Polish Joint-Stock Company: A Practical Guide

A joint-stock company is a business form intended primarily for larger enterprises with substantial investment-capital needs. Below are the key steps, from formation, capital requirements and governing bodies to registration in the National Court Register (KRS) and liquidation. We discuss the advantages and disadvantages of a joint-stock company in a separate article.

Who can form a joint-stock company

One person or several people may form a joint-stock company. The founders may be individuals, legal entities or organizational units without legal personality that have legal capacity.

The sole restriction: a joint-stock company cannot be formed exclusively by a single-member limited liability company.

Four steps to form a joint-stock company

To form a joint-stock company, take these four basic steps:

Form the company by executing the deed of formation and articles.
Make contributions to cover the share capital.
Appoint the Management Board and Supervisory Board.
Register the company in the KRS register of entrepreneurs.

Step 1: Forming the joint-stock company

Deed of formation

Forming a joint-stock company means entering into and signing a founding agreement, known as the deed of formation. In it, the shareholders undertake to pursue a common purpose by making contributions and cooperating.

The deed of formation must be executed as a notarial deed:

One counterpart when the only shareholders are the company’s founders.
More than one counterpart when there will be more shareholders than founders or additional actions are needed to form the company, for example, a non-cash contribution.

Company articles

The articles are the central part of the deed of formation. They set out, among other things, the company’s organization and shareholders’ rights attached to shares. They bind all shareholders, including those who later acquire shares without agreeing to the wording of the articles.

Mandatory contents of the articles:

the company name and registered office;
the company’s business activities;
the company’s duration, if specified;
the amount of share capital;
the nominal value and number of shares, including whether they are registered or bearer shares;
the names and surnames or company names of the founders;
the number of Management Board and Supervisory Board members, or their minimum and maximum numbers.

Additional provisions, which are ineffective against the company if omitted:

the number and types of rights to participate in profits or in the distribution of company assets, and the rights attached to them;
obligations to provide services to the company beyond paying for shares;
the terms and procedure for redeeming shares;
restrictions on transferring registered shares;
personal rights granted to shareholders;
an approximate amount of all costs incurred or charged to the company in connection with its formation.

Joint-stock company in organization

Once all shares have been taken up, but before the company is entered in the KRS, a joint-stock company in organization comes into existence. It:

has legal capacity and the capacity to perform legal acts;
may acquire rights, incur obligations, sue and be sued in its own name;
is represented by the Management Board or, until one is appointed, by all founders;
has its own assets, separate from those of its shareholders.

Shareholders may make cash or non-cash contributions (contributions in kind).

Minimum capital thresholds:

Share capital: at least PLN 100,000.
Nominal value of each share: at least PLN 0.01.

Paying up capital before and after registration:

Shares taken up for cash contributions must be paid up before registration to at least 25% of their nominal value.
Shares taken up for non-cash contributions must be fully paid up no later than one year after registration.
For shares taken up for a mix of cash and non-cash contributions, at least 25% of the share capital must be paid up.
If shares are taken up above nominal value, the premium must be paid in full before registration.

Step 3: Appointing the Management Board and Supervisory Board

Management Board

The Management Board runs the company’s day-to-day business and represents it externally. It makes business and operational decisions, calls general meetings and represents the company before courts.

Representation means performing and receiving legal acts on the company’s behalf in dealings with third parties. As a rule, each Management Board member may represent the company, but a receiver, guardian, attorney-in-fact or commercial proxy may also do so.

Appointment and composition:

The Supervisory Board appoints and dismisses Management Board members unless the articles provide otherwise.
The Management Board may consist of one or several members.
A member may be selected from among the shareholders or from outside their group.
A Management Board member must be a natural person with full capacity to perform legal acts.
A Management Board member’s term of office may not exceed 5 years.

Supervisory Board

The Supervisory Board oversees the company’s activities. It has at least 3 members, appointed and dismissed by the general meeting unless the articles provide otherwise. A Supervisory Board member’s term of office may not exceed 5 years.

Key powers of the Supervisory Board include adopting resolutions on:

reviewing and approving the Management Board’s report on the company’s activities;
granting discharge to members of the company’s governing bodies;
acquiring or disposing of real estate, perpetual usufruct or an interest in real estate;
whether the company should continue to exist;
amending the company’s articles.

