Poland has experienced rapid development in the start-up sector in recent years. Unfortunately, the Polish legal system has as yet failed to meet the needs of innovative businesses.
This is about to change with the new concept presented at the end of June 2016 by the Ministry of Economic Development (Ministerstwo Rozwoju) in a working paper. The intention of the Ministry of Economic Development is that a new type of a company is introduced – a simple joint-stock company (Prosta Spółka Akcyjna) (the “PSA”). The PSA is meant to combine the advantages of a limited liability company (spółka z ograniczoną odpowiedzialnością) and a joint-stock company (spółka akcyjna).
To date, neither of these legal entities has been a suitable solution for start-ups. On the one hand, a limited liability company does not allow for diverse forms of investments. And its transformation into a joint-stock company in case of an initial public offering is troublesome. On the other hand, a joint-stock company generates considerable operational costs and numerous procedural complications. These drawbacks are of crucial importance, especially for innovative ventures with a significant possibility of failure.
In the course of broad public consultations, with the participation of institutional and private investors, the needs and expectations of the start-up industry in Poland were analysed. As a result of the debate, the Ministry of Economic Development prepared the above-mentioned working paper which details the following main features of the PSA:
- one-stop electronic registration taking 24 hours (also available in English);
- minimisation of the initial share capital – to a mere PLN 1;
- know-how and labour brought as in-kind contributions, without any complicated and expensive valuation process;
- facultative establishment of a supervisory board;
- simplification of decision-making processes at general meetings by enabling adoption of resolutions via means of remote communication;
- quick liquidation procedure in case of the business fails.
The PSA concept is still evolving. It is not yet known for sure which proposals from the debate will be introduced in the Polish Commercial Companies Code (Kodeks spółek handlowych) or whether even a new act will be adopted. Once the final draft of the new law has been presented, a further thorough analysis should be conducted.
Irrespective of the ultimate form of the new legislation, the debate regarding the simplification and digitalisation of Polish company law is definitely a good step towards making the Polish legal system more attractive and competitive within the EU. Solutions designed to support aspiring start-ups in the early-days of their development can in particular be very stimulating and promising.