Why are we afraid of the simple public limited company (PSA)?

The simple joint-stock company (PSA) is a relatively new legal form that was introduced into the Polish legal system only in 2021. Its main purpose is to make it easier to do business, which can be particularly useful for young entrepreneurs and StartUp’s (including technology StartUps, dealing with AI or GameDev, among others).

Despite its many advantages, the PSA raises some concerns and uncertainties among potential founders. Therefore, we encourage you to read a summary created with the help of Open AI Chat GPT and Google Gemini, as well as a commentary by our expert to allay your doubts.

Commentary by Open AI Chat GPT and Google Gemini

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The Simple Public Limited Company (PSA) is a relatively new legal form with the associated low popularity. The lack of long-standing legal practice can lead to uncertainty for potential entrepreneurs about the interpretation of the rules and their application in real business situations. In addition, the PSA is less well-known among the public than traditional legal forms – such as the limited liability company (Ltd.). This can make it difficult to establish business relationships and gain the trust of partners.

Low share capital

A PSA requires a minimum share capital of just £1. For many entrepreneurs, this may seem too low, raising concerns about the company’s financial credibility in the eyes of contractors and investors. It also raises the potential risk of abuse – the low barrier to entry and high flexibility of this type of business may encourage abuse by rogue shareholders.

Flexibility in shaping shareholder relations

PSAs offer a high degree of flexibility in shaping shareholder rights and obligations. This can lead to misunderstandings and conflicts, especially when there are more shareholders.

A simple public limited company is an advantageous solution for start-ups

Low cost of incorporation and financial security

Setting up a PSA is cheaper than a limited liability company due to the low share capital. In addition, as with a limited liability company, the shareholders of a PSA are only liable for the company’s obligations up to the amount of their contributions.

Flexibility in management and the opportunities offered by a PSA

A PSA offers greater flexibility in the management of the company, which can be beneficial for rapidly growing businesses. In addition, a simple PSA allows for liability insurance and capital raising in the form of issues.

Simpler procedures and growing popularity

A PSA requires simpler registration and operational procedures, which speeds up the process of setting up and running a business.

Did you know that you can set up a simple limited company through the S24 portal today? Simply use the service: https://ekrs.ms.gov.pl/s24/strona-glowna

Legal and institutional support

Public institutions offer various support programmes for entrepreneurs, including those who opt for a PSA in addition to the creation of numerous platforms and portals that support the management of PSAs, offering tools and services adapted to this legal form.

General meetings in PSAs – modern solutions and shareholder facilitation – expert commentary

General meetings in a Simple Public Limited Company (PSA) are innovative solutions that significantly facilitate the shareholder decision-making process. PSA, as a legal form introduced in Poland, focuses on flexibility and modernity, which is also reflected in the organisation of general meetings.

Facilitation of Minutes of General Meetings

One of the key facilitations introduced by PSAs is that general meetings do not need to be minuted by a notary public, which is standard in traditional joint stock companies. The only exception to this is resolutions concerning amendments to the articles of association, which require minutes to be taken by a notary public. This is a significant convenience that reduces the costs and formalities of general meetings.

Variety of Voting Forms

The PSA offers a wide range of solutions for the organisation of general meetings, both onsite and online. Shareholders can vote at the general meeting, but also outside the meeting, either in writing or using electronic means of communication. This flexible approach enables shareholders to participate in votes regardless of their location, which is particularly important in this age of digitalisation and globalisation of business.

Minutes and Documentation

The resolutions of the general meeting in the PSA are recorded in the minutes, which include information on the correctness of the convening of the meeting, its capacity to adopt resolutions and the resolutions themselves. The minutes shall be accompanied by evidence of the convening of the meeting, the attendance list and the list of shareholders voting electronically. Resolutions should be signed by those present or at least by the chairman and the person drawing up the minutes. Shareholders furthermore have the right to inspect the minute book and to request certified copies of the resolutions.

Share capital in a PSA

One of the most important features of the PSA, which has already been highlighted by OPEN AI Chat GPT and Gemini, is the very low required share capital of just £1. This is a significant convenience for young entrepreneurs and startups that do not have a lot of financial resources. The share capital can be covered by both monetary and non-monetary contributions, such as shares in another company, movable property (e.g. a car, office equipment) or even the provision of labour or services. Furthermore, the amount of share capital is not set in the articles of association, which gives additional flexibility in managing the company’s finances.

Shareholders’ register and supervisory board

The shareholder register in a PSA can be maintained by a notary public or an entity authorised to maintain securities accounts. This is an important convenience as it ensures the security and integrity of the data contained in the register. The register is kept in electronic form, which facilitates access to information and share management.

The supervisory board, on the other hand, is an optional body, meaning that its establishment is not mandatory. This flexible approach allows the governance structure of the company to be adapted to the specific needs of the entrepreneur. The company’s articles of association may provide for the establishment of a supervisory board, but it is not required.

How to establish a simple joint-stock company?

There are several legal forms of companies in Poland, such as a limited liability company (sp. z o.o.), general partnership, limited partnership and the simple joint-stock company (PSA) discussed above. Each of these forms can be incorporated in two ways: traditionally or online. To set up a company online, simply use the website: https://ekrs.ms.gov.pl/s24/

What information will you need to set up a PSA?

1. details of the shareholders

1. Individual:

• first and last name
• PESEL
• address of residence / address for service
• e-mail address

1. Sp. k:

• name
• KRS no.
• address for service
• address for service of the general partner
• information on the manner of registration of the company (via S24 / traditionally)
• e-mail addresses of the partners

2 Company details

1. Name
2. Registered office + registered office address
3. Amount of share capital
4. Nominal value per share
5. Information on the distribution of shares between the natural person and the sp.k. and amount of contributions
6. Information on the financial year (whether it coincides with the calendar year)
7. PKD + object of the predominant activity
8. Duration of the company (definite/indefinite)
9. Manner of representation
10. Information regarding the management board, i.e:

• how many persons the management board may consist of (e.g. 1 to 3),
• Names, PESEL numbers and addresses for service of persons making up the management board
• function of the individuals on the board (chairman/member of the board)
• the term of office of the board member,

1. Information on whether a supervisory board is to be appointed. If yes:

• information on the number of RN members
• full names, PESEL numbers and addresses for service of the members of the Supervisory Board
• function of individual members of the Supervisory Board (chairman/member)
• Term of office of the RN member

1. Information as to whether a resolution is required to commit the Company to provide services with a value of twice the Company’s share capital,
2. Whether the company is to have any branches

The Simple Joint Stock Company is a modern legal form that adapts to the needs of modern business by offering flexibility and facilitation of general meetings. Thanks to the possibility of voting in writing or electronically, as well as the absence of the need for minutes to be taken by a notary public (with the exception of resolutions to amend the articles of association). In addition, the low required share capital, the flexibility in covering it, the possibility for a notary to keep the shareholders’ register and the optionality of the supervisory board are just some of the advantages of PSAs. These features make the simple joint stock company an attractive option for entrepreneurs seeking efficient and cost-effective solutions.

Regulations cited in Art:

• Art. 300(80) [Shareholder resolutions].
• Art. 300(100) [Minutes].
• Art. 300(3) [Share capital].
• Art. 300(31) [Tasks of the shareholder registrar].
• Art. 300(52) [Management board, board of directors].

Sources:

www.biznes.gov.pl/pl/portal/00168