NEWSLETTER

No. 11, October 2021

Malinowski & Associates. Legal Advisors. Partnership

Table of contents

Changes in the law of commercial companies

New holding law

The government has submitted to the Sejm a bill to amend, among other things, the Commercial Companies Code, proposing to regulate legal issues related to groups of companies.

We will henceforth refer to a group of companies as a parent company and its subsidiary company or companies guided by a common economic strategy to pursue a common interest, justifying the parent company’s exercise of unified management over its subsidiary or subsidiaries.

The draft implies the introduction of the principle that the parent company and the subsidiary are to be guided not only by the individual interests of the company, but also by the interests of the group of companies, as long as this is not to the detriment of the creditors or minority shareholders of the subsidiary.

Group of companies provisions will not apply to subsidiaries that are public companies and companies in liquidation or bankruptcy.

Creation of a group of companies

Interestingly, for one to speak of a group of companies, it is not enough for there to be a relationship of dependence between the companies. In addition, the shareholders’ meeting (general assembly) of the subsidiary will adopt a resolution on participation in the group of companies with the designation of the parent company, passing by a ¾ majority. The parent company does not have to pass any resolution.

Information about participation in the group will be disclosed by the companies in the business register of the National Court Register.

Binding orders

The parent company will be able to issue a binding order to a subsidiary in writing or electronically (under pain of invalidity), regarding the conduct of the company’s affairs, if it is justified by the interests of the group of companies.

The instruction should include the expected behavior of the subsidiary, the interest justifying the instruction, the expected benefit or damage to the subsidiary, and the expected timing and manner of remedying such damage.

Implementation of such a binding order requires a resolution of the subsidiary’s board of directors. The subsidiary should refuse to comply with the order if, as a result of its execution:

1. Company may become insolvent
2. There is a concern that the order is contrary to the company’s interests and will cause damage to the company that will not be repaired by the parent company or another subsidiary within the next two years (applies only to a company that is not a sole proprietorship).

The contract or articles of association of the subsidiary may also provide for other grounds for refusal to comply with the order. The effectiveness of such provisions depends on the parent company’s repurchase of either the shares or the shares of those shareholders of the subsidiary who do not agree to the change.

A member of the board of directors, supervisory board, audit committee and liquidator of a subsidiary and parent company shall not be liable to the subsidiary for damage caused by the execution of a binding order.

The only entity liable for damage caused to a subsidiary as a result of the execution of a binding order is the parent company, unless it is not at fault. If the subsidiary is a sole proprietorship, liability is limited to the situation where the execution of the order resulted in the insolvency of the subsidiary.

A parent company that, as of the date of issuance of a binding order, holds directly or indirectly a majority of at least ¾ of the voting power of a subsidiary company shall be liable to a shareholder of that company for a reduction in the value of his shareholding, if the reduction was a consequence of the execution of a binding order.

The parent company will also be liable to a creditor of the subsidiary if enforcement against the subsidiary proves to be ineffective, unless the parent company is not at fault or the damage was not caused by the execution of a binding order. The damage is presumed to include the amount of the unsatisfied claim.

Supervision of subsidiaries

The supervisory board (if not established, the board of directors) of the parent company exercises constant supervision over the implementation of the interests of the group of companies by the subsidiaries, unless otherwise provided for in the subsidiary’s charter or agreement.

Forced repurchase of shares or stocks

Up to once per fiscal year, shareholders representing no more than 10% of the subsidiary’s share capital may demand that the agenda of the shareholders’ meeting include the adoption of a resolution on the compulsory repurchase of their shares by the parent company, which represents directly or indirectly at least 90% of the subsidiary’s share capital.

The shareholders’ meeting of a subsidiary may also pass a resolution on the compulsory buyout of shares (stocks) of shareholders representing no more than 10% of the share capital by a parent company directly representing at least 90% of the capital. The subsidiary’s articles of association may provide that the right of redemption is vested in the parent company holding less than 90% of the shares, but not less than 75%.

Termination of participation in a group of companies

A subsidiary ceases to be a member of a group of companies as a result of a resolution of the shareholders’ meeting, adopted by a ¾ majority of votes, or by the parent company’s declaration to the subsidiary that it is no longer participating in the group of companies.

