A few days ago, the Polish parliament completed legislative work on a draft law amending the Commercial Companies Code and certain other acts, the provisions of which introduce a new type of capital companies to the legal market - Simple Joint-Stock Company (P.S.A.). The new law was passed to the President for signature. We wrote about the intention of the legislator to pass these regulations last year:
The reason for the amendment was the need to introduce to the Polish legal system a new form of a company allowing for easier access to the market of the so-called startups, whose activity is based on the implementation of projects in the field of new technologies and information processing, i.e. primarily in the IT sphere. Such projects are characterized by innovativeness, a relatively short period of their implementation, a greater risk of failure, but also higher, in the case of success, a return on investment. The existing forms of companies, ie mainly limited liability companies (sp z o.o.) and joint-stock companies (S.A.), due to the lack of flexibility of legal regulations regarding their creation, operation and liquidation, did not take into account the significant features of startup projects and limited development of this sector of the economy.
According to the final wording of the new provisions of the amending act, P.S.A. distinguishes itself from other capital companies with the following features:
1. The ability to quickly set up a company and the lack of barriers to entry to the market:
- the option of quick registration of the company via the Internet (s24 system),
- minimum amount of share capital - PLN 1,
- shares may be acquired in exchange for cash or non-cash contributions, in particular in the form of a job or service provision.
2. High flexibility in the management of the company and its operation:
- the ability to choose a company management model between traditional management board and the option of appointing a board of directors, including in itself at the same time, the features of the management and supervisory body. The latter model is based on solutions existing in Anglo-Saxon countries and is new to the Polish legal order,
- the possibility of adopting resolutions by means of electronic mail or during video conferencing,
- the change in the share capital does not require the form of a notarial deed,
- lack of the status of a public company, and what is connected with it - no restrictive obligations regarding stock trading, which, however, does not exclude the possibility of the company entering the stock exchange through transformation into S.A.
3. Simplified liquidation of P.S.A .:
- shortened in relation to sp. o.o. and S.A. period of liquidation (in principle - up to 3 months),
- the possibility, instead of liquidation, of the shareholder's acceptance of the company's assets and obligations with the court's consent. In this case, the company will have to substantiate that such a reception will not harm the creditor or the company's shareholders.
If the Act is signed by the President, the new provisions will come into force on March 1, 2020.
It is worth mentioning, that for IT start-ups are created beneficial tax relieves.
First of them is tax relief for Research and Development activity (R&D). It introduces a possibility of deducting from tax base costs burden for R&D activities (so- called qualified costs). Although, the deducted amount cannot be higher than tax income of taxpayer.
Second solution is preferential tax rate for innovation activity (so- called IP Box). According to tax law, incomes from sale of produced IP laws referred in income tax acts can be taxed by rate 5% of its income. However, many conditions shall be fulfilled to benefit this preference, for instance keeping R&D records.
Third solution is a possibility to use 50% of tax- deductible costs in salaries for employees which are participating in the creation of a new product.
All mentioned tax relieves encourage to invest in innovation in Poland. However, all mentioned preferences required previous preparation and positive tax- ruling.