Bartłomiej Wyjatek of the Corporate Law practice group at Wardyński & Partners explains how the court register protects the interests of participants in commercial transactions.
The commercial register maintained by Polish courts (under the National Court Register Act dated 20 August 1997) is a basic source where companies who are doing business together can obtain information about one another. The purpose behind creating the register included smoothing the way for commercial transactions by publishing reliable information about the participants. Generally speaking, the register fulfils this role. Much does depend on the discipline of the companies entered in the register, however, who are required to file motions to enter new information if there is a change in the information disclosed in the register. Nonetheless, anticipating that companies might fail to take the required steps to keep the information current, the law reinforces the reliance on the information published in the register by introducing certain mechanisms to protect persons who use the information found there.
How may the court register protect the interests of participants in commercial transactions?
Firstly, the register is generally open and public. Any person has the right to review the information set forth in the register, without demonstrating a legal interest, to review the register file of entities listed in the register (although in this respect there are certain important exclusions, for example concerning the register of insolvent debtors), and to receive an official copy, transcript, or certificate of information from the register.
Secondly, the act includes rules designed to motivate businesses to keep up-to-date the information that should be disclosed in the register. For example, when a company is required to file a motion for entry in the register, it may not rely on information that is not entered in the register, or was deleted from the register, against a third party acting in good faith. An obvious example would be where a third party in good faith enters into a contract with a company which is represented by a former management board member, who has in fact been dismissed from the board but is still entered in the register because the company neglected to update the entry. A person in good faith is someone who is not aware of the information that is not disclosed in the register. It should be borne in mind in this respect that good faith is covered by a presumption under Polish civil law, which essentially means that good faith does not have to be proved.
Thirdly, there is a presumption that information entered in the register is correct. If for some reason the information in the register is not consistent with the true state of facts, the entity in question which failed to file a prompt motion to correct the information cannot assert against a third party that the information is incorrect.
An entity entered in the register is liable for loss caused by submission of incorrect information to the register, or for failure to submit the required information by the statutory deadline (most often 7 days from the event that justifies making the entry, but there are some significant exceptions).
It should also be recognised that the protection afforded to third parties is not absolute. First and foremost, as mentioned, protection extends only to third parties acting in good faith, and this presumption may be overcome by offering counterproof. Moreover, from the date of publication of an entry in the official journal Monitor Sądowy i Gospodarczy, no one may claim that they are not aware of the entries submitted to the register. However, with respect to actions taken less than 16 days after the publication date, an entity listed in the register cannot assert the entry against a third party if the third party proves that it could not have known about the substance of the entry.
Parties should make use of the information available in the National Court Register. It is nonetheless important to exercise caution and remember, for example, that information that appears in a transcript from the register may not be current, and the law does not allow other parties to rely on such information in every situation.