In one of our articles from the #compliance series, we discussed the issue of reporting obligations of capital companies regarding the obligation to prepare financial statements.
In today's post, we would like to present the obligations of the shareholders' meeting (general meeting of shareholders) regarding the approval and submission to the appropriate registers of the financial statements for the financial year ending on 31 December 2023.
It is worth emphasizing that the Minister of Finance did not extend the deadline for approving the annual financial statements this year, therefore the annual statements for the 2023 financial year should be approved no later than 6 months from the balance sheet date, i.e. by 30 June 2024, if the financial year coincides with the calendar year .
Approval of the financial statements in a limited liability company
Convening of the ZZW by the board members
To properly approve the financial statements, management board members should first convene an annual shareholders' meeting (" AGM "). There are several ways to notify shareholders of the upcoming AGM. Management board members can do this by:
- registered letters or courier deliveries – it is worth remembering to correctly determine the partner’s delivery address and personal details, because the partner’s notification is effective if it is sent on time and with the correct details;
- e-mail, provided that all partners have given their prior written consent and provided their e-mail address.
The final way to notify a shareholder of the upcoming AGM is to deliver the notice in person, within the appropriate deadline. Management board members should ensure that the shareholder acknowledges receipt of the notice.
Deadline for sending notifications about the upcoming AGM to shareholders
Management board members should notify shareholders of the upcoming AGM at least two weeks before the shareholders' meeting. Otherwise, convening the AGM without the deadline and then adopting resolutions at it opens the door for shareholders to challenge the resolution.
We know from experience that many of our clients have problems with correctly calculating the deadline for notifying shareholders of the upcoming AGM, so we provide an example below.
If the management board members have scheduled the AGM for June 15 this year, notifications to shareholders should be sent no later than June 1 this year.
Subject of the Annual General Meeting of Shareholders
The subject of the ZZW in accordance with Article 231 § 2 sections 1-3 of the Commercial Companies Code should be:
- consideration and approval of the management board's report on the company's activities and the financial statements for the previous financial year;
- adopting a resolution on the distribution of profits or coverage of losses, if, in accordance with Article 191 § 2, these matters have not been excluded from the competence of the shareholders' meeting;
- granting discharge to members of the company's governing bodies for the performance of their duties.
Minutes are taken of the Annual General Meeting. At the Annual General Meeting, shareholders adopt resolutions. In addition, the minutes of the Annual General Meeting are accompanied by an attendance list of all shareholders, indicating their addresses and the number of shares held. Following the conclusion of the Annual General Meeting, the financial statements, the management board's report on activities, and the resolutions approving the financial statements and the resolution on profit distribution or loss coverage must be submitted to the financial document repository. The documents should be filed with the National Court Register by July 15, 2024.
Approval of the financial statements in a limited liability company in which the Supervisory Board was established
If a limited liability company meets the requirements specified in Article 64 of the Accounting Act, then the financial statements are additionally subject to audit by a certified auditor.
Furthermore, if a Supervisory Board has been established in a limited liability company, then, pursuant to Article 219 § 6 of the Commercial Companies Code, the Supervisory Board is obliged to notify the statutory auditor who audited the Company's financial statements at least one week in advance.
Supervisory board meetings are convened via invitations, which specify the date, time, and location of the meeting, the proposed agenda, and the method of using remote communication during the meeting. Invitations may also be sent by email, which may also include a link to the meeting.
The Management Board is obligated to prepare information for the Supervisory Board regarding the company's financial situation, staffing, and development plans. The Management Board is obligated to submit to the Supervisory Board a proposal regarding the distribution of profits or the coverage of losses within the Company.
The Supervisory Board is obliged to prepare a Supervisory Board report before the meeting, containing an assessment of the financial statements, the Management Board's report on the company's activities, the Management Board's motion with a proposal for covering the loss or distributing the profit, and an assessment of the current situation of the Company.
The Supervisory Board should adopt four resolutions regarding:
- assessment of the Company's financial statements;
- assessment of the Management Board's report on the Company's activities;
- assessment of the Management Board's motion with a proposal regarding loss coverage or profit distribution;
- approval of the Supervisory Board report;
Procedure for convening the General Assembly
The convening of the AGM in a limited liability company with a Supervisory Board follows the same procedure as described above. The difference is that the management board is obligated to present the company's financial statements to the shareholders. If the statements were subject to an auditor's opinion, the auditor's opinion , the management board's report on the company's activities, and the management board's proposal regarding the coverage of losses or the distribution of profits, are attached.
