A guide to establishing and operating a limited liability company (sp. z o. o.) in Poland

The limited liability company is the legal form of a company formed by one or more persons/entities, called shareholders, who are liable for the obligations of the company to a limited extent. This is common form of running business in European countries. Limited liability company, apart from sole proprietorships, is the most popular form of conducting business activity in Poland currently. This legal form, with significantly low minimum capital requirements (minimum of PLN 5000 share capital – approx. euro 1150), allows to run business with relatively low risk. 

To create limited liability company in Poland in the conventional way (not via internet) the following elementary steps must be concluded*:

• company’s contract (also referred to as articles of association or articles of incorporation) must be concluded in the form of a notarial deed;
• a company has to be registered in the National Court Register (upon conclusion of the company’s contract);
• once registered, the company must open a bank account.

* There is a possibility to create a limited liability company online. However, this method is limited to basic contract templates only and requires additional obligations to be met (the appointment of an attorney with a PESEL number, for instance). In order to protect the interests of the shareholders and the future company to the maximum extent by conclusion of comprehensive company’s contract, we recommend conclusion of the company’s contract and registration of the company in the traditional manner (in the form of notary deed). 

The company’s contract must be concluded in the form of a notarial deed.

Upon conclusion of the company’s contract by notarial deed, a company has to be registered in the National Court Register. To have this done, several court motions need to be populated and executed by members of the Management Board (of the new company) or by a proxy. Additional statements of all members of the Management Board must always be attached to the court motion. 

Limited liability company consists of two obligatory and one facultative body:

• Shareholders meeting – the highest authority in a limited liability company.

The duties of the shareholders’ meeting include adopting resolutions on the matters specified in the articles of association and in the Polish Commercial Code, i.a:

1. examination and approval of the management board’s annual reports on the company’s activities, financial statements for the previous financial year and granting a vote of acceptance to members of the company’s governing bodies for the performance of their duties;
2. decisions concerning claims for redress of damage inflicted at the time of establishing a company or exercising management or supervision;
3. disposal and lease of the enterprise or its organized part and establishment of limited property right thereon;
4. acquisition and disposal of real estate, perpetual usufruct or share in real estate, unless the articles of association provide otherwise;
5. return of additional contributions;
6. conclusion of an agreement between the parent company and the subsidiary providing for the management of the subsidiary or the transfer of profits by such company.

The annual shareholders’ meeting should be held within six months after the end of each financial year. An extraordinary meeting of shareholders shall be convened in the cases specified in Polish Commercial Code or in the articles of association, as well as when the bodies or persons authorized to convene meetings deem it advisable. 

• Management Board – executive body of limited liability companies, whose main task is to manage the affairs of the company and its representation. The manner of operation of the management board is regulated by the provisions of the Polish Commercial Code and the articles of association of a limited liability company. 

Main information related to Management Board:

1. consist of one or more members;
2. members may be appointed from among the shareholders or from outside the shareholders;
3. generally, member of the Management Board is appointed and dismissed by a resolution of the Shareholders meeting, unless the articles of association provide otherwise.
4. a member of the Management Board may be dismissed at any time by a resolution of the shareholders meeting unless the articles of association provide otherwise;
5. member of the Management Board is entitled to manage the affairs of the company and to represent it (applies to all the company’s judicial and extrajudicial actions). The right of a board member to represent the company cannot be restricted with legal effect towards third parties. 
6. if the management board consists of more than one person, the manner of representation is specified in the articles of association. If the articles of association do not contain any provisions in this regard, two members of the management board acting jointly or one member of the management board acting together with a holder of a proxy are required to make binding declarations on behalf of the company. 

• Supervisory board – an optional body in a limited liability company (the articles of association may establish a supervisory board or an audit committee or both).

In companies where the share capital exceeds 500,000 PLN and there are more than twenty-five shareholders, a supervisory board or an audit committee must be established.

A share capital of the limited liability company should amount to at least PLN 5000:

50. the nominal value of a share cannot be less than PLN 50.
51. the company’s share capital is divided into shares of equal or unequal nominal value. The articles of association state whether a shareholder may have only one or more shares. If a shareholder can have more than one share, then all shares of should have equal value and are indivisible. 
52. if the contribution to the company in order to cover shares is to be in whole or in part a non-cash contribution, the articles of association should specify in detail the subject of the contribution and the shareholder making the contribution, as well as the number and nominal value of the shares taken up in exchange.

The company must have an official address.