Formalization of board resolutions

Currently, resolutions of the board of directors of a limited liability company do not require any special form. The draft amendment to the Commercial Companies Code calls for the introduction of mandatory minutes of board resolutions, while specifying the minimum content of the minutes. If the changes take effect, such minutes will resemble those of a shareholder’s meeting, including the agenda, the names of board members present and the number of votes cast for each resolution, as well as dissenting opinions and their motives. At a minimum, the minutes will be signed by the board member presiding over the meeting or managing the vote, unless the articles of incorporation or bylaws of the board of directors provide otherwise.

Similar regulations have been introduced in the provisions on the simple joint-stock company and the joint-stock company.

Broadening the powers of the supervisory board

If a supervisory board is established in a limited liability company, in addition to the statutory duties currently in effect, the board will be required to submit an annual report on its activities to the shareholders’ meeting.

In addition, in order to carry out its duties, the supervisory board will be able to require the management board, proxies, persons employed by the company to prepare or submit any information, documents, reports or explanations concerning the company. The addressee of the request will be obliged to respond to the supervisory board within two weeks from the date of the request.

The supervisory board will be able to establish ad hoc or standing committees, consisting of board members, to perform specific supervisory activities.

The company’s articles of association will be able to authorize the board of directors to adopt a resolution to have a certain issue concerning the company’s operations examined at the company’s expense by a selected advisor to the board. The advisor may be an entity with the knowledge and qualifications necessary to investigate such a matter, ensuring the preparation of a fair and objective audit report.

The project involves formalizing the organization of supervisory board meetings. Meetings will be convened by invitations, which must specify the day, time, place and proposed agenda, as well as the use of means of direct remote communication. During the meeting, the council may adopt resolutions on matters not included in the agenda, if no member of the council objects. Like the shareholders’ meeting, the supervisory board can also meet without formal convening if all members agree and do not object.

In addition, if the company’s financial statements are subject to audit, the supervisory board will be required to notify the auditor of the date of the meeting to evaluate the reports. Notice should be given at least one week in advance. The company should ensure that the auditor or other representative of the audit firm attends this meeting.

Similar regulations have been introduced in the provisions on the simple joint-stock company and the joint-stock company.

Changes in the management-supervisory board relationship in a joint stock company

The board of directors in a joint-stock company will be obliged to inform the supervisory board (without summons) about the resolutions it adopts, the situation of the company, the progress of the company’s set business directions and transactions that materially affect the company’s assets. The indicated information should be provided to the supervisory board in writing at each meeting. The Articles of Association may exclude or limit the indicated information obligations.

The conclusion of a transaction by a joint-stock company with a parent, subsidiary or affiliated company, the value of which, when aggregated with transactions with the same company during a fiscal year, exceeds 10% of the company’s total assets, requires the approval of the supervisory board, unless the articles of association provide otherwise.

Traffic changes

 

New regulations on. education and employment of professional drivers

On October 14, 2021, the Parliament passed a law amending the Road Transport Law.

From the entry into force of the amendment, an application for a driver’s certificate will additionally have to be accompanied by a copy of a driver’s qualification card issued in a European Union member state with a current entry of code 95, or a copy of a driver’s license issued in an EU country with such a code. As a reminder, we are just pointing out that code 95 in the driver’s license is confirmation of the qualification of a professional driver.

A tool called the “professional driver profile” has been introduced, which contains a set of data describing the person applying for the entry of code 95 in the driver’s license, the issuance of a professional qualification certificate and driver qualification card, as well as medical and psychological examinations. The profile will be required to join the professional driver qualification.

A new document, called a “driver qualification card” confirming eligibility to work as a driver, will be established for a person who cannot be issued a driver’s license with a code 95 entry.

Currently, a driver who holds a category D or D+E license until the completion of 23. year old may only be employed in the operation of regular passenger transportation on lines of communication on a route not exceeding 50 km. The age census will be lowered to 21 in this case.

New situations in which a police officer will stop a driver’s license

A government bill amending the traffic law has been approved for consideration by the Sejm.

The catalog of situations justifying the detention of a driver’s license by a police officer will be expanded – a driver’s license will be detained if the driver performs road transport in a vehicle equipped with a tachograph by a driver who does not have his own valid driver’s card or record sheet, the driver uses a card or record sheet that is not his own, or the driver uses tools that allow the alteration of data recorded by the tachograph.

