Small revolution in polish corporate law - Will it be possible to register blockchain ​​stock?

Mgr. Matyáš Moska, a lawyer working as coordinator for Poland in the ARROWS International network, brings you the latest news in Polish legislation mediated by our partner law firm in Poland Kurpisz i Ziobrowski Adwokacka sp.p., whose partner is our colleague Tomasz Kasurpisz.

An important and long-awaited development in Polish corporate law is the simple joint-stock company (Prosta Spółka Akcyjna – PSA), which will create a completely new category of capital company in Poland from 1 March 2020.

This will be an interesting opportunity for all start-ups and new entrepreneurs in Poland. All agendas involving the establishment and management of a company, raising capital and transferring shares will be simplified as much as possible.

Although entrepreneurs in Poland currently have a choice of six types of company for asset management or business purposes, nearly 85% of all companies established over our northern border are limited liability companies (o.o.). For the practical purposes of business, the choices proposed by the Polish legislature are essentially an illusion. Almost all entrepreneurs, both large and small, will hence be solely dependent on the outdated construct of the limited liability company adopted into Polish law in 1919  (the cultural gap from 1919 to 2019 is clear) or, alternatively, the relatively rigid joint stock company.

In order to adapt to the real needs of the economy, Polish legislature has devised the concept of a simplified joint stock company (PSA), which combines certain aspects of the classic limited liability company with a joint stock company, and carried it forward into the twenty-first century.

A summary of the most important features of the simple joint stock company (PSA) is given below:

• One founder and an investment of PLN 1 is sufficient
• Online registration within 24 hours
• Simpler management, transferral and liquidation of companies, minimal formal requirements
• Shares for work, services or knowledge, i.e. for human capital – founders will be now be able to invest non-monetary contributions into the company, not only movable or immovable assets, plants, receivables or rights, but also, for example, services or knowledge from 1 March 2020
• Shares with no face value (new in Poland, through already established in the Czech Republic, as no par value stock and restricted stock units) – the value of shares will be determined by the issue price only, which may differ for different issues of securities
• Dematerialisation of shares (!) – shares will no longer be on paper (documentary) and will only be recorded in electronic form in a Register of Shareholders maintained by an entity licensed by the Polish Financial Supervision Authority (KNF), i.e. a notarial chamber, bank or investment company. This opens the opportunity and real possibility for a Register of Shareholders on a database based on, for example, blockchain technology. Furthermore, the amendment of the Polish Companies Act of 30 August 2019 anticipates this, stating: “The register of shareholders will be kept in electronic form, which may also take the form of a distributed or decentralised database.”

The aim of this important innovation in Polish corporate law is to make it easier for entrepreneurs to set up companies and effectively raise the capital needed to develop them in the simplest way possible. As mentioned above, the law to establish a company (PSA) will now require only one founder and a deposit of PLN 1. Online registration of the PSA (!) will take no longer than 24 hours, and maintaining shares in decentralised databases using, for example, blockchain, will be possible.