We recommend that companies be registered at the address where correspondence will be received. The company can be registered at the virtual office address. 

Formal change of the company’s address during its operation is relatively simple and inexpensive procedure, however, it requires filing an appropriate application to the National Court Register.

Please be informed that Moore Polska Sp. z o.o. offers address’ services for the companies. 

According to polish law, core activities of the company have to be indicated in both – the company contract and National Court Register. 

There is a closed catalog of types of business activity set in the Polish legal system, that can be conducted by entrepreneurs called the “Polish Classification of Business Activity”. A browser of such codes together with a description of each activity (also in English) can be found at the following address https://​www​.biznes​.gov​.pl/​e​n​/​t​a​b​l​e​-​p​k​d​-​c​ode .

While registering the limited liability company, company’s activities have to be indicated (in both company’s contract and court motions to National Court Register). The National Court Register lists a maximum of ten objects of activity of the company. 

This catalogue, as other details mentioned above, may be changed in the future by relatively non-complex and rather low-cost procedure.

* We might be provided with description of anticipated activities of the future companies upon which relevant classification from the national catalogue will be proposed by us.

A limited liability company cannot be formed solely by another single-member limited liability company.

A limited liability company can be formed solely by one shareholder (individual). At that point following rules apply: 

1. the sole shareholder exercises all the powers vested in the shareholders’ meeting in accordance with the provisions of Polish Commercial Code (provisions thereof on the shareholders’ meeting shall apply mutatis mutandis);
2. shareholder’s statements to company have to be made in writing, unless otherwise provided by law;
3. shareholder is subject to Polish social security system by a default.

In accordance with Polish law, when registering a company each Member of the Management Board of the company and each shareholder of the company is obliged to designate its own address for service. If aforesaid address is designated outside of EU, such Member/shareholder is obliged to appoint a proxy for services’ purposes located in Poland. 

When it comes to the shareholders who are not individuals – not such shareholder itself but representatives of such shareholder(s) are obliged to designate such address within EU or if address is outside EU – appoint a proxy for services’ purposes located in Poland.

The usual and most convenient practice is to designate as the address for service the address of the newly established Polish company.

In accordance with Polish law, conducting or receiving payments connected with the business activity by the company shall be done through its bank account. Thus, conclusion of bank account agreement is necessary to thrive. 

*Moore Polska sp. z o.o. may offers services related to opening a bank account by the company (as proxy services). 

Shareholders may participate in a shareholders meeting by means of electronic communication, unless the articles of association provide otherwise. Participation in the meeting of shareholders in the manner referred to in the first sentence is decided by the person calling the meeting. 

The supervisory board or, if there is no such board, the shareholders shall determine, in the form of bylaws, detailed rules for participation in the meeting of shareholders by means of electronic communication. The bylaws must not set requirements and limitations to participate in such meeting that are not necessary for identifying shareholders and ensuring the security of electronic communication. 

The assignment of a tax identification number (“NIP”) and National Official Register of Economic Entities number (“REGON”)* occurs automatically upon registration of the company in the National Court Register. This assignment is free of charge and is not subject to any announcements. 

What is important, the company, within 21 days from the date of registration in the National Court Register, is obliged to submit an identification declaration with supplementary data on form NIP-8 to the tax office (This is additional information, such as a bank account number or place of business).

Moreover, taking into account the regulations of the social insurance system act, the notification (on form NIP-8) should be made within 7 days from the date of employing the first employee or from the date of establishing a legal relationship justifying the inclusion of the first person in the pension and disability insurance.

Due to the Polish AML’s requirements, the newly created company is also obliged to register the beneficial owner in the Central Register of Beneficiaries (CRBR). The registration must be made within 7 days from the date of company’s registration in the National Court Register. 

*REGON is a register kept by the President of the Central Statistical Office mainly for statistical purposes.

The registration of the company in the National Court Register does not automatically make it a VAT payer (a separate registration in the tax office is required).

Registration for value added tax applies to companies independently performing economic activity as producers, traders, service providers, including entities acquiring natural resources, farmers.

The registration as a VAT taxpayer is obligatory for a company which:

• the value of its sales in the previous year exceeded the amount of PLN 200.000;
• sells goods or services listed in the polish VAT Act (!!).

The application should be submitted to the tax office:

• before the date of first sale of goods or services subject to VAT, or
• before the day on which the Company lose the right to exemption, i.e. after exceeding the limit of PLN 200,000 net sales value during a tax year.