HOW TO SET UP A LIMITED LIABILITY COMPANY IN POLAND?
A limited liability company is a very popular form of running a business among entrepreneurs. This is not surprising, because this legal form provides many benefits. The advantage of a limited liability company is primarily the lack of liability of partners for the company’s obligations. The company itself is liable for the obligations of a limited liability company with all its assets. Only in the event that enforcement against the company’s assets proves ineffective, the members of its management board may be liable. However, a member of the management board may release himself from liability in cases regulated by art. 299 § 2 of the Commercial Companies Code. However, the liability of shareholder is generally excluded and can only arise in several specific situations, clearly indicated in the Commercial Companies Code.
Who can set up a limited liability company?
A limited liability company can be established by one or more persons for any legally permissible purpose, unless the law provides otherwise (e.g. a joint-stock company is required to run a bank). Both natural persons and legal persons can be shareholders. However, it should be remembered that a limited liability company cannot be established solely by another single-member limited liability company.
Foreign persons (natura lor legal) from member states of the European Union and the European Economic Area may undertake and conduct business activities in the territory of the Republic of Poland on the same terms as Polish citizens. This means that these persons may:
- be a sole proprietorship (sole trader) and run a business activity) or set up any type of company,
- provide cross-border services,
- establish a branch or representative office (agency).
Excluding other cases specified in applicable legal provisions, foreigners other than those listed above have the right to undertake and conduct business activities only in the form of:
- a limited partnership,
- a limited joint-stock partnership,
- a limited liability company,
- a simple joint-stock company and a joint-stock company,
- as well as to join in such companies and/or acquire their shares or stocks, unless international agreements provide otherwise.
Methods of establishing a limited liability company
A limited liability company can be established in two ways. In a traditional form by concluding the Articles of Association with a notary or completely electronically using a template of the Articles of Association provided by the IT system calles s24 (the agreement is concluded and signed via the Internet).
In the case of foreigners, the company is most often established by signing the Articles of Association in the form of a notarial deed. This is primarily due to the fact that foreigners in most cases do not have a qualified electronic signature or the so-called ePuap signature. The latter signature is a so-called trusted profile, which is a method of confirming identity in the systems of public entities in Poland. However, establishing a company via the Internet will not always be possible – especially if shareholders want to adapt the Articles of Association to their own needs (e.g. a specific investment) or in the event of making non-cash contributions.
After signing the Articles of Association, the company registration process is always carried out electronically.
Stages of establishing a limited liability company
The following are required to establish a limited liability company in Poland:
- conclusion of the Articles of Association;
- contribution by shareholders to cover the share capital, and in the event of taking up a share at a price higher than the nominal value, contribution of the surplus;
- appointment of the management board;
- establishment of a supervisory board or audit committee, if required by law or the the Articles of Association;
- entry in the register of entrepreneurs.
The Articles of Association of a limited liability company
In order to establish a limited liability company, you must first draw up and sign the Articles of Association. In each case, the Articles of Association must contain at least the elements indicated in Article 157 of the Commercial Companies Code, otherwise the court will refuse to register the company in the register of entrepreneurs.
The correct formulation of the provisions of the Articles of Association of a limited liability company is of a great importance at the stage of its establishment, which is why it is worth seeking advice from lawyers when creating it.
The Articles of Association is also a basic means of regulating the rights and obligations and the principles of the company’s operation. A properly constructed Articles of Association allows you to protect the interests of shareholders, e.g. in the event of a conflict in the company. This is especially important in a situation where there are two shareholders in the company, and each has 50% of the shares.
As we have already written above, a limited liability company can be established in the traditional way or through the s24 system (online). If you decide on the traditional way, the Articles of Association must be concluded in the form of a notarial deed. Further registration of the company in both cases takes place electronically.
So-called „a limited liability company in organization” is established upon conclusion of the the Articles of Association. At this stage, the company can start operating, i.e. acquire rights and incur liabilities, but for this purpose, the comany must obtain a tax number NIP and statistical number REGON.
Establishing bodies in a limited liability company
To register a limited liability company, it is also necessary to establish the company’s bodies.
Every limited liability company must have a management board, which is authorized to represent the company. It may include both persons who are partners of the company or persons from outside their group. The management board may consist of one or more members.
However, the establishment of a supervisory board or audit committee is not mandatory in a limited liability company. The exception applies to companies in which the share capital exceeds PLN 500,000 and there are more than 25 shareholders. In these companies, a supervisory board or audit committee must be established.
Entry into the register of entrepreneurs
The last stage of setting up a limited liability company is entry into the register of entrepreneurs. Registration always takes place electronically via one of two electronic systems (the choice of system depends on whether the Articles of Association was signed by at notary’s office or via s24). Each time, the company registratio into the register of entrepreneurs must be accompanied by appropriate documents. These include in particular: the Articles of Association; a statement of all members of the management board that the share capital has been paid in full or a list of shareholders with their surname and first name or company name and the number and nominal value of shares of each of them.
The company’s management board reports the formation of the company to the registry. The application must be done with the court competent for the company’s registered office.
The application for company registration is subject to a fee. In the traditional procedure, it is PLN 600.00.
Registering a limited liability company online via the s24 system
As mentioned above, in addition to the traditional way of setting up a company, a limited liability company can be established and registered via online system calles ”s24”. This procedure allows you to complete all formalities related to establishing a company via Internet, without leaving your home. This procedure is certainly faster than the traditional one. What’s more, a visit at the notary’s office is not required, which helps reduce costs. The court fee will also be lower. Instead of PLN 600.00, you have to pay PLN 350.00.
On the other hand, registration via s24 limits shareholders in shaping the content of the Articles of Association, as it only allows you to choose options clearly indicated in the system s24 and use only the available Articles of Association’s template. Therefore, there is no possibility of regulating issues related to, for example, increasing capital or inheriting shares. The system s24 will not allow you also to make a contribution in the form of a non-cash contribution.
Procedure of setting up a limited liability company via the s24 system differs slightly from the traditional mode. Registration in this mode requires, as a rule, that each shareholder (and each person who is signing the application) to set up an account in the eKRS system and additionaly having qualified electronic signature or a trusted ePuap signature.
The name of the s24 system may suggest that the company registration process will take 24 hours, but in practice this process usually takes several business days.
Deadline for registering a company in the register of entrepreneurs
The formation of a company should be reported to the National Court Register within 6 months from the date of conclusion of the Articles of Association at the notary’s office. Otherwise, after this period has elapsed, the Articles of Association is terminated.
In the case of a company established through s24, this period is 7 days from the date of signature of the agreement by the last shareholder.
r.pr. dr Alicja Olszar-Lucca
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