to function effectively on the Polish market. In addition, the foreign company is liable with its all assets for the liabilities of the branch.

74
Branch of a Foreign Company
What is the procedure for opening a branch of a foreign company in Poland?

The board of directors of the foreign company must adopt a resolution identifying the assets intended for the branch office, its location in Poland, and at least one person authorized to act in the branch on behalf of the foreign company. To start its operation, the branch must be also registered in the commercial register and, therefore, the documents required in the registration proceedings must be submitted to the registry court.

74
Branch of a Foreign Company
What documents authorize the foreign company’s representative in the branch to act?

The representative can act after his/her name is entered in the commercial register. To become registered, a document appointing the representative (such as a resolution of the board of directors of the foreign company or a statement on his/her appointment and a power of attorney setting out the scope of the representative’s authority) must be submitted to the registry court. In addition, proof of his/her acceptance of the appointment and his/her address in Poland must be provided.

In the event when a foreign company intends to limit or extend the statutory powers of the representative in the branch, the representative may be granted a separate power of attorney authorizing him/her to take the specified actions on behalf of the foreign company.

74
Branch of a Foreign Company
Must the foreign company’s representative in the branch be a Polish citizen?

No. The person representing the foreign company in the branch does not have to meet any particular requirements, so he/she does not have to be a Polish citizen or speak Polish.

74
Branch of a Foreign Company
Must the foreign company’s representative in the branch permanently stay in Poland?

No. Such a person does not have to stay permanently in Poland, but must have a permanent address in Poland. The address must be provided to the commercial register.

74
Branch of a Foreign Company
How many persons may be appointed the foreign company’s representatives in the branch?

Legal regulations do not provide for any limitation on the number of appointed representatives of the foreign company in the branch.

74
Branch of a Foreign Company
Must a change in the composition of the foreign company’s board of directors be communicated to the registry court?

Yes. The law provides for a duty to disclose the names of board directors and the signing rules in the commercial register.

74
Branch of a Foreign Company
How can the branch’s activity differ from that of the foreign company?

The branch may carry on its business only within the scope of activity of the foreign company. Thus, the business activity of the branch may be identical to the activity of the foreign company or specialized in a subset of the activities of the foreign company. The branch may not, however, carry out business that goes beyond the scope of activity of the foreign company.

74
Branch of a Foreign Company
Who is liable for the obligations of a branch?

The foreign company is liable with all of its assets for the branch’s obligations. It is irrelevant that the branch’s assets were spun off from the foreign company’s assets or that the branch keeps separate accounts.

74
Branch of a Foreign Company
Who must sign the financial statements of a branch?

Financial statements must be signed by the person who keeps the branch’s accounts and the person managing the branch (the representative of the foreign company in the branch). If more than one representative has been appointed, the financial statements must be signed by all persons who hold this function and whose names are disclosed in the commercial register.

Subsequently, the financial statements must be approved by the board of directors of the foreign company and filed with the registry court on-line using a qualified electronic signature or a signature confirmed by an ePUAP secure profile of at least one natural person whose PESEL number is disclosed in the commercial register and who is registered as a board director of the foreign entrepreneur.

74
Branch of a Foreign Company
May a branch enter into contracts in its own name?

No. The branch of a foreign company may not enter into civil law contracts in its own name: such contracts must be signed by the foreign company. A correct designation of the foreign company as a party to a contract must include the foreign company’s name and a notice that it conducts its operations in Poland through the branch (i.e. it must include the branch’s registration data and name). An exception to this rule is that the branch may enter into employment contracts independently, if the foreign company authorizes the branch to do so.

74
Branch of a Foreign Company
Can a branch office of a foreign entrepreneur sue or be sued?

Generally, no. Branch offices of foreign entrepreneurs, except cases expressly indicated in legal regulations (e.g. as regards insurance or labor law), do not have the capacity to litigate. This means that a branch office may not act as an independent party to a lawsuit. It should always be the foreign entrepreneur who sues or is sued.

In practice:

In order to prove that a dispute concerns activities performed by the branch office, it is advisable to specify in the introductory part of a contract that the entrepreneur operates in Poland through its branch office, and to provide the branch’s name and the KRS number. This may be of key significance in establishing the international and territorial jurisdictions of Polish courts.

74
Branch of a Foreign Company
What is the procedure for liquidating a branch of a foreign company in Poland (in EU and EEA)?

To liquidate a branch of a foreign company in Poland, it is sufficient to adopt a resolution of the board of directors of the foreign company concerning its liquidation and file a relevant application with the registry court.

75
Other Issues
What documents confirm the shareholder’s status in the company, given the prohibition on issuing share certificates?

The shareholder’s status in the company is confirmed by the following documents (examples):

  • A share purchase agreement, or a resolution to increase the company’s share capital plus a shareholder’s statement certifying that he/she/it has assumed the newly issued shares;
  • The company’s share register, signed by the board of directors;
  • The list of shareholders, signed by the board of directors;
  • An excerpt of the commercial register (for shareholders holding at least 10% of the shares in the company’s share capital).
75
Other Issues
Can a shareholder set off his/her claims against the company with the company’s claim against him/her related to a payment due towards shares?

No, if the set-off were to be made on the basis of a unilateral statement by the shareholder to the company. However, if the company and its shareholder enter into a set-off contract, such a contractual set-off is permitted.

75
Other Issues
What rights does a shareholder have under the right to individual supervision of the company?

The right to supervise includes the following three rights:

  • The right to view the company’s books and documents at its registered office;
  • The right to draw up a balance sheet for his/her own use; and
  • The right to request explanations from the board of directors.

This right may be exercised by the shareholder, or by a person authorized by the shareholder (e.g. an auditor).

In practice:

The shareholder may not grant a power of attorney to exercise the above rights to a third party.

