The new regulation reforms the Polish Commercial Companies Code to an extent never seen before, implementing a foreign-inspired model of a private limited company with as many as 134 new articles. The main assumption of the Simple Shareholding Company is to make it easier for entrepreneurs operating in the innovation sector to set up and run their businesses as startups. But does this mean that only startups will benefit as a S.J.S.C.?
Where did the idea for a S.J.S.C. come from?
The introduction of a new type of capital company into legal trading was motivated by the need to adapt the Polish legal system to the needs of a dynamically developing and diverse economic sector based on the use of new technologies and innovations. Especially that the role of companies operating based on new technologies is increasing along with more intensive progress of widely understood digitalization. S.J.S.C. is therefore intended to become an alternative addressed to a specific group of entrepreneurs.
For startups…
Of course, startups are the biggest target group for the new regulation. For entrepreneurs developing their business based on ideas and innovations using the economic potential of modern technologies, especially information and communication technologies, S.J.S.C. is particularly attractive. Moreover, startups are characterized by a relatively short period of operation (usually up to 5 years) and a repeatable, scalable, and profitable business model. Apart from that, the specificity of startups is connected with running the business in conditions of high investment risk connected with the simultaneous pursuit of rapid economic growth.
It is therefore not surprising that such a specifically targeted form of business has finally seen changes in the legal environment. This does not mean, however, that only startups should consider registering their business in the form of a S.J.S.C.
…but not only
The business sector associated with technological innovation is not limited to startups. The structural flexibility of a Simple Public Limited Company makes this form have the potential to attract other business models. An SPV (Special Purpose Vehicle) can also be formed. This is a special purpose vehicle that is an independent commercial law entity set up to carry out a specific venture (economic purpose).
In addition, joint ventures may be included in S.J.S.C. It assumes the joint creation of an economic entity by two or more independent enterprises that intend to implement a specific project or a common goal.
First of all, a capital company
As the name S.J.S.C. may also suggest, the regulations constituting it are intended to be a simplified variant of a capital company, allowing a high degree of freedom in shaping its internal framework by its shareholders. On the one hand, this is supposed to correspond to the dynamics and, in some cases, to the relative short-term character of the above-mentioned types of enterprises. On the other hand, it is supposed to be an encouragement and an additional option for entrepreneurs who decide on a legal form of a capital company and are not fully comfortable with the character of a limited liability company and a joint-stock company.
In comparison with other capital companies, the solutions adopted on the grounds of S.J.S.C. regulations stand out significantly. First of all, it is possible to make a contribution to the company in the form of work or services. Another significant advantage is the freedom of shaping the organizational structure of the company’s bodies and clarified principles of responsibility of their members. Its structure assumes resignation from the institution of share capital for the benefit of the share capital of minimum PLN 1. In addition, the new form of a company may include shares without a nominal value. S.J.S.C. also provides the possibility of taking advantage of a simplified liquidation procedure and the digitalization of many formal procedures concerning the functioning of the company. The new regulation also corresponds to changes in the Code provisions on transformations. They liberalize the rules of conducting the transformation procedure, which facilitates the change of the existing legal form to S.J.S.C., and vice versa.
Taking into account the above advantages, this new form of company is very attractive. Therefore, we invite you to contact us! We will be happy to verify whether the transformation of a particular enterprise will be possible. And profitable.
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