- Business in Poland -
Joint-stock company
What is a joint-stock company under Polish law?
A joint-stock company constitutes the most formalized organizational and legal form of conducting business activity under the Polish legal system. It is a capital company with legal personality, whose essence lies in the separation of personal elements from the ownership structure and an emphasis on mechanisms for financing large-scale ventures. This structure, shaped by the provisions of the Polish Commercial Companies Code, is characterized by a high degree of regulation and limited contractual freedom for its founders.
How to establish a joint-stock company in Poland
A joint-stock company may be established by way of incorporation, transformation of an existing entity, or through merger or division. A company may be founded by a single founder – either a natural person or a legal person. For a joint-stock company to be validly formed, the following steps are required: execution of the company’s articles of association (statute) in the form of a notarial deed, contribution of the share capital, appointment of the management board and the supervisory board, and entry into the Register of Entrepreneurs of the National Court Register (KRS).
Legal status of a joint-stock company in organization
Upon execution of the statute by the founders, a joint-stock company in organization is formed. Until it is entered into the KRS, this entity possesses limited legal capacity and may act in its own name – it may acquire rights, incur liabilities, sue and be sued. The corporate name of such a company must include the designation "in organization" ("w organizacji").
Minimum share capital and shareholder rights
The share capital constitutes the financial foundation of the company’s operations and must amount to no less than PLN 100,000. It is divided into shares of equal nominal value, with the minimum nominal value of a share being PLN 0.01. The share capital broadly reflects the anticipated scale of the company’s operations. Shares, which now exist in dematerialized form (as entries in a shareholder register or on a securities account), confer a bundle of rights and obligations upon the shareholder. The principal obligation of a shareholder is to provide a monetary or in-kind contribution for the subscribed shares. Fundamental shareholder rights include the right to vote at the general meeting, the right to dividend, the right to participate in the liquidation surplus, and the right to information concerning company affairs.
Corporate governance structure of a joint-stock company
A joint-stock company operates through its corporate bodies, which are the management board, the supervisory board, and the general meeting of shareholders.
Powers and responsibilities of the management board
The management board is responsible for the day-to-day management of the company and represents it externally. As a general rule, all matters not reserved to the general meeting or the supervisory board fall within the powers of the management board. The general meeting may not issue binding instructions to the management board regarding the conduct of the company’s affairs. The board may be composed of one or more persons, who may be either shareholders or third parties. In principle, the members of the management board are appointed and removed by the supervisory board, unless the statute provides otherwise. A management board member is authorized to represent the company in all court and out-of-court matters, and any limitations on this authority are ineffective vis-à-vis third parties. In the case of a multi-member board, the rules of representation are set forth in the statute; in the absence of such provisions, joint action by two board members or by one member acting together with a commercial proxy (prokurent) is required. The term of office of a board member may not exceed five years, but reappointment is permissible.
Role and composition of the supervisory board
In contrast to a limited liability company (sp. z o.o.), where supervisory functions may be entrusted to the shareholders or, optionally, to a supervisory board or audit committee, in a joint-stock company the supervisory board is mandatory and acts as a permanent supervisory body. It exercises continuous oversight over all areas of the company’s operations. The statute may expand the powers of the supervisory board, for instance by requiring its prior consent for certain actions of the management board. The supervisory board’s specific duties include the review of financial statements. The board acts collegially, though it may delegate individual members to perform specific supervisory tasks. The term of a supervisory board member may not exceed five years. The board must consist of at least three members, and in public companies, at least five. As a rule, members are appointed and removed by the general meeting. The board may adopt resolutions provided that at least half of its members are present, assuming they were properly notified of the meeting.
General meeting of shareholders: powers and procedures
The general meeting of shareholders is the supreme governing body of the company, whose principal function is to adopt strategic resolutions. Shareholders attending the meeting exercise their voting rights and may meaningfully influence the company’s direction. The powers of the general meeting include, among others, the approval of financial statements, decisions regarding changes in the composition of corporate bodies, and resolutions increasing benefits to shareholders. The meeting is convened in accordance with the Commercial Companies Code and the adopted agenda. There are two types of general meetings: ordinary meetings, held within six months after the end of the financial year, and extraordinary meetings, convened in cases specified by statute, the articles, or at the initiative of authorized bodies or shareholders. The general meeting is usually convened by the management board; the supervisory board may convene it only when the management board fails to do so. In certain circumstances, shareholders representing at least half of the share capital or votes may also convene a meeting. Meetings are convened by public notice. Resolutions are adopted by voting and constitute internal corporate acts. As a rule, resolutions are passed by a simple majority of votes, regardless of the number of shareholders present, unless the law requires a qualified majority.
Need a help?
Contact me: Attorney Joanna Chmielińska, Partner/Head of Business Law Department
E-mail: j.chmielinska@kkz.com.pl