75
Other Issues
When can a shareholder’s individual supervision of the company be excluded or limited?

The shareholder’s right of individual supervision of the company may be excluded or limited only when the articles of association so provide and a supervisory board (or audit committee) has been established in the company.

75
Other Issues
What are the rights of a shareholder when the board of directors refuses to enable him/her to exercise individual supervision of the company?

In such a situation the shareholder may:

  • Request that the issue be resolved by a shareholders’ resolution that must be adopted within one month of the date of the request;

if such a resolution is not adopted, the shareholder may:

  • File an application with the registry court to obligate the board of directors to provide explanations or grant access to the company’s documents or books; such an application must be filed within seven days of the date of receipt of a notice about the company’s refusal to pass the resolution, or the lapse of the one-month compliance period without effect.
75
Other Issues
When does an amendment to the articles of association become binding?

An amendment to the articles of association becomes binding from the day of its entry into the commercial register. The process of amendment involves the shareholders’ meeting passing a resolution approving the amendment. For the amendment to become binding, the registry court must register the resolution.

75
Other Issues
When does the company’s address change?

The company’s address changes on the day the board of directors adopts a resolution approving the change in address, or at any other time specified in such a resolution. Although it is mandatory to submit an application for registration of the change of address in the commercial register, the registration does not determine the time of the change.

75
Other Issues
When is a curator appointed in the company?

A curator is appointed in the company in the following cases:

  • When the company is unable to manage its affairs because there are no governing bodies appointed to do so;
  • When it is necessary to take immediate court action in civil proceedings and the company has no governing body that could represent it;
  • When the company is registered in the commercial register but, despite fines imposed on it, the company does not meet its registration obligations (i.e. does not submit to the registry court an application for the registration or the documents that have to be submitted).
75
Other Issues
Can a company freely change its name?

Generally, yes. The new name must be sufficiently distinguishable from the names of other companies operating on the same market. An examination in this respect is carried out by the registry court ex officio during proceedings to register a change in the company’s name in the commercial register. To avoid unnecessary cost, it is better for the company to carry out the examination on its own before amending the articles of association.

A company’s name is changed by amending its articles of association in the form of a notary deed.

141
Online company formation
Can I incorporate a limited liability company on-line on my own?

Yes, but all shareholders and board directors must have a secure profile ePUAP or a qualified e-signature. It is important to note that the articles of association of such company do not secure shareholders’ interests.

141
Online company formation
What is necessary to register a limited liability company on-line?

First, a secure profile ePUAP or a qualified e-signature must be obtained by all shareholders and board directors, and an account in the Justice Ministry’s ITC system must be set up. Next, application forms must be completed, the court fee paid and the application filed with the National Court Register via the Justice Ministry’s ITC system.

If the company is registered on-line using the secure profile ePUAP, in addition a statement on the company’s status as a foreigner/non-foreigner and information on addresses for service of process of board directors and entities entitled to appoint the company’s board of directors must be filed in hard copy with the National Court Register.

141
Online company formation
When registering a limited liability company on-line, may shares in the share capital be assumed in exchange for in-kind contributions (e.g. a car or know-how)?

No, contributions must be made in cash only.

141
Online company formation
How long does it take to register a limited liability company on-line?

According to statutory regulations the registration should take 24 hours from sending the application using the Justice Ministry’s ITC system but in practice it takes approximately five business days.

141
Online company formation
Do the articles of association of a company incorporated on-line secure shareholders’ interests?

No, the articles of association of a company incorporated on-line do not secure shareholders’ interests. If there are to be at least two shareholders in the company, once it is registered on-line they should amend the articles of association or execute a shareholders’ agreement to provide for ways out of the deadlock when adopting key resolutions, settlements between shareholders if one or more of them exit the company, and to secure the company against the competition of the leaving shareholders, etc.

141
Online company formation
What is the difference between on-line registration and a traditional way of incorporating of a limited liability company (before a notary and by filing a hardcopy application with the National Court Register)?

The main differences are that the traditional incorporation involves higher costs (such as a notary fee of PLN 360 and a court fee of PLN 500 instead of just the court fee of PLN 350), longer time (3 to 6 weeks) and more formalities (e.g. all shareholders have to visit a notary). An advantage of the traditional incorporation is that articles of association that secure shareholders’ interests may be executed upon the company’s incorporation.

The articles of association of an on-line company must be later adjusted to the shareholders’ requirements before a notary upon its registration and an application must be filed with the National Court Register to register the amendment of the articles of association.

TEMPLATES

Appointment, Suspension and Removal Of Directors
Appointment, Suspension and Removal Of Directors
Appointment, Suspension and Removal Of Directors
Appointment, Suspension and Removal Of Directors
Appointment, Suspension and Removal Of Directors
Appointment, Suspension and Removal Of Directors
Appointment, Suspension and Removal Of Directors
Appointment, Suspension and Removal Of Directors
Duties of Board Directors
Duties of Board Directors
Representation of the Company
The End of the Company’s Financial Year
The End of the Company’s Financial Year
The End of the Company’s Financial Year
The Shareholders' Meeting
The Shareholders' Meeting
The Shareholders' Meeting
The Supervisory Board

CDZ Legal Advisors owns and maintains CDZ LEGAL CARE

Information or templates contained in CDZ Legal Care do not constitute legal advice.
CDZ Legal Advisors is not responsible for the consequences of using this site without prior analysis of a specific case.

PRIVACY POLICY

CHAJEC, DON-SIEMION I PARTNERZY sp. k. z siedzibą w Warszawie
Sąd Rejestrowy: Sąd Rejonowy dla m. st. Warszawy w Warszawie, XII Wydział Gospodarczy Krajowego Rejestru Sądowego
KRS: 0000184058, NIP: 526-27-40-114