11 December 2020
The share capital in the amount of 1 PLNAll
As I mentioned in my previous article, the share capital of the simple joint-stock company is a legal concept different from the share capital in the limited liability company or in the classic joint-stock company. In this post I will present in more detail the basic characteristics of this capital.
There is no legal definition of the share capital. In the simple joint-stock company it is the basic capital of the company in the minimum amount of only 1 PLN. This is a symbolic amount in comparison with the minimum share capital of the limited liability company (5.000,00 PLN) or the classic joint-stock company (100.000,00 PLN).
The asset structure of the simple joint-stock company is based on shares without their nominal value and the share capital. The shares are separated from the share capital and are an expression of membership rights in the company.
The shares of the simple joint-stock company may be covered by contributions in cash or in-kind. Contributions in kind should be divided into these that contribute to the share capital and these that do not contribute to it. This second type of contributions in-kind (like provision of work or services to the company) cannot be valued and therefore cannot be included in the company's balance sheet. Consequently, the shareholder can also be an investor who brings the unique knowledge and experienced-based work to the company and not tangible assets to cover the shares. His/her contribution cannot be valued and cannot contribute the share capital. However, it does translate into shares expressing membership rights in the company.
One of the main features that distinguish the share capital of the simple joint-stock company from the share capital of the limited liability company or the joint-stock company is its volatility. The legislator has decided that in the simple joint-stock company shareholders may obtain a return of their contribution during the company's existence. This is not permitted in the limited liability company or in the classic joint-stock company.
So, can the simple joint-stock company be a reliable contractor? The answer is: yes. The legislator has introduced mechanisms which protect the interests of the company's creditors. In my next article you will read more about these mechanisms.
As the share capital is variable, it is not presented in the Articles of Association. This means that the increase or decrease of the share capital will not require the amendment of the Articles of Association. Consequently any variation of the share capital will require less formalities, thus shall be less expensive and more flexible. The amount of the share capital is subject to registration in the National Court Register. Therefore, the Management Board should sum up the value of the contributions in-kind and in cash, excluding those not contributing to the share capital. The amount of the share capital submitted to the register includes the value of the contributions actually brought to the company (not only those which were merely declared to be brought).
11 December 2020 | Magdalena Korta-Łach
associateThe share capital in the amount of 1 PLN