Dematerialisation of shares independently of coronavirus

by Jarosław Kamiński

14 April 2020

The act of 31 March 2020 on specific steps to prevent and combat COVID-19, which makes up a part of the so-called anti-crisis shield legislation package, does not amend the deadline for dematerialisation of shares in joint-stock companies and partnerships limited by shares, so please remember about that obligation.
 
Starting from 1 January 2021all shares in document form will expire. That is why, the appropriate steps should be taken as soon as this year.

How to dematerialise

The act provides for two methods of dematerialisation of corporate shares. One of them is to register the company/partnership with the securities deposit, the other is to register the shares in electronic shareholder register.
 
By 30 June 2020each private joint-stock company (spółka akcyjna) and partnership limited by shares (spółka komandytowo-akcyjna) must conclude an agreement for keeping the shareholder register or for registration of shares with the securities deposit with an entity authorised to keep securities accounts (e.g. a brokerage firm). The company/partnership must also request that its shareholders place their shares in the company’s registered office. This change affects also public companies whose shares are not publicly traded.

Decision on concluding the agreement with the authorised entity must be made at the general meeting of shareholders. The entity which will keep such a register must be named in the resolution.

Requests to shareholders

The company must five times request that its shareholders deposit their shares in the company’s registered office. The first request must be made by 30 June 2020 and the last by 31 October 2020. The request must be published on the company’s corporate website, which every joint-stock company must have since 1 January 2020. Once the company obtains the shares from the shareholders, it should issue relevant confirmations of receipt to them.

It is crucial to fulfil the above obligations this year. Otherwise, the act stipulates a penalty of PLN 20,000 and criminal liability for company’s management board members for failure to so.

We offer professional support throughout the process. We assist in selecting the right entity to keep the register, in negotiating contractual terms with it and in the preparation of all the necessary documents related to the process.

More on dematerialisation of shares: https://www.youtube.com/watch?v=MfEjUr7_XGA