Company Law 24. March 2020

Poland: Corporate resolutions vs. coronavirus restrictions

24. March 2020
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Marek Wojnar
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act legal Poland

Actions aimed at quelling the spread of COVID-19, such as border closures, flight cancellations and severe restrictions on gatherings and travel, may have a massive impact on business operations, especially when it comes to resolutions adopted by shareholders, management boards and supervisory boards.

If resolutions cannot be passed by the shareholders meeting or the management board, it may have a significant adverse impact on the company’s daily business.

With this alert, we want to offer shareholders and members of corporate bodies some insight on solutions that may help mitigate the impact of the state of epidemic, as well as an overview of the amendments to the Commercial Companies Code, which are about to be introduced as part of the so-called “Anti-Crisis Shield.”

Supervisory board

It might be easier for a supervisory board to operate if the following options are applied:
– passing written resolutions by circulation;
– voting on resolutions through electronic means;
– proxy voting (in writing).

The above options are available only if permitted by the company’s articles of association.

Works are underway to change the above as part of the so-called “Anti-Crisis Shield.” Based on the published draft bill amending the “Act on Special Solutions Related to Prevention and Combating of COVID-19, Other Infectious Diseases and Crisis Situations Arising from them,” as well as amending selected other acts (the “Draft Bill”), it would be possible to pass resolutions in the aforesaid manners with no need to define the basis for such action in the company’s articles of association (unless the articles of association expressly exclude such options).

It should be noted that resolutions on matters put on the agenda during a supervisory board meeting, election of the supervisory board president or deputy president, appointment of a management board member, and dismissal or suspension of such individuals cannot be adopted by circulation or through electronic means. The Anti-Crisis Shield is going to change the regulations to allow these resolutions to be passed in the manners listed above.

Management board

At present, there are no regulations that would explicitly allow a management board to pass resolutions by circulation or through electronic means (e.g. during a videoconference). With much debate surrounding this way of adopting resolutions, it is recommended to comprehensively regulate the manner of holding management board meetings in the articles of association.

Pursuant to the Draft Bill, the lawmakers pledge to allow management board members to:
– attend meetings through electronic means (unless the company’s articles of association expressly exclude this option);
– pass resolutions by circulation or through electronic means (unless the company’s articles of association expressly exclude this option);
– vote in writing by delegating the voting power to another management board member (unless the company’s articles of association expressly exclude this option).

These changes have yet to be adopted.

Meeting of shareholders

Shareholders meetings may only be held in Poland, and should take place in the city/town where the company’s registered office in situated or at a different location, as specified in the company’s articles of association or agreed upon by all shareholders.

Shareholders who are unable to attend a meeting in person may use the following solutions:

1) Proxy voting
A shareholder may appoint a proxy who will attend the meeting and vote on the shareholder’s behalf (unless applicable laws or the articles of association impose any restrictions in that respect).
A proxy should be granted in writing or will otherwise be null and void.
The company’s management board members and employees cannot attend a shareholders meeting in the capacity of a proxy.

2) Voting in writing (in a private limited liability company)
In the case of a private limited liability company, shareholders can pass resolutions in writing, i.e. by:
– expressing a written consent for a resolution to be adopted; or
– holding a vote on a resolution in writing, following all shareholders’ approval of such voting procedure.

A vote in writing may be held irrespective of the place where the shareholders are when casting a vote.

Not all resolutions may be adopted by circulation, though. Voting in writing is not an option in case voting secrecy is required (e.g. in case of a resolution on dismissal of a management board member or other HR issues).

3) Attending a meeting through electronic means

A shareholder may attend a shareholders meeting through electronic means (videoconference, teleconference, etc.). However, as things stand now, this is a viable option only if the articles of association allow the possibility to hold meeting in such way.

Holding a shareholders meeting through electronic means (with no need for physical presence) is allowed only if real-time broadcast from the meeting is available, with the absent shareholders being able to communicate and speak during the meeting in real time.

However, this format of a shareholders meeting is not equivalent a virtual meeting. This means that the following rules apply to meetings held through electronic means:
– a meeting should be held in a specific venue in Poland, determined in accordance with the Commercial Companies Code and the company’s articles of association;
– the chairperson and the clerk (or a notary public, if the notarial form is required for minutes from the meeting) must be present at the meeting, with only the shareholders being allowed to communicate electronically;
– written minutes from the meeting are required.

Shareholders may also attend and vote at meetings held through electronic means by proxies, in accordance with the rules specified above.

