Simple Joint Stock Company is supposed to become an attractive alternative for entrepreneurs operating in the sectors of innovation and new technologies. Among significant simplifications is the digitalization of many procedures. All that is needed to register a company is an Internet connection. The same applies to passing shareholder resolutions and trading in shares. This is not the only thing that distinguishes S.J.S.C. from other capital companies. What are the biggest differences between new business creation and a limited liability company?
Formal issues
It would seem that initially there are not many differences. The conclusion of the agreement and registration in both cases looks similar. The contract is concluded in the form of a notarial deed or the electronic system S-24. The second option is possible only with cash contributions. Nevertheless, when considering the details of the company differ … to the advantage of the Simple Joint Stock Company.
Already at the time of contribution, there are significant facilitations for the S.J.S.C. While the contributions of a limited liability company have to be made before its registration, in the case of P.S.A. the term is extended up to three years after its registration. In addition, the shareholder has the rights to shares regardless of their coverage.
Both companies differ in their approach to the initial capital of the company. In S.J.S.C., the share capital, which is funded only by capital contributions, amounts to one zloty. This contrasts with a limited liability company, where “at the start” it is necessary to have a minimum of 5,000 PLN for the initial capital. Moreover, in the S.J.S.C. there is no requirement to amend the articles of association when changing the amount of share capital, which is a significant formal simplification. S.J.S.C. shares also do not have a nominal value. They are taken up at a freely determining issue price. On the other hand, in the case of a limited liability company, the minimum value of a share is PLN 50. This facilitates a possible restructuring of S.J.S.C. Because the shares can be taken up at any low-issue price.
S.J.S.C. shares
Lack of nominal value of S.J.S.C. shares is not the only convenience. Dematerialized S.J.S.C. shares can be fully identified. This, in turn, ensures their mandatory entry in the shareholder register maintained by a brokerage house or notary. The situation is different in a limited liability company. There, shares only have the form of an entry in the shared ledger. In addition, full identification of their owners is not ensured, which may create risks in business transactions.
Therefore, formal facilitations are provided for S.J.S.C., while formalities are strongly limited for a limited liability company.
This is the case, for example, with preferential shares. For example, one cannot create dumb shares or founders’ shares providing the founders with additional rights in the future. On the other hand, the limitation of voting preference in a limited liability company is up to three votes per share. Thus, no fractional preference is possible, which in some cases would significantly help to dispose of votes.
Possible liquidation
Simply ending the life of a limited liability company is not easy. No simplified liquidation procedure is allowed. Therefore, before the company is closed down, there are still a lot of procedural formalities to overcome. The whole process can take many months (and in some cases years) and is associated with additional costs.
What about the S.J.S.C.? The dissolution of the company may take place through the acquisition of assets by a designated shareholder – after the adoption of an appropriate resolution of shareholders. Quickly. And effectively.
These are not the only differences between the two companies. For example, adopting resolutions by the general meeting of shareholders looks different, differences also appear when defining the place of the general meeting. We encourage you to contact us to learn more about the characteristics of both companies and thus choose the best option for you.
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