As a result of the latest amendment to the Commercial Companies Code (CCC) of 30 August 2019, the shares of all joint-stock companies and limited joint-stock partnerships (of which there are estimated to be more than 14,000 in Poland) will have to be dematerialised by 1 January 2021. In addition, since the entry into force of regulations concerning new types of entities, this will also apply to simple joint-stock companies. As a consequence, from that date it will not be possible to hold shares in document form – they will have to be registered in a register of shareholders kept by (i) a brokerage house authorised to maintain securities accounts, or (ii) by a custodian bank, or (iii) by the National Depository for Securities (KDPW). At the same time, joint stock companies that have at least one share registered in the KDPW, i.e. all public companies, will have to register all previously unregistered shares in the KDPW. The register of shareholders will contain basic information about the company and detailed information about the shares and the shareholders – including restrictions regarding the disposal of the shares, the name and surname (company name) of the shareholder, the address of residence (registered office) of the shareholder, the e-mail address of the shareholder, and the number of shares held by the shareholder.
By 30 June 2020, every joint-stock company will have to call on its shareholders to submit their share documents and will have to select – and sign an agreement with – the entity keeping the register of shareholders. The share documents issued by the company will expire by operation of law on 1 January 2021, and after that date they will have evidentiary effect only, i.e. the shareholder may use them to show the company that it is entitled to exercise the rights attached to the shares. As of 1 January 2026, the evidentiary effect of the share documents will expire, and shareholders whose share documents have not been submitted to the company and have not been entered in the register of shareholders will lose the rights attached to them.
The information in the register will be public, i.e. the companies will have access to it and so will the shareholders themselves, regardless of how many shares they hold. Thus, even one share will entitle its holder to access the register and all the information contained therein.
An important consideration for entities granting financing is the fact that at the request of a shareholder, pledgee or usufructuary entitled to exercise the voting rights attached to shares, the entity keeping the register of shareholders will issue a personal register certificate indicating the scope of the applicant’s rights in relation to the shares. Another important change is that the disposal of shares will be effective upon the entry of an appropriate note in the register of shareholders. Moreover, information on the establishment of a limited right in rem over the shares (e.g. a registered pledge), information on the pledgee, as well as information that the pledgee is entitled to exercise the voting rights attached to the pledged shares must be entered in the register.
It should also be noted that according to the amended provisions of the CCC, the establishment of a pledge will be effective upon its entry in the register of shareholders. However, this conflicts with the current situation regarding the most popular form of security on shares, i.e. a registered pledge, which is effectively established when the pledge is entered in the register of pledges. It seems that after the entry into force of the amendment to the CCC, the courts will have to decide which entry will result in the effective establishment of the security. Regardless of this decision, entities granting financing will have to require financial entities to present additional documents related to the registration of a security interest and related rights in the register of shareholders prior to launching financing.
If you have any questions concerning the above or other issues related to combatting money laundering and the financing of terrorism, please do not hesitate to contact us.
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