Sp. z o.o. (LLC companies in Poland) with no share capital
The Council of Ministers has adopted guidelines for the draft of statute amending the Commercial Code and other laws, submitted by the Minister of Justice. The project introduces far-reaching alleviation of the requirements for establishment of spółka z o.o. (limited liability company/llc).
Firstly, the share capital of a limited liability company will become optional. The shareholders will be able to opt out of share capital and decide that the shares will have no nominal value. The price at which the shareholders will pay them up will be determined by the shareholders in the articles of association but the value will not be attached to the share. Contributions to cover no nominal value shares will be allocated to equity capital, which will become one of the basic capitals of the company within the meaning of the Accounting Act.
Secondly, if the shareholders decide to establish the share capital, its minimum amount will be reduced from the current 5 000 PLN to 1 PLN. This is dictated by the impossibility to define universal standards, that would take into account the specificities of the different sectors and that would constitute sufficient protection for creditors. In the opinion of the authors of the guidelines current level of minimum share capital offers merely illusory guarantee.
Thirdly, the project introduces the possibility of a mixed system. It will be possible for the company to have both shares with nominal value and no nominal value. Consequently the company will have both share capital and equity capital but the payment of dividends and repayment of the redemption will be made from common pool. The mixed system does not lead to isolation of separate assets assigned to different types of shares. Already existing companies will also be eligible to adopt mixed system. The goal of this change is to greatly facilitate and accelerate the acquisition of new investors, especially in cases where market value of the company is below the nominal value of the shares.
In order to protect the creditors of limited liability companies proposed amendments provide two additional security features - a solvency test in the case of any distribution of assets to the shareholders and a requirement to transfer a part (1/10) of profit to reserve capital (up to 5% of liabilities but not less than 50 000 PLN). New safeguards will also apply to existing companies.
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