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 management board, it may have a significant adverse impact on the company’s daily business.
In order to address the needs of shareholders and members of corporate bodies, we wish to offer 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, introduced as part of the so-called “Anti-Crisis Shield” on the basis of the Act of March 31, 2020, 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 “Act”).
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).
Now, when the Act has been passed and come into force, adoption of resolutions in the manners listed above is possible 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).
Moreover, as a result of amendments to the Commercial Companies Code, introduced by the Act, 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 can also be adopted by circulation or through electronic means.
Management Board
The Act has also modified the provisions of the Commercial Companies Code as regards adoption of resolutions by management boards. It is now allowed 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).
Meetings of shareholders
Shareholders meetings may only be held in Poland, and should take place in the city/town where the company’s registered office is 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.).
The Act allows the possibility to participate in a meeting through electronic means, regardless of whether the articles of association so permit (unless the articles of association expressly exclude such option).
The following conditions apply to attendance through electronic means:
– a decision on attendance through electronic means is made by the person convening the meeting;
– the shareholders meeting notice needs to include information about the manner of participation, speaking, performance of voting rights and raising objections to the adopted resolution(s);
– real-time two-way communication needs to be ensured during the meeting, while all participants who are outside its venue must be able to speak at the meeting;
– shareholders can also participate and vote through proxies, exercising their voting rights before or during the meeting.
Detailed rules for participation through electronic means should be specified in bylaws adopted by the supervisory board (or in case there is no supervisory board in a private limited liability company – in bylaws adopted in a resolution of shareholders (which can be passed outside of a shareholders meeting).
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, while the remaining participants are allowed to communicate electronically;
– written minutes from the meeting are required.
In case of public companies, the Act also implements the obligation to ensure a real-time broadcast of a shareholders meeting.
Moreover, the Act includes provisions governing the manner in which companies receive, register and count electronic votes. These provisions will come into effect as of September 03, 2020, though.
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.
Extension of deadline for preparation and approval of financial statements in relation to CVOID-19
The Act 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.
The Act 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 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.
On March 2020, the Minister of Health issued a regulation specifying new deadlines for fulfillment of recordkeeping obligations, as well as obligations related to preparation, approval and publication of financial statements or information, and their submission with competent registries, units or authorities (Dz.U. / Journal of Laws of 2020, item 570), on the basis of which the deadline has been extended for preparation of separate financial statements, directors’ reports and consolidated financial documents of capital groups.
Pursuant to the regulation:
– the deadline to prepare annual financial statements, directors’ report, and consolidated financial statements / report on capital group operations has been extended by 3 months, i.e. they should be made within 6 months of the balance sheet date (if the financial year ends on December 31, 2019, the deadline is June 30, 2020);
– the deadline to approve annual financial statements, directors’ report, and consolidated financial statements / report on capital group operations has been extended by 3 months, i.e. they should be approved within 9 months of the balance sheet date (if the financial year ends on December 31, 2019, the deadline is September 30, 2020);
In case of entities that are supervised by the Polish Financial Supervision Authority, the aforesaid dates have been extended by 2 months.
The extended deadlines apply to obligations concerning the financial year ended after September 29, 2019, yet no later than April 30, 2020, whose due date did not fall before March 31, 2020.
The regulation came into force as of March 31, 2020.
Remuneration policy
According to the Act, in case of declaration of the state of epidemic threat or the state of epidemic, the minister competent to handle the affairs of financial institutions is authorized to issue a regulation specifying a different deadline for adoption of a resolution on remuneration policy for management and supervisory board’s members, as discussed in article 36 section 1 of 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.
In case such regulation is issued, a shareholders meeting’s resolution on remuneration policy should be adopted within the deadline specified in the regulation.
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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.
In light of the existing and planned regulations, now might be a good time to insert relevant provisions into the company’s constitutional documents, adopt the required policies or grant relevant proxies.
Our corporate law team is ready to address any questions or doubts you might have. Please feel free to contact us.
Marek Wojnar
marek.wojnar@actlegal-bsww.com
+48 601 379 610, +48 22 420 59 59
Piotr Wojnar
piotr.wojnar@actlegal-bsww.com
+48 602 660 610, +48 22 420 59 59
Janusz Szeliński
janusz.szelinski@actlegal-bsww.com
+48 501 108 468, +48 22 420 59 59
Katarzyna Góra
katarzyna.gora@actlegal-bsww.com
+48 609 255 616, +48 22 420 59 59
Aleksandra Sztajer
aleksandra.sztajer@actlegal-bsww.com
+48 731 208 274, +48 22 420 59 59
