In 2021, a new type of company became available to those who intend to start a business in Poland – a simple joint stock company (P.S.A. – prosta spółka akcyjna). It was primarily presented as addressed to start-ups – most of which were choosing spółka z ograniczoną odpowiedzialnością (Polish private limited liability company) as their legal form.
However, P.S.A. is also a helpful solution for other businesses – so it is worthwhile to consider it.
One of the partners of JWMS law firm, attorney-at-law Marcin Mazgaj, PhD, was a member of the team that drafted the law introducing P.S.A.
P.S.A. brought a lot of advantages for new companies, but many issues have to be taken into account so that the possibilities provided by P.S.A. are correctly used.
The fact that spółka z o.o. was the most popular choice among new businesses was primarily due to a lack of reasonable alternatives. Although the “classic” joint stock company (spółka akcyjna) offers, e.g. many options for raising capital, it also requires a lot of formalities and is expensive in maintenance. The simpler and less costly spółka z o.o. was then chosen, despite its limitations.
P.S.A. is supposed to combine practical elements from both spółka z o.o. and spółka akcyjna, as well as to provide specific new, innovative solutions.
Founding a P.S.A. is simpler.
Founders of a Spółka z o.o. are obliged to pay up a share capital of PLN 5,000. Spółka akcyjna must have a share capital of at least PLN 100,000 (1/4 of this amount must be paid up before registration). While contributions in-kind are allowed, executing them is more complicated, and they cannot consist of, e.g. provision of services.
In the case of prosta spółka akcyjna, the minimum capital requirement is one PLN. Furthermore, even if more shares are issued, only one PLN must be paid up before the company is registered. Shares can also be paid up through the provision of services by the shareholders.
Like the other mentioned companies, P.S.A. may be created over the internet. However, digital registration allows the application of only a basic template of articles of association (as a result, e.g. shares can only be paid up with money).
More flexible corporate solutions
Both spółka z o.o. and spółka akcyjna do not allow much flexibility in regulating corporate documents.
There are also limits regarding preferred shares (e.g. in spółka z o.o. – one share cannot give more than three votes).
Founders of P.S.A. may enjoy much flexibility concerning corporate rules. For example, if a particular share is supposed to grant a special right of having more votes, there is no limit on the number of votes – no law prohibits one share from giving 50 votes while others still provide just one. However, it has to be underlined that regulations that make the rights of shareholders glaringly unbalanced can be considered invalid because they would be against the very idea of a company.
It is possible to create so-called “founder’s shares” in P.S.A. that protect those who have them from their shares being diluted (in short: if new shares are issued, but the owner of the “founding shares” does to acquire any, the number of votes that “founding shares” grant is increased).
Issuing new shares is also simpler, making it easier to find investors and create ESOPs.
P.S.A. founders may choose between using governing bodies in the so-called “dualistic model (management board + optional supervisory board – similarly to other Polish companies) or the so-called “monistic” model (popular especially in Anglo-Saxon countries – in that model, “board of directors” is one body and may consist of executive and non-executive directors).
Fewer formalities
While spółka akcyjna has many advantages, one of the main issues in the day-to-day management of the company is the fact that all general meetings must be drawn as a notarial deed.
This is not required in the case of P.S.A. – a notary must be present only during specific shareholder meetings.
Also, P.S.A., unlike spółka akcyjna does not require supervisory board – or rada nadzorcza in Polish.
Comparing to spółka z o.o., the transfer of shares in P.S.A. is simpler and faster. Shares of spółka z o.o. must be transferred in an agreement signed with signatures confirmed by a notary (there are some limited exceptions to that). Shares of P.S.A. can be transferred using what is called “document form” – while what is considered documents may be a little vague, not to go into too many details, many forms of digital signatures (or even a message sent via e-mail) can be considered as a declaration in “document form” (so shares can be transferred using the internet).
ESOP
As mentioned above, it is possible to make custom-made corporate solutions due to more flexible regulations. In particular – it includes more effective solutions for employee share option plans (that are rarely applied in the case of spółka z o.o.).
Not only is distributing shares easier from the corporate point of view, but P.S.A. has also been included in the tax regulations that allow beneficiaries of ESOP to be protected from tax results of the acquisition of shares below their market value. Before that, those regulations only applied to spółka akcyjna, limiting their use heavily.
For all these reasons, choosing P.S.A. as the legal form of company in Poland may be a practical option. Of course, not for all cases. However, it should be taken into consideration. For more info feel free to get in touch directly with JWMS law firm.
