Elective share capital in a limited liability company?

The proposed legislative reforms would implement legal solutions geared at facilitating business operations in the legal form most popular among entrepreneurs – the limited liability company.

Under the model envisaged in the reforms, the shareholders in a limited liability company will be able to choose between the existing share capital model, a share capital model relying on shares without a nominal value (hereto unknown in Polish companies law), and a mixed model involving shares with and without a nominal value.

In de facto terms, acquisition of shares without a nominal value translates into permission for operation of a company without a defined share capital. Under art 154 § 1 of the Commercial Companies and Partnerships Code, the minimum share capital of a limited liability company is PLN 5,000; prior to 2009, the minimum share capital of a limited liability company was PLN 50,000.

In an important difference distinguishing these proposals from others providing for broadly similar solutions (e.g. the one proposed by a group of deputies to the Sejm in late November 2012), the Civil Law Codification Commission draft provides for a range of solutions safeguarding the interests of creditors.