Deadline for 2012 Financial Statements Approval
The deadline for approving the 2012 financial statements is promptly approaching for companies whose fiscal year overlaps with the calendar year.
The proper company authority should approve the financial statements by 30 June 2013. For example, in limited liability companies the Annual General Meeting of Shareholders acts as the appropriate body to approve financial statements.
The Management Board of a limited liability company should convene the Annual General Meeting by 30 June 2013. The Annual General Meeting should in turn adopt resolutions on financial statements and the director’s report on the company’s activities, on granting a vote of acceptance to Board Members and profit distribution/loss coverage. The resolution on financial statements approval should include the period covered by the statements, the balance sheet total and the net financial result.
The Management Board is under obligation to submit the financial statements to the proper registry court within 15 days starting from the day of approval. Together with the financial statements, the Management Board is obliged to submit the director’s report on the company’s activities and minutes from the Annual General Meeting. Moreover, within 10 days of the date of approval, the financial statements should be filed with the relevant tax office.
Should the financial statements not be filed with the court within the abovementioned time limit, the court may impose a fine on the company.
Accidents at work and insurance protection
On 7 February 2013, the Supreme Court resolved the legal issue on insurance protection for accidents at work (III UZP 6/12).
The case in question concerned two female employees that were injured at work but before they actually started working. The Social Insurance Institution refused to pay them one-time compensation, claiming that they were injured on their way to work.
The Supreme Court concluded that insurance governed by the Act on social insurance for accidents at work and occupational diseases of 30 October 2002 also includes accidents that occur in the workplace before beginning to work as long as the employee was ready to work.
Company president cannot perform two roles in a court of law
On 10 April 2013, the Supreme Court adopted a resolution (II UZP 1/13)stating that the President of a company Management Board cannot act in the court as a director of the company responsible for its debts and its representative at the same time.
The case concerned the President of the Board and the sole shareholder of a joint-stock company from which the Social Insurance Institution demanded payment of overdue social security contributions. The Company filed for bankruptcy in 2004, leaving behind approx. half a million of debt in unpaid social security contributions. The Social Insurance Institution decided to execute the overdue amount from the President of the Management Board. When the court of first instance reversed the decision, the Social Insurance Institution appealed against this, claiming that the whole procedure had been invalid due to the fact that the President of the company Management Board, being also its owner, had represented the company in court. According to the Social Insurance Institution, in such situation, the company should be represented by a Proxy appointed by the general meeting of shareholders.
The court of second instance has addressed the legal issue to the Supreme Court, which expressed its opinion and stated that the President of the board responsible for the debts of the company cannot represent it regarding this matter at the same time in court.
In oral justification of the resolution, the Supreme Court pointed out that, although there is no litigation between the company and its president, the interest of the former and the latter might be divergent. “It is sufficient to have a potential conflict of interest and it is not relevant whether the company only has one owner. Its assets are not the shareholder’s assets.”
Changes in the Bankruptcy and Restructuring Law
The Act of 25 January 2013, amending the Bankruptcy and Restructuring Law. entered into force on 30 March 2013.
The abovementioned Act has repealed Article 32 point 1 of the Bankruptcy and Restructuring Law. This provision didn’t allow for debtors to be discharged from court fees for the bankruptcy procedure. As a result, debtors without sufficient resources could not meet the obligation to submit the bankruptcy petition to court.
This provision has been found incompliant with the Constitution (Article 45 paragraph 1 in conjunction with Article 31 point 3) by the Constitutional Tribunal in the verdict dated 15 May 2012 (file ref. No P 11/10).
Removal of Article 32 point 1 results in the previous prohibition of exemption from court fees being automatically replaced by the general rules regulated by the Act on court fees.
According to Article 103 of this Act, the court might acknowledge the exemption from court fees for a legal person or organizational unit without legal personality to which the Act confers legal capacity once proved that such person or unit has no sufficient resources to make the payment.
New Act on payment deadlines in commercial transactions
On 28 April 2013 the Act of 8 March 2013 on payment deadlines in commercial transactionsentered into force.
The basic target of the newly adopted Act is to fight against the deepening issue of payment blockages. This Act introduces rules which force a reduction of delays in the payments of debts and force parties to use short payment dates. The Act is a consequence of an obligation to implement into the domestic legal system the regulations of Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions.
The Act defines precisely the rights of the creditor and the obligations of the debtor in relation to payment deadlines in commercial transactions, including the fixed compensation for the costs of debt recovery and the possibility to charge interest for delay starting with the 31st day after delivering the invoice to the debtor.
Contact:
Name: Agnieszka Samborska Corporate Services Manager agnieszka.samborska@accace.com Tel.: +48 504 021 963 www.accace.com
