Companies registration in Poland
There are two types of capital companies operating in Poland – limited liability company (LLC) and joint stock company (JS). The difference between those companies is quite important from the legal and accounting point of view. Joint stock company is usually used by companies with a significant number of shareholders and public companies (traded on the stock exchange or ASO), whereas limited liability company is used by both SME as well as large enterprises. At joint stock company the minimum share capital is 100k PLN (which amounts to appx. 23,4k EUR or 25k USD). Regardless of the market importance of the join stock companies, the limited liability company is the most famous one. Let’s focus on the most important points (some of them will also be applicable to joint stock enterprise).
1. Share capital & liability
The minimum share capital at the LLC company is just 5k PLN (€1,2k). Share capital is the amount up to which the company is liable to (with exceptions). Share capital may be increased at any time by: (i) issuing new shares to existing or new shareholders, or (ii) by increasing the nominal price of existing shares. It is also important that the minimum nominal price of one share is PLN50 and when raising its’ value it cannot be an integer.
2. Companies’ bodies
Shares are held by company’s shareholders who constitute the most important body at LLC – Shareholders meeting deciding on most significant matters at company, including election of the Management Board and Supervisory Board (the latter one is not obligatory to be elected unless the share capital amounts to 500k or there are more than 20 shareholders).
The scope of shareholders meeting obligations is defined by Commercial Companies Code and might be additionally adjusted in the Articles of Incorporation. Some obligations might me moved to Management Board or to Supervisory Board.
Management Board is the one that executes day-to-day activities and represents the company. Members of the management board are chose by Shareholders Meeting for a cadency of at least 1 year. Members of the Management Board are liable for it’s actions both inside the company (before shareholders and Supervisory Board, if the latter exists) as well as outside – if they will commit a crime (294KSH) or will occur the gross negligence in their actions against the company’s interest.
3. Setting up a Limited Liability Company
LLC company might be set up in two ways – traditional and electronic. We will shortly define both ways and underline the most important parts.
Traditional way of setting up a company is used in Poland for a few decades, when commercial companies code has been adopted (and its’ former predecessor). This way requires preparing custom Articles of Incorporation (AoI) signed by company’s shareholders between the notary public. Such AoI shall be filed to the relevant District Court together with a set of court’s forms (so called KRS forms). The court’s fee is PLN600. The procedure held by the Court takes even up to 1,5 month.
The second way of setting up a LLC company is the electronic way which was introduced to polish law just few years ago and it very appreciated by SME. Electronic way takes just 24hours (!) and the court fee amounts only to 350PLN.