New provisions recently introduced into the Polish Commercial Companies Code will establish registers of shareholders in 2021. Shares not subject to dematerialisation will consequently take the form of electronic entries instead of their existing paper form.
What is the current position?
At present, shares in Polish joint-stock companies and partnerships limited by shares that are not subject to mandatory dematerialisation under the Public Offering Act exist physically as paper certificates. These certificates are generally held by their owners, the shareholders. The register of shareholders will cause all these documents to cease to be valid in 2021.
What will change?
The new provisions state that paper share certificates will cease to be valid in 2021. Instead, shareholders of non-public Polish joint-stock companies and partnerships limited by shares will be entered in a register of shareholders. These registers will be maintained by entities authorised to operate securities accounts and holding the appropriate licence from the Polish Financial Supervision Authority (KNF). Each company’s general meeting will select the entity maintaining its register. The securities may also be registered in a securities depository, in which case they will not be entered in a separate register of shareholders.
What does the register of shareholders contain?
The register of shareholders contains, among other details, the company’s business name, registered office and address, the registration court, its KRS number and the date of registration. It also records the issue date, nominal value, series and number of the shares, their class, special rights and transfer restrictions. The register additionally includes each shareholder’s full name or business name, residential address, registered office or other address for service, and email address if the shareholder has consented to electronic communication.
At the request of a person with a legal interest, the register also records transfers of shares or pledge rights to another person, or the creation of a limited right in rem over a share. The entry specifies its date and identifies the acquirer, pledgee or usufructuary, providing the same particulars as for a shareholder, together with the quantity, series and numbers of the acquired or encumbered shares. The register may also record a pledgee’s or usufructuary’s entitlement to vote the encumbered share.
The register of shareholders also states whether the shares are fully paid up, any restrictions on disposing of them and the provisions of the articles of association concerning obligations towards the company attached to the shares. The company’s articles may also require additional information to be disclosed in the register.
Disclosure obligations
From as early as 1 January 2020, non-public Polish joint-stock companies and partnerships limited by shares will have to maintain websites with information for shareholders. They must publish on those websites the notices addressed to shareholders required by law or their articles of association. The website addresses must be notified to the Polish National Court Register (KRS).
Notices to shareholders
From the beginning of 2020, under the implementing provisions, Polish joint-stock companies and partnerships limited by shares will be required to call on shareholders to deposit their share certificates at the company’s registered office. Five such notices must be issued, and information about them must appear on the company’s website. The notice requesting deposit of the certificates must be given in the manner applicable to convening a general meeting. The notices must be spaced no more than one month and no less than two weeks apart. The first must be issued by 30 June 2020 at the latest. A receipt must be issued for deposited certificates. Before issuing the first notice, the company must enter into an agreement with an authorised entity to maintain the register.
Entry in the register
An entry may be requested by the company or by anyone with a legal interest. The entity maintaining the register of shareholders must make the entry within one week of receiving the request at the latest. Once the changes take effect, only persons entered in the register may be recognised as shareholders.
Costs and sanctions
Registers of shareholders will be maintained by external providers. This means additional, tangible costs for Polish joint-stock companies and partnerships limited by shares. Those responsible for failure to fulfil the new obligations may face a fine of up to PLN 20,000.