4) Using the IT system

Shareholders may make decisions using the model resolution available in the IT system but this option is only available to private limited liability companies established through the IT system.

There is no need to hold a formal shareholders meeting in order to pass this type of resolution, with the only condition for its valid adoption being that all the shareholders should vote by submitting a relevant statement through the IT system.

The above-mentioned voting statements must be confirmed with an electronic signature, a qualified electronic signature or a trusted signature.

Annual shareholders meeting

The Draft Bill includes solutions aimed at helping companies to meet the deadline to hold an annual shareholders meeting, at which shareholders approve the company’s financial statements for the previous financial year.

Pursuant to the Commercial Companies Code, all annual shareholders meetings should take place within six months after the end of each financial year. The Draft Bill includes a provision according to which the minister competent to handle public finance affairs would be authorized to issue a regulation entitling him/her to postpone (on a discretionary basis) the deadlines for the approval of financial statements in case of the state of epidemic threat or the state of epidemic, considering the need to ensure proper performance of obligations in that respect (it needs to be noted here that on March 20, 2020, the Health Minister announced the state of epidemic in Poland). If the minister chooses to issue a regulation setting a new deadline for the fulfilment of obligations related to the approval of financial statements, falling more than six months after the end of a financial year, annual shareholders meetings should be held no later than on the date specified in such regulation.

Remuneration policy

The Draft Bill also aims to revise the Act of October 16, 2019 on Amendments to the Act on Public Offerings and Conditions for Introduction of Financial Instruments into Organized Trading, and on Public Companies, and Amendments to Selected Other Acts. Based on the intended changes, the annual shareholders meeting of a public company (i.e. a company with its registered office in Poland, with at least one share admitted to trading on a regulated market) would be obliged to pass a resolution on the remuneration policy applicable to the management board and supervisory board members until August 31, 2020.

Many of the solutions outlined above may significantly facilitate and expedite the operations of corporate bodies and daily business, both during the epidemic and afterwards.

Some of these options are only available if they are permitted under the articles of association, so now might be a good time to insert relevant provisions into the company’s constitutional documents or grant relevant proxies.

Our corporate law team is available to answer any questions you might have.

***
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Marek Wojnar
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act legal - BSWW legal & tax
About the authors

Marek Wojnar

Managing partner

Marek specializes in real estate, construction, corporate law, M&A, and acquisition/sale of aircrafts and yachts. He has vast experience in real property sale and acquisitions, leasing processes and implementation of infrastructure (energy and motorway) projects. Marek has worked on a large number of projects for IT and telecommunications companies, while at the same time providing legal advisory services related to cooperation with start-ups. He also has a long track record of transactions involving the sale, chartering and lease of planes, helicopters, yachts and superyachts. He co-heads the firm’s Italian Desk, assisting a number of Italian clients in Poland and Polish clients that run their business in Italy.

Piotr Wojnar

Managing partner

Piotr specializes in commercial law, with a strong focus on assistance in corporate issues for public companies. He also has extensive litigation background within the areas of civil law, administrative law and criminal law. He has advised on numerous public and private share issues, incl. those of COMP S.A. and Bank BPS S.A. Piotr has piloted M&A transactions for listed companies (incl. Novitus S.A., ZUK S.A. and Elzab S.A.), participated in the establishment of brokerage houses and investment funds (incl. TMS S.A., Analizy Online Asset Management S.A., IFM S.A. and Opera TFI S.A.), as well as provided assistance with respect to their daily operations. He has been recommended in Capital Markets, Commercial, Corporate and M&A and White-Collar Crime by the Legal 500 EMEA 2020, one of the leading international legal directories. The white-collar crime practice, co-headed by Piotr, is considered by The Legal 500 EMEA to be among the elite of Polish law firms specialized in that area.

Janusz Szeliński

Partner

Janusz specializes in capital markets, corporate and copyright matters with a particular focus on IT and TMT market. He advises on M&A deals and IPO processes. Moreover, he specializes in disclosure policies by public companies. Janusz also advises companies from IT sector (i.e. game developers and software integrators) on issues relating to financing, copyrights, as well as IT implementation agreements and license agreements. His expertise also covers contracts for the purchase and implementation of a central transaction system for a bank affiliating a range of cooperative banks. Janusz has taken part in negotiations related to the implementation of the electronic supervision system in Poland for the Ministry of Justice. He also supervised the purchase of the enterprise of an investment fund company by another investment fund company and the takeover of fund management operations. Janusz has been recommended by The Legal 500 EMEA 2021 in capital markets and commercial, corporate and M&A categories.

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