- Business in Poland -

Simple joint-stock company

Introduction to the simple joint-stock company (PSA)

The simple joint-stock company (PSA, Prosta Spółka Akcyjna) is a distinct type of capital company introduced into the Polish Commercial Companies Code to provide a flexible, modern legal instrument designed primarily for ventures with a high level of innovation, particularly within the start-up sector. This model combines elements of a limited liability company (sp. z o.o.) and a traditional joint-stock company (S.A.), creating a hybrid structure suited to the needs of dynamic business participants.

Unique structural features of the PSA compared to traditional companies

In terms of its structure, the PSA differs from traditional models by breaking the direct link between the value of a shareholder's contribution and their corporate rights. Shareholders may acquire shares not only through cash or in-kind contributions but also by providing non-transferable non-cash contributions, such as work or services. PSA shares do not have a nominal value, are not part of the share capital, and cannot be traded on the stock exchange; they are limited to private trading. The shareholder register is maintained by an authorized entity, and the law explicitly allows the use of distributed ledger technology (blockchain) for this purpose, which is a novelty in Polish corporate law.

Flexible share capital and simplified formation process of the PSA

The PSA's share capital is symbolic, with a minimum requirement set at 1 PLN. Contributions above this amount can be made within three years from the company's registration, meaning they are not a condition for the company's formation. The formation procedure is simplified, requiring only the conclusion of the articles of association (either in notarial form or through a standard template) and the registration in the National Court Register (KRS), which grants the PSA legal personality.

Governance models and duties in a simple joint-stock company

The governance model of a PSA can follow either the traditional dualist system (with a management board and, optionally, a supervisory board) or a monist system (a board of directors that combines both managerial and supervisory functions). The law imposes uniform duties on members of the company’s governing bodies, including loyalty to the company, acting with due professional care, and disclosing conflicts of interest. There is also a prohibition on engaging in competitive activities and an obligation to maintain confidentiality. Liability for members of the governing bodies is based on the presumption of fault, meaning the burden of proving lack of fault rests with the defendant. Additionally, the concept of the business judgment rule has been codified, providing a basis for excluding liability when actions are taken within the scope of reasonable business risk.

Privileged shares and shareholder rights in the PSA

PSA shares may be privileged in a wide range of ways, including in terms of voting rights, dividend rights, and participation in the company’s liquidation proceeds. The law explicitly allows for the creation of founders' shares, which guarantee a fixed proportion of votes, and non-voting shares, which are not entitled to vote but may be privileged in terms of dividend rights. The creation of pre-emption rights or subscription rights for new share issues is also permitted.

Dissolution and liquidation procedures specific to the PSA

Regarding the dissolution of a PSA, the general rule is liquidation, but as an exception, it is possible for a designated shareholder to acquire the company’s assets by a resolution of the general meeting, subject to the approval of the registration court. This option, unavailable in other types of capital companies, aims to simplify the liquidation process while ensuring the protection of creditors and other shareholders. In such a case, the acquiring shareholder assumes full, personal, and unlimited liability for the company’s obligations.

Conclusion: The PSA as a modern legal instrument for innovative ventures

In conclusion, the PSA represents a conscious effort by the legislator to address the needs of a modern economy based on knowledge, technology, and flexibility. It is a capital structure that allows for the optimal adjustment of governance and investment mechanisms to the specific needs of a given venture, while maintaining institutional safeguards to ensure the security of business transactions.