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Company thefts are becoming more frequent

The Ministry of Justice has announced amendments to the law intended to minimise the number of cases in which company owners unexpectedly lose control over their business.
The Ministry of Justice has published a draft amendment to the Act of 20 August 1997 on the National Court Register (Journal of Laws 2021, item 2106). The purpose is to prevent theft of companies. The draft amendment of the Act on the National Court Register introduces, among others, the creation of a special bulletin informing about registration of a case in the registration procedure and making an entry in the National Court Register.
In May 2022, when the new regulations come into force, they are to be in line with digitalization and will not prolong the waiting time for registration applications of honest entrepreneurs.
This is because it is most often the case that thefts are committed by outsiders. They simply forge documents and submit them to the registration court. The court, unaware of the fraud, makes an entry. Although the fraudster has no access to the company’s office, he can now prove his credibility and enter into contracts on behalf of your company without your knowledge. With an entry in the KRS, he can prove his credibility to various people – banks, contractors. He can easily sell the property belonging to the company, take the money and disappear.
Thefts of companies also happen more and more often in special purpose vehicles established by, for example, developers. It is becoming a market standard to create companies just to build one housing estate and sell premises in it. Legal protection of such companies, including the level of interest of the parent company in the affairs of its daughter company, often leaves much to be desired. In some cases, the rightful owner learns about the change of all shareholders and management in the register several months after the event.

National Court Register Bulletin

How does the ministry want to solve the problem of illegal takeovers of companies? It will create a newsletter of the National Court Register. Thanks to it, entitled persons will be automatically informed about the attempt to change the data in KRS. They will receive such information even before the application for entry in the register is examined or the decision becomes final.
The changes in the regulations of the Ministry of Justice are a step in the right direction, but business owners should still remain vigilant. There are several things you can do to protect your business from fraud:

  • regularly check the status of your business on the Registry Court Finder,
  • monitor current court proceedings on the court of record portal,
  • request confirmation from the court that no changes have been made to the company’s register.

This procedure takes a long time because of many weaknesses in the system – from identity verification, to unethical behaviour of some lawyers, to organisational weaknesses in the KRS departments themselves.
The new legislation is a good start, but we must be proactive to protect our businesses from fraudsters. Be vigilant and take action, if you suspect someone may be committing fraud, contact the court of registration and the police immediately.
Some law firms offer a service to monitor changes in the court registry maintained for companies to provide protection against fraudsters. With the introduction of the solution proposed by the Ministry of Justice, ongoing monitoring of the status of changes in the register will be more widespread and accessible to those companies that cannot use the specialized services of law firms.