Changes relevant to commercial companies
The amendment to the SARS-CoV-2 coronavirus speculative law announced on March 31, 2020 (the so-called " anti-crisis package") regulates 2 very important issues related to business conducted by companies. The first is to allow remote meetings to be held by shareholders and for companies to pass resolutions in this form. The second is the postponement of the deadline for the preparation and submission of companies' financial statements.
Anti-crisis package
The so-called anti-crisis package (a.k.a. the anti-crisis shield) consists of 3 laws, namely:
- Law on Amendments to Certain Laws in the Health Care System Related to the Prevention, Prevention, and Suppression of COVID-19(March 31, 2020, item 567).
- The Law on Amending the Law on Special Solutions for Preventing, Counteracting and Combating COVID-19, Other Infectious Diseases andCrisis Situations Caused by Them, and Some Other Laws(referred to as the Anti-Crisis Law, Journal of Laws of March 31, 2020, item 568);
- Law on Amendments to the Law on the System of Development Institutions(March 31, 2020, item 569).
Online shareholder meetings
The aforementioned amendment to the law added a new Article 234(1) to the current Commercial Companies Code, which stipulates that participation in a shareholders' meeting may also be taken by means of electronic communication, unless the company's articles of association provide otherwise. Participation in a shareholders' meeting in the manner referred to in the first sentence shall be decided by the convener of the meeting. This provision, which has been introduced and is already in force, is intended to significantly facilitate, in the era of the prevailing SARS-CoV-2 coronavirus pandemic, communication between persons participating in the shareholders' meeting. This is directly indicated by the content of §2 of the aforementioned regulation, which stipulates that participation in the meeting specifically includes real-time two-way communication between all persons participating in the shareholders' meeting, whereby they may speak in the course of the proceedings while in a place other than the venue of the shareholders' meeting. At the same time, the provision indicates that holding a shareholders' meeting online refers to shareholders acting in person and shareholders who have appointed a proxy for this purpose.
Importantly - the enacted provision stipulates that remote meetings of shareholders will be the default solution, the exclusion of which requires an amendment to the company's contract or articles of association. This means that commercial companies, the articles of association or articles of association of which do not contain any regulation relating to the possibility of holding meetings via electronic means of communication, may also hold their meetings in this form.
It should be mentioned, however, that the amended regulations simultaneously require the adoption of appropriate bylaws specifying, among other things, how shareholders (or their proxies) are to communicate and the voting process itself. However, the bylaws may not specify requirements and restrictions that are not necessary to identify shareholders and ensure the security of electronic communications. The bylaws themselves are adopted by the company's board of directors, or in the absence of such a board, by the company's shareholders. Adoption of the bylaws by a resolution of the shareholders may take place without a meeting, if shareholders representing an absolute majority of votes agree in writing to the content of the bylaws.
As a side note, it should be noted that already before the enactment of the aforementioned amendment, on the basis of Article 227 §2 of the Commercial Companies Code, it was possible for the company's shareholders to carry out voting in electronic form (i.e., while maintaining the documentary form). This is also made possible by Article 78(1) §2 of the Civil Code, i.e. the provisions on secure electronic signature.
The amended provisions of the speculative law do not specify how the meeting is to be held using electronic communications. This means that shareholders can hold the meeting and adopt relevant resolutions at it by video or teleconference. In the era of available means of communication such as WhatsApp or Skype, such a form of holding a meeting should not cause major problems. However, it is important to remember to use secure forms of communication, i.e. those that will ensure the security of the transmitted / transferred data.
Postponement of deadline for submission of financial reports
Prior to the amended legislation, commercial companies had to prepare their financial statements by the end of March, approve them by the end of June, and send them to the National Court Register no later than July 15. The provisions of the current specust Law do not explicitly indicate that the deadline for companies to prepare and approve their financial statements has been extended. The specustawa, in Article 15, stipulates that in the event of the declaration of an epidemic emergency or a state of epidemics, the minister responsible for public finance, by regulation, may set other deadlines for fulfilling this obligation. On March 31, 2020, the provisions of the Specust Law came into effect, and the minister subsequently issued a regulation, which came into effect on the date of its promulgation.
Regulations in the regulation indicate 2 deadlines for postponing the approval of financial statements. The first deadline is 2 months for entities subject to the Financial Supervisory Commission, and the second is 3 months for other entities. In other words, this means that entities under the supervision of the Financial Supervisory Commission must approve their financial statements by the end of August 2020, and other entities by the end of September 2020. Submission of financial documents to the repository (in practice, to the National Court Register) will therefore be able to take place no later than October 15, 2020. However, this does not apply to entities under the supervision of the Financial Supervision Commission - these entities are required to submit documents no later than September 15, 2020.
Despite the changes made and the postponement of the deadlines, it should be remembered that the company's board of directors is required to convene a shareholders' meeting by the end of June, which means de facto that it cannot postpone the approval of the financial statements themselves. This follows from Article 231 § 1 of the Commercial Companies Code, according to which an ordinary shareholders' meeting should be held within six months after the end of each fiscal year, and from Article 53 § 1 of the Accounting Law, which stipulates that the annual financial statements are subject to approval no later than six months after the balance sheet date. It should be remembered that the failure of a member of the management board to convene a shareholders' meeting or a general meeting in violation of the law constitutes a violation of the law and is punishable by a fine of up to PLN 20,000.00 (so Article 594 § 1(3) of the Commercial Companies Code relating to torts committed by members of the management board).
Therefore, is it possible to avoid the above situation in any way - yes, there is such a possibility. The solution is, for example, to convene a shareholders' meeting, then suspend the pending deliberations and resume them at a time when it will be possible to adopt a resolution on the approval of the company's financial statements.