At the end of November, the government’s proposal for an amendment to the Commercial Companies Code (KSH) (UD152) was submitted to the Sejm. It is intended as another stage in organizing the post-implementation landscape following the mandatory dematerialization of shares, which took effect on 1 March 2021. The reform introduced a uniform and more secure model for the trading of shares. However, as indicated in the explanatory memorandum to the proposal, practice has revealed numerous organizational pitfalls and problems with companies’ performance of their basic obligations.

One of the key challenges remains the lack of registration of certain shares issued before 2021. Under the current regulations, share certificates issued by companies expired by operation of law on 1 March 2021. However, share certificates retain evidentiary value, enabling a shareholder to prove vis-à-vis the company that they hold shareholder rights for a period of five years from the date the act implementing mandatory dematerialization entered into force. Consequently, the evidentiary value of share certificates was to be maintained until the end of February 2026. In view of difficulties encountered by companies in fulfilling their obligations in this respect, the bill would extend the evidentiary validity of share certificates by a further two years, until the end of February 2028. In this way, shareholders would not lose the ability to prove their rights in this manner.

In addition, the bill proposes strengthening oversight of compliance with dematerialization obligations. In particular, the entity maintaining the shareholders’ register must be registered in the National Court Register (KRS), and management boards will be required to report both the conclusion and termination of the relevant agreement within seven days. This will enable the registry court to initiate enforcement proceedings more swiftly against companies that fail to maintain the register properly. Consent for entry in the register is to be submitted in a form allowing unequivocal verification of identity, to prevent the forgery of signatures and the acquisition of shares from unauthorized persons. The proposal also expands the catalogue of data collected in the register (for example this will now include the PESEL number), while at the same time introducing a rule that sensitive information will not be made available to other shareholders.

The aim of the bill is also to resolve disputes surrounding the registered pledge over shares. The amendment would clarify the relationship between an entry in the pledge register and an entry in the shareholders’ register. The establishment of a pledge is to result from  entry in the pledge register, while  entry in the shareholders’ register would be merely declaratory in nature in this respect.

As a rule, the bill is to enter into force twelve months after promulgation, while the provisions concerning the evidentiary value of share certificates are to enter into force on 28 February 2026.