The coronavirus epidemic – planned remedies in the area of company law

The state of epidemic emergency announced in Poland has created an unprecedented situation that is seriously affecting businesses and their business activity. In recognition of the problems that businesses will have to face in the coming months, the government has announced the rollout of a remedial package called “The Economic and Social Anti-Crisis Shield for the Security of Businesses and Employees in the Face of the Sars CoV-2 Virus Pandemic”, which intends to support businesses and employees in the difficult situation in which they find themselves.

Solutions aimed at mitigating the impact of the coronavirus epidemic (also referred to as “COVID‑19”) on the economy include the preparation of a draft act dated 21 March 2020 on amending the Act on special solutions related to preventing, counteracting and fighting COVID-19, other infectious diseases and the resulting crisis situations, and on amending certain other acts (the “Bill”), which is to translate the assumptions stipulated in the shield package into actual legislation. It is envisaged that the new regulations will enter into force on the date immediately following the publication of the act in the Journal of Laws.

Below we present the most important changes set out in the Bill with regard to company law.

EASIER MANAGEMENT BOARD MEETINGS

The Bill undertakes to introduce certain provisions into the Commercial Companies Code that permit members of management boards of limited liability and joint stock companies to participate in management board meetings with the use of means of direct communication over distance (e.g. via a conference call or a video call). In addition, the management board will be able to adopt resolutions in writing and vote on resolutions through another management board member. It will be possible for the articles of association to contain different provisions in that respect.

Thus far, these issues have not been explicitly regulated by the provisions of the Commercial Companies Code. The possibility to adopt resolutions in writing or with the use of means of direct communication over distance and to vote through another management board member has already been accepted by a significant part of the doctrine, although contrary opinions were also voiced by some scholars.

EASIER SUPERVISORY BOARD MEETINGS

The changes to the Commercial Companies Code envisaged in the Bill will facilitate the operation of the supervisory boards of companies the articles of association of which do not contain provisions allowing the supervisory board to adopt resolutions in writing or with the use of means of direct communication over distance, and do not explicitly permit resolutions to be voted upon through another member of the supervisory board.

If the Bill enters into force, the default model will permit the supervisory board to adopt resolutions in writing or with the use of means of direct communication over distance and to vote through another member of the supervisory board. It will be possible for the articles of association to contain different provisions in that respect.

The Bill also extends the scope of matters that can be decided by the supervisory board by voting with the use of the methods referred to above. If the Bill enters into force, voting in this manner will also be permitted for the purpose of appointing the chairperson and deputy chairperson of the supervisory board, as well as appointing, dismissing and suspending a management board member. The provisions currently in force require that these decisions be adopted during a physical meeting only.

MANNER OF OPERATION OF GENERAL MEETINGS AND MEETINGS OF THE SHAREHOLDERS

The Bill envisages an amendment of the provisions governing the holding of general meetings and meetings of the shareholders using remote means of communication. In both cases, such option will be statutorily permitted unless the articles of association of a given company disallow it or regulate the issue differently. The minimum technical requirements for a meeting held remotely are that undisrupted two-way communication in real time and the exercise of voting rights must be made possible. Therefore, organising a conference call is a sufficient solution as video transmission is not required. In addition, public companies are required to provide a transmission of the session in real time, which up to this point has not been a mandatory requirement. The decision on whether a general meeting or a meeting of the shareholders is to be held remotely will be at the discretion of the person or entity convening the given meeting.

POSSIBILITY TO POSTPONE THE DEADLINE FOR THE APPROVAL OF THE REMUNERATION POLICY FOR MEMBERS OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD OF A PUBLIC COMPANY

The Bill also envisages the possibility to postpone the deadline by which resolutions on approving the remuneration policy for members of the management board and supervisory board of public companies are required to be adopted. The obligation to adopt such resolutions by 30 June of the given year was introduced under an amendment to the Act on Public Offerings (Article 90d), which entered into force on 30 November 2019. However, the Minister of Finance will be authorised to postpone such deadline by way of a regulation issued thereby.

PERMITTED POSTPONEMENT OF THE DEADLINE FOR THE PREPARATION OF FINANCIAL STATEMENTS AND THE APPROVAL THEREOF

The Bill authorises the Minister of Finance to specify, in the form of a regulation, a new deadline for the preparation, approval and submission of the financial statements to the National Court Register. The Minister of Finance was further authorised to specify the deadlines for other registry-related obligations and obligations involving the preparation, approval and submission to the relevant authorities of other information and reports required under the Polish Accounting Act.

PERMITTED POSTPONEMENT OF THE ANNUAL GENERAL MEETING OR THE ANNUAL MEETING OF THE SHAREHOLDERS

If the Minister of Finance chooses to exercise the authorisation set forth in the Bill to extend the deadline for the approval of the financial statements (the provisions currently in force require companies the financial year of which is the calendar year to procure such approval by 30 June of a given year), the deadline for holding the annual general meeting or the annual meeting of the shareholders will be extended accordingly. The provisions of the Commercial Companies Code state that the mandate (appointment for a term of office) of a member of the management board and the supervisory board expires upon the holding of the annual meeting of the shareholders that approves the financial statements. Consequently, if the Minister of Finance chooses to exercise the authorisation set forth in the Bill, the mandates of members of the governing bodies that expire upon the approval of the financial statements for the year 2019, will be extended accordingly.

EXTENSION OF THE DEADLINE FOR SUBMITTING INFORMATION TO THE CENTRAL REGISTER OF BENEFICIAL OWNERS

The Bill provides that companies required to make a filing disclosing their beneficial owners with the Central Register of Beneficial Owners (the “Register”) will have an additional three months to fulfil such requirement. The submission deadline will be postponed until 13 July 2020.

Please note that the above-mentioned change will only apply with regard to companies entered in the National Court Register before 13 October 2019. The obligations of companies incorporated after that date will remain unchanged, i.e. these companies will have seven days to make a beneficial owner filing with the Register (and any subsequent updates to such filing).

NO CHANGE OF DEADLINES RELATED TO THE MANDATORY DEMATERIALISATION OF SHARES

There are certain obligations related to the mandatory dematerialisation of shares that must be fulfilled by 30 June 2020. By that date, the company should announce the first call for the shareholders to submit their share certificates and conclude an agreement on maintaining the register of shareholders.

Due to the fact that the appointment of the entity to maintain the register of shareholders requires a resolution of the general meeting, companies that have not yet made such appointment should hold the general meeting by 30 June 2020 (even if the Bill enters into force and annual general meetings are, in principle, permitted to be held at a later date). With regard to this issue, it would be reasonable to also advocate for the postponement of the dematerialisation deadline. Perhaps the relevant provisions will be added to the Bill at a later stage of the legislation process.

THE CORPORATE TEAM OF RYMARZ ZDORT

The corporate team of Rymarz Zdort is ranked by prestigious legal rankings such as Chambers and Partners and Legal 500 among Poland’s top law firms for company law, mergers and acquisitions and equity capital markets. Rymarz Zdort was ranked among top law firms in Poland in terms of the aggregate value and number of handled transactions in 2019 (according to Mergermarket Europe). The corporate team advised on numerous highly complex transactions across all sectors of the economy.

If you are interested in more detailed information on the changes to the company law that are planned to be enacted due to the state of epidemic emergency, please do not hesitate to contact us.