Increase in fines for traffic offenses

The above law also provides for an amendment to the misdemeanor code, raising the upper limit of the fine for certain offenses from PLN 5,000 to PLN 30,000. This applies to Chapter XI offenses against traffic safety and order, i.e. all traffic offenses. It is worth noting that the maximum fine in mandated proceedings for traffic offenses will also be increased – to PLN 5,000.

In addition, the lower limit of the fine that will be adjudicated for failing to give precedence to a pedestrian or overtaking in lanes will be PLN 1,500. Similarly, if the speed limit is exceeded by more than 30 km/h. If within two years prior to the date of the offense, the offender has already been validly punished for such an offense, the fine may not be less than PLN 3,000. Violation of the overtaking ban will result in a fine of no less than PLN 1,000, while a repeat violation will result in a fine of PLN 2,000. Driving without a license will be punishable by a fine of no less than PLN 1,000 and a mandatory driving ban.

In the mandate procedure, the maximum fine for failure to indicate, at the request of an authorized body, to whom one entrusted a vehicle to drive or use, is PLN 8,000.

If the punished person pays the amount of the fine directly to the officer who imposed it, the amount of the fine will be reduced by 10%.

More penalty points and extension of the period after which points “reset”

The maximum number of penalty points per violation will be increased from 10 to 15 points. The information on the number of points will no longer be removed after 1 year from the date the fine became final, and after two years, subject to payment of the fine. If the driver does not refuse to accept the fine, the points can be removed after one year from the date of the violation.

Vehicle insurance rates dependent on owner offenses

Insurance companies will receive and process information on drivers’ traffic violations and the number of penalty points received for the purposes of pricing and insurance contracting.

eTIR – faster customs procedure

The United Nations Customs Convention on the International Transport of Goods under cover of TIR carnets introduced a new procedure – the so-called “eTIR procedure,” implemented through electronic data exchange, which is the equivalent of the TIR carnet.

If the changes are adopted by UN countries, the TIR carnet holder will be able to declare his intention to place goods under the new procedure. From the moment this declaration is accepted by the competent authorities, eTIR will be the legal equivalent of an accepted TIR carnet.

Ultimately, the new regulation is expected to shorten customs procedures at national borders.

Periodic reduction of rates on toll roads

By a decree of the Council of Ministers, the rates of electronic toll for driving 1 kilometer of a national road or its section of class A, S, GP and G were periodically changed – up to 70% of the rates. This includes highways (A – including A1, A4), expressways (S – including S1) and selected national roads (GP and G). The reduction is effective from October 1, 2021 to December 31, 2021.

Delivery of summons to conclude PPK agreements via PUE ZUS

With the amendment to the Shield, the legislator introduced – during the period of the epidemic emergency or epidemic state and for a year after their cessation – the possibility of serving summonses for the conclusion of a contract for the management of Employee Capital Plans through the teleinformation system provided by the Social Insurance Institution (PUE ZUS).

A summons so delivered shall be deemed effective upon receipt by the addressee or upon the expiration of 14 days after the summons is posted on the information profile, if the summons is not received.

Therefore, we encourage you to regularly check your profile on the Social Security Electronic Services Platform.

Limitation on compensation for recovery costs

On September 30, 2021, the Supreme Court in the case of III CZP 37/20 adopted a Resolution under which it determined that a claim for compensation for recovery costs based on the Law on Prevention of Excessive Delays in Commercial Transactions is determined under the general statute of limitations, i.e. Art. 118 of the Civil Code, rather than on the basis of the statute of limitations provided for the main benefit.

This means that the compensation, which ranges from 40 to 100 euros (depending on the value of the benefit), will be time-barred three years from the due date (i.e., from the date of the interest entitlement). This is interesting in that it can lead to a situation in which the main claim is time-barred earlier than the claim for compensation – such a situation will occur, for example, in the case of a sales contract (since claims under a sales contract are time-barred after two years).

Increase in the minimum wage

As of January 1, 2022, the minimum wage will be PLN 3,010, while the minimum hourly rate will be PLN 19.70.