What to look out for when re-registering your company
For the past six months, I have been writing quite a bit about incorporating companies in 2001, given the numerous changes in Polish law. Now that 2001 is here, it's time to consider what to do if you already have an incorporated company.
As of Jan. 1, the procedures for incorporating companies in Poland changed with the introduction of the Act on the National Court Register (KRS). Although the Act provides for a grace period, all companies incorporated before Jan. 1, 2001, will ultimately need to re-register in the new KRS. Due to the breadth of the Act, we will only focus on when and what you need for re-registration.
The main idea of the Act is to create a new register that will not only contain information on corporations, but also on several types of public enterprises, commercial partnerships and entities (including non-profit organizations that conduct businesses as a side activity). In other words, one-stop-shopping for your corporate information needs.
One of the primary advantages is that all information in the KRS will be available electronically. Unfortunately, this does not mean that you should throw away your train schedule showing connections to Jelenia Gora or some other far-flung registry court. The KRS will include information only on those companies recorded in the new register. You will still need to travel to a registry court to obtain information about a company registered there, but not yet re-registered in the KRS.
Also, the KRS (and any extract or certificate) will only provide data that has been entered into the register, but not give you access to the company's documents attached to the registry court's files. Therefore, if you need to check amendments made to the articles of association of your potential business partner, you should still go to the appropriate court and review the file there.
Technically, corporations have until Dec. 31, 2003 to re-register in the KRS. Practically, though, most companies will be re-registering significantly earlier. If nothing happens to require new information in your company's existing commercial register (no changes in the management board or the articles of association), you may refrain from re-registering your company in the KRS until the 2003 deadline.
The procedure for re-registration is relatively simple. As a first step, you will need to fill out an application for registration in the KRS. The official form should be available in any registry court. You should note that the Act requires more information when applying for registration than was required previously, such as home addresses of management board members and a company's NIP number. Next, you must submit the application to the registry court that currently maintains your company's commercial register. This court will transfer the application, along with your company's files, to the new registry court. Assuming that your application is complete and correct, your company should be recorded in the KRS.
Life being as it is, no one assumed that the old registry courts would finish everything by the end of last year. In fact, the Act specifies what to do in this transitional period. If you still have not received a court decision on a pre-January application, then your submitted registry changes will be reviewed by your old court in accordance with the previous statutes. These changes will be made to your company's existing commercial register. The old registry courts have been given a deadline of June 30, 2001 to wrap up all pre-Jan. 1 matters. After June 30, any outstanding matters should automatically be transferred to the new registry court and reviewed in accordance with the Act. If this happens, you should be prepared for a request by the new registry court to provide some additional information.
Let's say that your very dynamic company submitted an application before Jan. 1 regarding an amendment to its articles of association, but your old registry court has not yet reviewed it. Now you need to submit a new application because one of your officers has received a well-deserved promotion to the management board. Where do you go with the new application? If your old registry court is still reviewing your earlier application, you should submit this new one to your old registry court. When you do this, all pending matters (including that application from last year) and the company's files should be automatically transferred to the new registry court. This court should review all pending matters in accordance with the Act and register the company in the KRS.
Finally, for all of you procrastinators (or more politely, very busy people) out there, I propose one more scenario. Let's say that you have not anticipated making any changes in the near future to your company's commercial register, and have not yet filed for re-registration in the KRS. Unfortunately, circumstances suddenly change and you need to file an application to record new information immediately. Although the Act does not clearly state what we should do in this case, the seemingly logical way to handle this situation would be to submit to the old registry court an application with the new information to be recorded, along with an application for re-registration of your company in the KRS. The old registry court should transfer all of your company's files to the new registry court, which should record your company and the new information in the KRS.
Ultimately, there are no rules imposing fines or other penalties for failing to re-register by June 30, 2003. The only penalty for laggards is a fee for the re-registration application (free of charge when filed timely).
As a final note, you should bear in mind that until your company is re-registered in the KRS (but not later than Dec. 31, 2003), the previous entries in the commercial register remain valid. In practice, this means that you will still be able to obtain extracts from the old commercial register and that the extract is still effective as an official document.
This article has been prepared by Lejb Fogelman, the managing partner of Hunton & Williams' Warsaw office, with the assistance of Dorota Przelaskowska, an associate attorney.