General meeting of shareholders

The general meeting is another governing body of a joint-stock company. Attending it is a shareholder’s right, not an obligation. It is held at the company’s registered office unless the articles provide otherwise. Decisions are made by resolutions.

The following are entitled to attend the general meeting:

holders of registered shares and temporary certificates;
pledgees and usufructuaries of shares who have voting rights;
holders of bearer shares.

Key powers of the general meeting include:

appointing and dismissing Supervisory Board members;
removing or suspending a Management Board member;
setting the remuneration of Management Board members;
amending the company’s articles;
deciding on an increase or reduction of share capital;
deciding to change the company’s business activities or merge it with another company.

Types of general meeting

Ordinary: should be held within 6 months after the end of each financial year. Its agenda may include reviewing and approving the Management Board’s report, approving the previous year’s financial statements, resolving to distribute profit or cover a loss, and granting discharge to members of the company’s governing bodies.
Extraordinary: called in cases specified by law or the company’s articles.

How the Management Board calls a general meeting

The Management Board calls a general meeting in one of three ways:

Announcement in the Court and Commercial Gazette (MSiG), at least 3 weeks before the meeting. The announcement states the date, time, place and detailed agenda. If the articles are to be amended, it also gives the existing provisions and proposed amendments.
Registered letter or courier, sent at least 2 weeks before the meeting.
Email, sent to the address in the shareholders’ register, or to another specified email address if the shareholder has given written consent.

If the meeting was properly called, it is valid regardless of the number of shares represented, unless the articles provide otherwise.

Step 4: Registering the company in the KRS

File the application to register the company in the KRS within 6 months after the articles are drawn up. The company acquires legal personality when it is entered in the register.

The application to the registry court should include:

the company name, registered office and address, or an address for service;
the company’s business activities;
the amount of share capital and the number and nominal value of shares;
the amount of authorized capital, if provided for in the articles;
the number of preferred shares and the type of preference;
a statement of what portion of share capital was paid up before registration;
the names and surnames of Management Board members and the method of representing the company;
the names and surnames of Supervisory Board members;
a statement that non-cash contributions are being made, if applicable;
the company’s duration, if specified;
the publication designated for company announcements, if specified in the articles;
a statement of personal rights or rights to participate in the company’s income or assets that do not arise from shares, if provided for in the articles.

Attach the following:

the company’s articles;
notarial deeds documenting the formation of the company and the taking up of shares;
a statement from all Management Board members that the payments required by the articles for shares and non-cash contributions have been made in accordance with the law;
proof of payment for the shares into the company-in-organization account, certified by a bank or investment firm;
a document confirming the appointment of the company’s governing bodies;
a permit or proof that the articles were approved by the competent public authority, if required.

Single-shareholder joint-stock company

The Commercial Companies Code permits a joint-stock company to have a single shareholder. This form is rarely chosen in practice. All shares belong to one shareholder, who exercises the powers of the general meeting alone.

What to know about a single-shareholder joint-stock company:

Declarations of intent made by the sole shareholder to the company must be in writing on pain of invalidity.
At registration, in addition to the standard information, give the sole shareholder’s name or company name, registered office and address, and state that they are the sole shareholder.
A sole trader may transform their business into a single-shareholder joint-stock company.

Requirement to maintain a website

Polish law requires every joint-stock company and limited joint-stock partnership to maintain a website.

The website must include:

the company’s KRS number;
its tax identification number (NIP);
the amount of its share capital;
the competent registry court;
the company name;
the registered office;
the company address.

Shareholder communications section: the website should have a separate tab containing:

draft resolutions;
financial statements;
auditors’ opinions;
dates of planned general meetings.

Keep this information up to date and ensure it is accurate.

How to liquidate a joint-stock company

Liquidation of a joint-stock company means dissolving the agreement that established it and ending its legal existence. The company is dissolved only after liquidation proceedings have been completed and it has been removed from the KRS.

Opening liquidation

Liquidation begins when a court decision dissolving the company becomes final or when the general meeting adopts a resolution to dissolve it.

Reasons for dissolving a joint-stock company:

an event specified in the articles;
a general meeting resolution to dissolve the company;
a general meeting resolution to move the company’s registered office outside Poland;
the company is declared bankrupt;
another reason provided for by law.

Exception: if the company is dissolved because it is declared bankrupt, liquidation is not opened. The company is dissolved when bankruptcy proceedings end.

