Simple joint-stock company PSA in Poland | 2022 Report

Simple joint-stock company (in Polish: Prosta spółka akcyjna PSA) entered the Polish National Court Register on July 1, 2021. It was supposed to be a hit — a response to market trends and the needs of entrepreneurs in Poland, and what is it really like? What are the pros and cons of simple joint stock companies? How many of this kind of businesses have been opened in Poland so far?

What is a simple joint stock company?

A simple joint-stock company in Poland, or shortly PSA (from Polish name: Prosta spółka akcyjna), is the latest legal form of a commercial company, which can be established by entrepreneurs in Poland from July 2021. The features that distinguish a simple joint-stock company are:

• The required share capital in the amount of PLN 1
• No so-called frozen share capital (in PSA there is no principle of the inviolability of the share capital)
• More flexibility in the types of shares contributed to the PSA (they don’t have to be monetary)
• Possibility to appoint a board of directors, i.e. a combination of the features of the management board and the supervisory board
• Transparent procedures and greater freedom in adopting resolutions (e.g. online meetings)
• Simplified process of liquidation of the company and shortened time of the entire liquidation process to 3 months

A simple joint-stock company versus a traditional joint-stock company in Poland

It is said that PSA is a combination of a limited liability company and a joint stock company. But the truth is that a simple joint stock company has many solutions that no other company in Poland has. So it is hard to compare PSA exactly to any other commercial company in Poland. However, there is one feature that particularly distinguishes this new form of company.

What is the difference between a simple joint-stock company and a joint-stock company and limited liability company? What is most noticeable is the amount of the share capital contributed. In the case of a joint-stock company, the minimum share capital is PLN 100,000, and in a limited liability company the share capital may not be lower than PLN 5,000. One of the goals of creating a simple joint-stock company was, inter alia, enabling the establishment of a company (mainly a startup) by Polish entrepreneurs who do not have large assets at the moment, therefore the share capital of PSA is only PLN 1.

How many simple joint stock companies have been registered in Poland so far?

PSA debuted in July 2021 — during the first month of its existence, 68 companies of this type were registered in the Polish National Court Register (pol.: Krajowy Rejestr Sądowy or KRS). The next month, twice as many PSA came out. In the following months, the number of PSAs in the Polish National Court Register increased linearly, i.e. about the same number of new simple joint stock companies appeared in KRS every month.

More than a year after the debut in the Polish National Court Register with the “active” status, just over a thousand simple joint stock companies are registered in total, more precisely 1021 PSAs. For comparison, limited liability companies in Poland are currently over 468,000 and over 8,000 joint-stock companies.

In which industry do simple joint-stock companies operate in Poland? We check the PKD codes

PSA was created for start-ups from the technology industry who want to deal with, inter alia, software development. However, companies whose activity is related to programming (PKD 62.01.Z) constitute only 11.7% of all simple joint-stock companies in Poland.

5.9% of all PSAs are consulting companies, the main PKD code of which is 70.22 Z. Retail sale conducted by mail order houses or the Internet is handled by 3.6% of all PSAs (PKD code 47.91.Z). Less than 3% of PSA entered the PKD 63.12.Z code as the main code in the Polish National Court Register, i.e. the code defining the activity of internet portals. Accounting companies with the main code PKD 69.20.Z constitute less than 3% of all PSAs in Poland.

The remaining PSAs in Poland use many other PKD codes (212 PKD in total), which means that they operate in various industries — including hairdressing (PKD 96.02.Z). Therefore, it is not possible to determine that the most PSAs operate in industry X and the least in Y.

Simple joint stock company and its share capital

We have already mentioned that PSA is distinguished from other commercial companies primarily by the share capital that is required to establish a company. In the case of a Simple joint-stock company, it is only PLN 1. An interesting fact is that the share capital of PSA can be covered not only by a cash contribution, but also by non-cash ones, i.e., for example, with shares of a PSA shareholder in another company, vehicles, office equipment or real estate.

A non-cash contribution may also be a non-transferable right and the provision of work or services, which means that a shareholder of PSA may be a person who does not make a physically tangible contribution to the company. It is worth noting here, however, that PSA shares, although they do not have a nominal value, still translate into the rights of shareholders. This means that the number of shares contributed by a given shareholder will determine his “voting power” in the company.

Pros and cons of simple joint stock company in Poland

Pros of a simple joint-stock company:

• Fast and simple company registration, completely online via S24 or PRS portal.
• Share capital in the amount of PLN 1 — people who do not have hundreds of thousands of zlotys needed to contribute as share capital, e.g. a joint stock company, can decide to establish a PSA.
• Flexible capital structure, i.e. the possibility of making in-kind contributions to the company’s capital in the form of real estate or office equipment.
• Simplified company liquidation process.
• Uncomplicated stock trading.

Cons of a simple joint-stock company:

• PSA shares cannot be listed on the stock market or NewConnect.
• The low share capital of PLN 1 is both an advantage and disadvantage of PSA. The share capital brought into the company has one important purpose — it is to constitute a form of financial security for entities that invest in a given company or lend it money. In the event of problems with the insolvency of the company, the receivables are covered from the share capital. In the case of PSA, it cannot be denied that PLN 1 is not able to cover any company’s debts in the event of its bankruptcy.
• Liquidation of such bodies as the supervisory board. Instead, a Board of Directors can be established.
• Possibility of adopting PSA resolutions remotely, which may be a risk factor for the company’s security.

Who can set up a simple joint-stock company in Poland?

Can a simple joint-stock company be single-person? The answer is yes — PSA can be founded by one or more people. The partners of a simple joint-stock company may, but do not have to, run a sole proprietorship registered in CEIDG (pol.: Centralna Ewidencja i Informacja o Działalności Gospodarczej) at the same time. Moreover, a simple joint-stock company in Poland can be created not only by natural persons, but also by legal persons. One-person limited liability companies are an exception.

The first step for PSA shareholders is to sign the company contract. The contract of a simple joint-stock company is a document that regulates the rules of its operation, specifies its seat and the subject of activity. In addition, the contract must contain information about the shares and the resulting privileges.

How to set up a PSA via the Internet

A simple joint stock company can be established via the Internet. An application for entry of an entity in the National Court Register may be submitted:

• via the Polish Court Registers Portal, known under the acronym PRS from polish name: Portal Rejestrów Sądowych — however, it should be remembered that via PRS entrepreneurs can register a simple joint-stock company only when the contract of association was concluded with a notary public
• via the S24 portal, but only when the PSA contract was created on the contract template provided in S24 — in this system the contract is signed with a qualified signature or a Trusted Profile (pol.: Profil Zaufany) by all founders

Registration via the S24 system is a much faster and cheaper solution, because it does not additionally involve the need to pay for the work of the notary who prepared the PSA contract. However, this is not a solution that will suit every company for various reasons. For example, signing a PSA contract of agreement with a notary public may be a better solution if the company requires solutions that are not included in the template available in the S24 system.

It is also worth emphasizing that if the founders want to contribute non-cash capital to the company, they have no choice but to conclude a simple joint-stock company agreement with a notary public.

How much does it cost to start a simple joint-stock company in Poland?

If the contract of such a legal form of activity as simple joint-stock company was concluded with a notary public, apart from notary fees, the founders also have to pay the fee for the announcement of the entry in the Court and Commercial Gazette (pol.: Monitor Sądowy i Gospodarczy) (PLN 100), stamp duty for the power of attorney (PLN 17) and court fee in the amount of PLN 500.

With registration of PSA via the S24 system, the court fee is PLN 250. The remaining fees are the same as in the case of setting up a company by PRS portal.