corporate | In Principle

The recent amendment to the Commercial Companies Code introduces a number of important changes for companies, especially companies operating within corporate groups. This raises the question of whether companies should adapt their corporate documents to reflect these changes.

Until now, the obligation to comply with the EU economic sanctions regime has arisen directly from the EU regulations, in particular Regulation 833/2014 and Regulation 765/2006 containing restrictive measures against Russian and Belarusian entities, but violation of bans has not been subject to fines. This situation should change, as a bill on special solutions to prevent the support of aggression against Ukraine and to protect national security is being taken up in the Polish parliament.

24 February 2022, the day when Russian troops unlawfully invaded the territory of Ukraine, proved to be the beginning of a test of European solidarity, and of the resilience of the European economy. On a macro level, a huge question has arisen: Can the European economy function without eastern markets? At the micro level, businesses are faced with dilemmas of how to deal with counterparties from that region, particularly in the context of existing long-term contracts at an advanced stage of completion.

Recent amendments to the AML/CFT Act regarding obligated institutions and reporting of beneficial ownership information to the Central Register of Beneficial Owners have expanded the catalogue of obligated institutions and introduced specific requirements they have to meet.

In the case of an increase in the share capital of a limited-liability company, a shareholder subscribing for new shares or an increased par value of existing shares must file a declaration on subscribing for the new shares or the increased par value. This applies to both an existing shareholder and a new shareholder just joining the company. But there are some uncertainties associated with this obligation.

It will probably be only months before legislation on corporate groups, also known as the holding law, enters into force in Poland. The proposal is considered to be the most sweeping change in the Commercial Companies Code in the last two decades.

A limited-liability company is represented by its management board. The right of the management board to represent the company covers all actions, including entering into contracts, court actions, making declarations, accepting declarations, etc. It cannot be restricted. However, the management board cannot represent the company in its dealings with a member of the management board.

Aleksandra Drożdż explains the liability for binding instructions that the parent company will be able to issue to its subsidiaries under the proposed provisions of the holding law.

On 2 September 2021, a government bill to amend the Commercial Companies Code and other acts was submitted to the Sejm for a first reading. Among other things, the bill would introduce new principles into the Polish legal system in the form of a holding companies law, regulating the cooperation between parent companies and their subsidiaries. The rules for liability of management board and supervisory board members are also to be amended, vesting broader powers in supervisory boards to make corporate governance more effective.

According to the government bill to amend the Commercial Companies Code, a parent company could issue binding instructions to a subsidiary if justified by the interest of the corporate group and not barred by specific regulations. The new powers of a parent company are balanced by provisions regulating its liability for injury caused in connection with issuing binding instructions.

With the growing popularity of video games, the game development industry is booming on a global scale. The outbreak of the coronavirus pandemic only accelerated this process. The unwavering demand for video games is generating an increase in interest in investing in entities involved in production and distribution of games.

1 July 2021 marks an important day for all entities subject to entry in the commercial register in Poland. On that day, the long-announced and repeatedly postponed revolution in registration proceedings came into force, and now businesses can submit applications to the National Court Register (KRS) only electronically.