The Covid-19 Act amends the Polish Commercial Companies and Partnerships Code (hereinafter referred to simply as the “Companies Code”) with regard to areas such as holding sessions and adopting resolutions via direct remote communications technologies. Apart from that, the Covid-19 Act amends a number of other statutes so as to extend the deadlines for fulfilment of certain duties and to limit the liability of individual members of governing bodies under the extraordinary circumstances brought on by the corona crisis.

Management board and management board sessions using ICT

The Covid-19 Act provides that the management boards of limited liability companies, joint stock companies, and partnerships limited by shares may hold sessions relying on information and communications technology solutions, in particular via teleconference or videoconference (e.g. Skype, WhatsApp, or Signal). Also, it will now be possible to adopt management board resolutions via a written procedure or via electronic communications even where such a possibility is not expressly provided for in the articles / deed of incorporation of the given entity. In this way, Polish company law not only addresses the exigencies arising under the unusual circumstances of the present pandemic, but also makes allowance for developments in what is an increasingly digitised economy.

Among other solutions:

  • The supervisory boards of limited liability companies, joint stock companies, and partnerships limited by shares will likewise be able to hold online sessions;
  • The default presumption will be that votes on supervisory board resolutions may be cast in writing, via a written procedure or via electronic communications; until now, such a possibility had to expressly envisaged in the articles / deed of incorporation of the given company;
  • Written / electronic votes cast remotely will be permitted also in cases where this was hereuntil not allowed – when appointing the chairman and vice chairman of the supervisory board and appointing management board members, and likewise when removing them from their posts.

The caveat is that written votes are still not allowed with respect to any matters introduced to the agenda only once the supervisory board session was underway. Also, some practical difficulty may arise from the fact that the current rules regarding the quorum remain unchanged; a supervisory board resolution is deemed to have been validly adopted if all members received the draft prior to the supervisory board session and if at least half of them participated in the vote.

Remote management board sessions and general meetings

The Covid-19 Act provides for holding management board sessions and general meetings using electronic communications technologies even where such a possibility is not expressly provided for in the articles / deed of incorporation of the given company. The decision to adopt such a remote procedure shall be taken by the person calling the session / meeting.

The Covid-19 Act, in recognition of the need to lay down certain ground rules for management board sessions and general meetings, obligates the supervisory board – or, for entities which do not have a supervisory board, the shareholders / partners – to adopt a body of rules pertaining specifically to “virtual” meetings, addressing the various organisational issues – not the least of which is comprised in dependable identification of the participants and communications security.

As regards any meetings of shareholders or general meetings which had been called before the Covid-19 Act came into force, the person who had called them may opt to allow participation on a remote / electronic basis, subject to the qualification that this must be announced in compliance with the same procedure as is used to call the meeting, and not later than 4 days prior to the meeting date. We note that this, as it were, interim solution does not sit easily with the requirement – highlighted in the preceding paragraph – that a company adopts specific rules governing the organisational details of remote / virtual meetings.

Lighter burden on members of governing bodies in the context of public procurement

The Covid-19 Act excludes criminal liability for the offence penalised by arts. 296 § 1-4 of the Criminal Code with respect to enforcement of amounts due in connection with improper performance, or failure to perform, a public procurement contract as a result of circumstances associated with the Covid-19 outbreak, and also excludes liability of management board members, supervisory board members, audit committee members, and liquidators vis a vis the company for harm occasioned by action, or failure to act, contrary to applicable laws or to the company’s articles (as invoked in arts. 293 § 1 and 483 § 1 of the Commercial Companies and Partnerships Code) with respect to enforcement of amounts due in connection with improper performance, or failure to perform, a public procurement contract as a result of circumstances associated with the Covid-19 outbreak. To put this in more straightforward language, the directors of contracting authorities have more leeway to waive the contracting authority’s rights vis a vis underperforming contractors where they deem the latter’s failure to deliver to be a consequence of the corona crisis.

Extended reporting and disclosure deadlines

The Covid-19 Act provides for delayed filing of financial reports and for moving back the shareholders meetings / general meetings of companies, subject to a relevant regulation to be promulgated by the Minister of Finance.

The deadline for filing information to the Beneficial Owners Register as per art. 195 of the legislative Act regarding counteraction of money laundering and financing of terrorism has been moved back by 3 months, from 13 April 2020 until 13 July 2020.

No solutions re mandatory dematerialisation of shares

We note with some concern that, among these various solutions intended to facilitate operations of companies during the corona crisis, the legislature did not see fit to defer the deadlines for fulfilment of the freshly enacted duties concerning dematerialisation of shares, this despite concerns raised in this regard while the Covid-19 Act was still under preparation. Companies endeavouring to observe the current 30 June deadline for transition to a default dematerialisation regime under the difficult conditions arising from the pandemic will have a hard task ahead of them.

 

Contact:

Julia Trzmielewska

associate

j.trzmielewska@gessel.pl

 

 

Krzysztof Jasiński

senior associate

k.jasinski@gessel.pl

 

 

 

Paulina Maciąg

associate

p.maciag@gessel.pl