Some of the provisions amending the Commercial Companies Code and other acts went into force on 15 January 2015, mainly concerning establishing and operation of a business in the form of a registered partnership, a limited partnership or a limited-liability company.
The amendment is designed to achieve the goal identified long ago of gradually making life easier for businesses, particularly by enabling many corporate registration matters to be conducted online.
Online establishment and conduct of the affairs of registered partnership, limited partnership and limited-liability company
Since 2012 the Polish Commercial Companies Code has provided for the possibility of registering a limited-liability company (sp. z o.o.) via internet, under the procedure known as S24 (short for “24-hour company”). Continuing this trend, from 15 January 2015 entrepreneurs are now permitted to establish a registered partnership (s.j.) or limited partnership (sp. k.) using the IT system operated by the Ministry of Justice and patterns for the partnership agreement available on the system. Such applications are generally supposed to be considered within one day. The time when the partnership agreement is deemed to be concluded is the time the form agreement is completed with all necessary data concerning the partnership and signed. As in the case of a limited-liability company established under the S24 procedure, initial contributions to such partnerships may be made only in cash.
Partnership agreements and articles of association of firms established online can also be amended or dissolved using online forms. Moreover, the amendment provides for the possibility of online adoption of typical corporate resolutions in such firms.
The new rules also make it easier to transfer shares (in a limited-liability company) or the totality of the rights and obligations (in partnerships) formed using the S24 procedure, by conducting such transactions in electronic form. Then the agreement transferring shares in the company and the new list of shareholders will be prepared on the basis of the electronic form. This will eliminate the requirement for notarisation of the signatures on the share sale agreement.
From 15 January 2015, firms registered online may also immediately appoint a commercial proxy under the same procedure. But it should be borne in mind that this applies only to newly formed firms. Those that are already listed in the Commercial Register will not be able do this online until 1 April 2016.
Under the amendment, the online form may also be confirmed using a trusted profile on the Electronic Platform of Public Administration Services (ePUAP). Previously the only permitted form of authorisation was an electronic signature verified with a qualified certificate.
These changes cannot be used by registered partnerships established through conversion of an ordinary partnership (s.c.) into a registered partnership. In that case the traditional procedure must be followed.
No obligation to submit sample signatures, requirement to file addresses
With respect to firms established in the traditional method, the amendment eliminates the obligation to enclose sample signatures with applications for entry or change of the persons authorised to represent the entity or a commercial proxy (confirmed before a notary or a judge or authorised court employee).
Instead of certified sample signatures, an application to enter persons representing an entity registered in KRS, liquidators or commercial proxies must enclose the person’s consent to the appointment, unless:
- The application for entry is signed by the person being entered or that person has granted a power of attorney to sign the application, or
- Consent is expressed in the record of the session of the authority appointing the person or in the articles of association.
Moreover, under the new wording of Commercial Companies Code Art. 167 §3, addresses of the members of the management board must be enclosed with the application to register the company or to enter changes in the members of the management board, as well as whenever there is a change of address. Until the change of address is submitted, items will be served on the management board member at the previous address.
Reduction in fees for KRS entries
To encourage entrepreneurs to establish firms using the online forms, the court fees for KRS entries have been reduced. The initial entry using the online system now costs PLN 250 (as compared to PLN 500 by the traditional method), and PLN 200 for amendments (PLN 250 by the traditional method).
New reporting obligations for firms
Under the amendment, the Commercial Register will also include:
- A notation on the lack of an obligation to prepare and file financial reports, and
- Information on the end date of the financial year.
In connection with this, the amendment introduces a requirement to file declarations on the lack of an obligation to prepare and file annual financial reports by registered partnerships of natural persons or professional partnerships (sp. p.) which are not subject to the Accounting Act of 29 September 1994 (i.e., as a rule, those whose revenue from the sale of goods and services and financial operations for the prior financial year did not exceed the Polish equivalent of EUR 1,200,000).
With respect to information on the end date of the financial year, this notation must be filed with the initial application for entry in the register. Entities already registered as of 15 January 2015 are required to provide this information with their first application for entry of a notation on filing of a financial report after that date (no fee for entry of this notation).
Effects of amendment
The amendment is primarily intended to reduce red tape and expedite procedures. The new solutions should generate measurable financial benefits for entrepreneurs using the internet to establish and conduct operations in the form of companies and partnerships. Apart from the savings from the reduction in fees for entries in the Commercial Register, another financial benefit may be the elimination in certain instances of the need for participation of a notary in establishing or dissolving a firm or in amending its articles of association or partnership agreement. The changes concerning financial reports should help the registry courts enforce obligations to file financial reports.
The amendment provides for two different dates for entry into force of the new rules. Generally the act entered into effect on 15 January 2015, but some of the regulations will apply from 1 April 2016. The dates of entry into force of selected changes are presented in the chart below. These rules are also tied to the schedule for launch of the relevant functionalities in the KRS IT system.
Łukasz Gembiś, Mergers & Acquisitions Practice, Wardyński & Partners