Shares for in-kind contributions after abrogation of Article 336 of the Commercial Companies Code

Due to the amendment to the Commercial Companies Code (hereinafter: the CCC), paper share certificates expired by operation of law as of 1 March 2021, and their place was taken by electronic equivalents, recorded in the shareholders’ register. Along with this much-commented amendment, the legislator introduced less popular modifications to the code, including the abrogation of Article 336 of the CCC. With the abrogation of the said article, the question arises whether this affected shares for in-kind contributions? Does this legislative amendment result in their complete elimination from the Polish legal system or only in the modification of their significance?

Types of shares

Shares are securities with a specific nominal value that demonstrate the property rights of shareholders and confirm their share in the company’s assets. There are many categories and subcategories of shares. The basic statutory division can be found in Article 334 § 1 of the CCC, according to which shares may be registered shares or bearer shares. The code also includes other types, including ordinary shares and preference shares as well as voting shares and non-voting shares.

Shares for in-kind contributions are the shares subscribed in exchange for an in-kind contribution, which is nothing other than a non-cash contribution to the company. These shares must be paid for in full before the company is registered.

Amendment to the CCC on 1 March 2021

Dematerialisation of shares applies to limited joint-stock partnerships, joint-stock companies and simple joint-stock companies. From the very beginning, the dematerialisation procedure was focused on one major objective – increasing the security of trading in shares of non-public companies. To this end, the legislator set 1 March 2021 as the expiry date of paper share certificates. From that moment on, shares have the form of an entry in the shareholders’ register.

Prior to their dematerialisation, bearer shares were sold by transferring the share certificate to the buyer, while the sale of registered shares required an additional written statement on the transfer of ownership to the buyer. After the amendment, apart from the exceptions indicated in the code, the sale of both types of shares takes effect only when an appropriate note is entered in the register.

Shares for in-kind contributions

With the introduction of dematerialisation, the legislator abrogated Article 336 of the CCC, which provided that the shares subscribed for in-kind contributions should remain registered shares until the approval of the financial report for the financial year in which such shares have been paid for. During the period until approval, such shares could not be transferred or pledged. Additionally, during that period, such shares were retained by the company as security for claims for damages for failure to make in-kind contributions or defects in the contributions. The provision also gave priority to these claims over non-privileged claims. In accordance with the exclusion in § 3 of the article, it did not apply to shares subscribed for as part of an increase of the company’s share capital which, in connection with the fact that the company sought such shares to be admitted to trading on a regulated market, were to be dematerialised.

The abrogation of the said article significantly changed the institution of sharers for in-kind contributions. The possibility of shares for in-kind contributions as bearer shares was allowed. As a result of the amendment discussed above involving the dematerialisation of shares, companies have gained a tool in the form of a shareholders’ register to which they have unlimited access, which allows them to identify all shareholders, including those holding bearer shares. Therefore, the justification for the shares for in-kind contributions remaining registered shares until the approval of the financial report is no longer valid.

The second important consequence of the abrogation of Article 336 of the CCC is allowing for the sale of shares for in-kind contributions before the date of approval of the financial report for the financial year in which such shares have been paid for with in-kind contributions, which was a significant obstacle to trading shares in the alternative trading system (ATS).


Jarosław Rudy

Managing Partner, Attorney at Law, Certified ATS Adviser

Jarosław Rudy

Dorota Brzęk

Trainee Attorney at Law

Dorota Brzęk