Once liquidation opens, the company continues under its existing name with the words “in liquidation” added. Liquidators represent the company instead of the Management Board. They are usually Management Board members, but the articles or a general meeting resolution may appoint other people. If a court orders liquidation, it may appoint the liquidators itself.

Reporting liquidation to the KRS

Report the following to the KRS:

that liquidation has opened;
the liquidators’ details and addresses;
how the company is represented during liquidation.

Prepare and approve an opening liquidation balance sheet. Publish it in the Court and Commercial Gazette together with a call for creditors to submit their claims within 6 months from the date of the last announcement.

Conducting liquidation

Liquidation involves closing all of the company’s current matters:

collecting receivables;
paying debts;
selling the company’s assets.

During liquidation, new business may be conducted only as necessary to complete matters already in progress.

Restrictions during liquidation:

shareholders may not receive any profit distributions;
the company’s assets may not be distributed before all liabilities have been paid.

Creditor protection: if the share capital has not been paid in full and the company’s assets are insufficient to cover its liabilities, the liquidators collect contributions from shareholders in an amount sufficient to cover those liabilities, starting with holders of shares that do not carry a preference in the distribution of assets.

Distributing assets of a company in liquidation

Assets remaining after creditors have been satisfied or secured may be distributed only after one year from the announcement opening liquidation and calling on creditors to submit claims.

Distribution rules:

Distribution is proportional to payments made toward the share capital.
If the company has shares preferred as to asset distribution, those shares are satisfied first, in proportion to the payments made for them.
Any remaining surplus is divided among all shares in proportion to payments toward share capital.

Late creditors, meaning those who did not submit claims by the deadline in the MSiG announcement and were not known to the company, may seek payment from assets that have not yet been distributed, up to the distribution date. After distribution, shareholders who received their portions are not required to satisfy those creditors.

Closing liquidation

After completing the liquidation steps:

Prepare financial statements.
Publish them at the company’s registered office.
Obtain approval from the general meeting. If no meeting takes place, for example, because there is no quorum, the liquidators publish the statements at the registered office and apply for removal without approval of the statements.
Apply to the court to remove the company from the register of entrepreneurs.

The company is dissolved when it is removed from the register and then ceases to exist as a legal person.

Frequently asked questions

What are the exact steps to form a joint-stock company in Poland?There are four steps: form the company by signing a notarial deed of formation and articles, make contributions to cover share capital, appoint the Management Board and Supervisory Board, and file an application for entry in the KRS register of entrepreneurs within 6 months after the articles are drawn up. Once all shares have been taken up, but before KRS registration, the company operates as a joint-stock company in organization. It already has legal capacity and may acquire rights and incur obligations. It acquires legal personality only when entered in the KRS.

What is the minimum capital needed to form a joint-stock company?The minimum share capital is PLN 100,000, and the nominal value of each share must be at least PLN 0.01. Shares taken up for cash must be paid up before registration to at least 25% of their nominal value. Shares taken up for non-cash contributions must be fully paid up no later than one year after registration.

Can one person form a joint-stock company?Yes. The Commercial Companies Code permits a single-shareholder joint-stock company. One shareholder owns all shares and exercises the powers of the general meeting alone. The sole restriction is that a joint-stock company cannot be formed exclusively by a single-member limited liability company. Declarations of intent made by the sole shareholder to the company must be in writing on pain of invalidity.

Which governing bodies must a joint-stock company have, and who appoints them?A joint-stock company must have three governing bodies: the Management Board, which runs and represents the company; the Supervisory Board, which oversees it and has at least 3 members; and the general meeting of shareholders, which adopts resolutions. The Supervisory Board appoints and dismisses Management Board members unless the articles provide otherwise. The general meeting appoints and dismisses Supervisory Board members. The terms of office of members of both boards may not exceed 5 years.

Which documents and information must be filed with the KRS to register a joint-stock company?The application must include, among other things, the company name, registered office and address, business activities, share capital, number and nominal value of shares, the details of Management Board and Supervisory Board members, and the method of representation. Attach the articles, notarial deeds documenting formation and the taking up of shares, a statement from Management Board members confirming the required payments, bank-certified proof of payment for shares, a document confirming appointment of the governing bodies and, if required, a permit from the competent public authority. File the application within 6 months after the articles are drawn up.

Polish Joint-Stock Company: A Practical Guide

Who can form a joint-stock company

Four steps to form a joint-stock company