Shareholders’ agreement – practical issues concerning the regulation of the company’s rules outside its articles of association
What must the articles of association of a limited liability company contain?
The provisions of the Code of Commercial Companies list certain minimum issues that should be regulated in the limited liability company’s articles of association. The Code of Commercial Companies requires that the articles of association of a limited liability company always determine:
· the business name and registered office of the company (city);
· the objects of the company (PKD);
· the amount of the share capital;
· whether it is permissible for a shareholder to hold more than one share;
· the number and nominal value of shares taken up by each of the partners;
· the duration of the company, if definite.
In a situation where an in-kind contribution is made to the company, the articles of association should specify in detail the subject of this contribution, the name of the shareholder making the in-kind contribution, as well as the number and nominal value of the shares taken up in return.
In addition, the articles of association should also include: the rules for the operation of the company's management board, the arrangements for a quorum or majority for the adoption of certain resolutions by the shareholders' meeting or at management board meetings, so as not to leave these issues to general statutory regulations.
Can the company’s operating rules be partly defined outside the articles of association?
However, not all shareholders’ arrangements concerning the functioning of the company must be included in the articles of association of the limited liability company itself. It is worth considering regulating certain principles of the company's operation outside the content of the articles of association. The text of the articles of association of limited liability company is attached to the application for entry of the company into the register of entrepreneurs of the Polish Court Register. The company's registration files are public, so anyone (including a competitor) may become familiar with the provisions contained in the articles of association. Often, the shareholders’ arrangements concern sensitive or confidential business matters (especially financial ones) or are related to the investment plans of the limited liability company, which the shareholders’ prefer not to disclose to third parties. For this reason, it is worth including these arrangements in the shareholders' agreement, which is not submitted to the KRS files. Often, such an agreement imposes an obligation of confidentiality on the shareholders, so that the part of the shareholders’ arrangements regulated in the agreement are known only to them.
Form of agreement of shareholders of a limited liability company
The shareholders' agreement may, in principle, be concluded in any form and it is only up to the shareholders of the company which form they choose. In practice, the written form with notarized signatures is quite often used due to the certainty that this form gives as to the time and identity of the people signing the document. However, there are no obstacles for the shareholders' agreement to be concluded in ordinary written form, as well as in the form of a notarial deed.
Sometimes, however, the conclusion of a shareholders' agreement may require a special form. Such a situation will occur when the agreement includes provisions that require a form other than the ordinary written form to be effective, e.g. a statement on voluntary submission to enforcement regarding certain amounts is included.
In practice, the agreement very often stipulates contractual penalties in the event of a shareholders’ failure to fulfil the obligations imposed on him, the payment of which is to compensate for the consequences of the shareholders’ breach of the concluded agreement. The payment of the contractual penalty stipulated in the shareholders' agreement can also be effectively claimed in court.