Set up a Polish LLC
Step by step guide of registering a Polish limited liability company. Here you will find information how to set up a Polish limited liability company.
How to set up a Polish limited liability company?
- first step – choose an appropriate form of the company that you want to register in a trade register in Poland;
- choose name – which is available – it may not be the same as name of companies already registered in Polish National Court Register – this is a requirement if you want to open a Polish limited liability company;
- draw articles of association and decide which activities will be conducted by the company (choose PKD), state the shareholders details, appoint board members – have the articles of association prepared in a form of a notarial deed by a Polish notary (unless online incorporation);
- open a bank account and deposit share capital (if share capital is paid up by cash);
- send application to the trade register to register limited liability company in Poland in the National Court Register – PLA.partners as your company registration consultants in Poland will help you with filling out the forms and completing application;
- next step is registration of a Polish company for VAT purposes (if required).
The company may be incorporated via a notarial deed or via online registration system,
- The articles of association should specify, as a minimum:
- the business name and registered office of the company;
- the corporate purpose of the company;
- the amount of the share capital;
- whether the shareholder may hold more than one share;
- the number and nominal value of shares taken up by individual shareholders;
- duration of the company, if definite.
* the minimum share capital is PLN 5.000
* the nominal value of a share may not be lower than PLN 50;
* company’s share capital:
- is divided into shares of equal or unequal nominal value – determined by the articles of association;
- if a shareholder may hold more than one share, all shares in the share capital are equal and indivisible,
- shall be fully paid prior to the registration of the company in the National Court Register.
The Board of Directors in a Polish Limited Liability Company can consist of one or more individuals. The members of the board are appointed or dismissed by the shareholders of the limited liability company. The board deals with the daily activities of the company and represents the company before third parties. The management board has at least one member and a maximum number of members can be stipulated in the company’s Articles of Association.
There are certain restrictions on who can become a management board member. In particular, only a natural person may be appointed to the management board. Polish law does not allow companies or legal persons to be appointed to boards.
Furthermore, a management board member must have full capacity to undertake legal actions and must not have been sentenced (within the last 5 years) for crimes against inter alia property and credibility of documents, or for acts conducted to the detriment of the company’s interest.
It is also important to note that:
- a management board member may not at the same time be a supervisory board member in the same company, and
- within a group of companies, a management board member of a subsidiary company cannot be a supervisory board member of the parent or holding company.
Further restrictions may apply to companies acting in regulated sectors, for example banking, insurance or betting services.
Where the share capital exceeds PLN 500,000 and the number of shareholders is more than 25, a supervisory board, consisting of at least three members, is compulsory. In other cases it is optional. Rules concerning the supervisory board are normally set out in the articles of association. If the articles of association do not include such provisions, the members of both the management and supervisory boards will be appointed and dismissed by the shareholders’ meeting. Members of the management board cannot be members of the supervisory board and vice versa, but members of management and supervisory board can be selected from shareholders and non-shareholders.
As a rule, there are two types of shareholders’ rights in a Polish limited liability company:
- Corporate rights include voting rights, the right to participate in shareholders’ meetings, the right to challenge shareholders’ resolutions, and the right of control, exercised either individually by shareholders or through a supervisory board if appointed (in certain cases, the appointment of a supervisory board is mandatory);
- Property rights are the right to participate in the company’s profit (dividend right), the right to transfer the shares, the shareholders’ pre-emptive right and the right to participate in distribution of amounts left after the company’s liquidation.
Additional rights can be granted in the company’s articles of association, either in the form of personal rights awarded to shareholders themselves (such as the right to appoint member of a corporate governing body), or they can be attached to certain shares (preferred shares) and carry the right or preference in terms of, for example, dividends or the number of votes attached to a preferred share.
The Commercial Companies Code provides for matters, where the preference is excluded (for example, substantial change of the object of the company’s activity requires majority of two-thirds of the votes, with each share carrying one vote).
Contribution to the share capital of the company
In general, contribution has to be defined as asset which presents certain value. In exchange of contribution shareholders acquire shares in LLC in Poland.
The contribution to Limited Liability Company in Poland may take form of:
- non-monetary contribution.
Taxation of Polish limited liability company (spółka z o.o.):
- spółka z o.o. is subject to 9% or 19% corporate income tax;
- capital gains are taxed at 19% rate;
- dividend payments generally are subject to 19% income tax, although exemptions may apply;
- Poland is a party to many double taxation avoidance treaties, according to which dividends paid from Poland may be effectively tax-free in Poland or taxed at a lower rate.