In addition, at the AGM, the Supervisory Board is obligated to present the Supervisory Board report containing the assessments referred to above (point ad). The AGM adopts the following resolutions:
- consideration and approval of the Company's financial statements,
- consideration and approval of the management board's report on the Company's activities,
- distribution of profits or coverage of losses,
- granting discharge to members of the Management Board,
- granting discharge to members of the Supervisory Board.
After the AGM meeting, the financial report, the management board's report on the company's activities, the resolutions approving the financial report and the resolution on the distribution of profit or coverage of loss must be submitted to the repository of financial documents.
Approval of the financial statements in a joint-stock company
The approval of the financial statements in a joint-stock company should be approved at the annual general meeting of shareholders (" AGM "), which should be held within 6 months of the balance sheet date, i.e. by 30 June 2024, if the financial year coincides with the calendar year .
Meeting of the Supervisory Board with the participation of the auditor
Pursuant to Article 382 § 7 of the Commercial Companies Code, the Supervisory Board is obliged to notify, at least one week in advance, the key statutory auditor who audited the financial statements of the date of the Supervisory Board meeting, the subject of which will be the adoption of the Supervisory Board report, which includes:
- evaluation of the financial statements,
- assessment of the management report on the company's activities,
- assessment of the Management Board's request with a proposal to cover the loss or distribute the profit,
- assessment of the current situation of the Company,
- assessment of the management board's performance of the obligations referred to in Article 380 (1) of the Commercial Companies Code
- assessment of the manner in which the management board prepares or submits to the supervisory board information, documents, reports or explanations requested in accordance with the procedure specified in Article 382 § 4 of the Commercial Companies Code;
In order for the Supervisory Board to effectively adopt resolutions regarding the assessment of the documentation described above, the management board is obliged to submit to the Supervisory Board the financial statement, the management board’s report on the company’s activities, the management board’s motion with a proposal for covering the loss or distributing the profit before the meeting of the Supervisory Board .
Annual General Meeting of Shareholders
After concluding the Supervisory Board meeting with the expert, the management board should convene the Annual General Meeting. It should be noted, however, that if the management board fails to convene the Annual General Meeting on time, the Supervisory Board is authorized to convene the meeting. Company shareholders should be notified by:
- the announcement made through the Court and Economic Monitor (" MSiG ") – at least three weeks before the date of the AGM. A notification made without following the procedure for announcing the notification in the MSiG may constitute grounds for appealing against the resolution;
- sending notifications by registered mail or courier, at least two weeks before the date of the AGM;
- sending the notification by e-mail to the shareholder who has given written consent, to the e-mail address entered in the register of shareholders;
The announcement in the MSiG should include the date, time and place of the annual general meeting and a detailed agenda.
On May 12, 2023, a significant change to the maximum fee for an announcement or notice came into effect. Therefore, the fee for placing an announcement or notice in the Ministry of Economy and Economy cannot exceed 20% of the minimum wage established pursuant to the Act of October 2022 on the Minimum Wage. Therefore, the current cost of an announcement cannot exceed PLN 848.40 (the minimum wage in 2024 is PLN 4,242.00).
Subject of the AGM
The subject of the AGM, in accordance with Article 395 § 2 of the Commercial Companies Code, is:
- consideration and approval of the management board's report on the company's activities and the financial statements for the previous financial year,
- adopting a resolution on the distribution of profits or the coverage of losses,
- granting discharge to members of the company's governing bodies for the performance of their duties.
The financial statements should also include an auditor's opinion. The Supervisory Board is also required to submit a Supervisory Board report to the Annual General Meeting, which includes:
- evaluation of the financial statements;
- assessment of the management report on the company's activities,
- assessment of the Management Board's request with a proposal to cover the loss or distribute the profit,
- assessment of the current situation of the company,
- assessment of the management board's performance of the obligations referred to in Article 380 (1) of the Commercial Companies Code
- assessment of the manner in which the management board prepares or submits to the supervisory board information, documents, reports or explanations requested in accordance with the procedure specified in Article 382 § 4 of the Commercial Companies Code;
Minutes are taken of the AGM. At the AGM, shareholders adopt resolutions regarding:
- consideration and approval of the company's financial statements,
- consideration and approval of the management board's report on the company's activities,
- distribution of profits or coverage of losses;
- granting discharge to members of the Management Board;
- granting discharge to members of the Supervisory Board.
In addition, the attendance list is attached to the minutes of the AGM.
After the conclusion of the Annual General Meeting, the financial report, the management board's report on the activities and the resolutions approving the financial report and the resolution on the distribution of profit or coverage of loss must be submitted to the repository of financial documents. The documents should be submitted to the National Court Register by 15 July 2024.
We hope we've provided you with a better understanding of the financial statement approval process for limited liability companies and joint-stock companies. If you have any questions or concerns, please contact us.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of March 27, 2024
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