Share capital, known also as the registered capital or issued capital, it is the initial contribution made to the company by its shareholders. It is often, at the beginning, the main source of founding of the company.
At the time it is being paid by the shareholders to the company it becomes an asset of the company. The shareholders may not freely decide on distribution of those funds, for example for their private purposes. Any changes to the share capital and its value shall be registered in the companies’ accounts.
The value of the share capital of a Polish limited liability company is often a valuable information for company’s creditors, as it guarantees that the company has a certain property that is the basis for satisfying the creditors.
In accordance with Commercial Companies Code art. 154 § 1 the minimum share capital of a Polish limited liability company is PLN 5.000. Additionally, in accordance with § 2 nominal value of each share may not be lower than PLN 50.
When submitting an application for the registration of a company in the National Court Register the board members have to submit a declaration that the share capital has been paid up (art. 167 § 1 pt 2 K.s.h.). That is why the share capital shall be paid up at the time the declaration for the registration of a company is submitted. Submitting false declaration by the board members is under pain of civil and criminal liability (art. 291).
Deadline for paying up the share capital is different when company is incorporated via s24 system. In this case the share capital has to be paid up not later than within 7 days from the date the company is registered. If the share capital is not being paid up at the time of registration there is a note in the register that the share capital has not been paid up. This note will be deleted automatically, when declaration signed by all the board members confirming that the share capital has been paid up in full by the shareholders, is submitted to the registry by the board.
All shareholders of the company are obliged to make payments towards the share capital. Those payment smay be made in cash or in kind.
There are two ways in which the share capital pay be paid up in cash:
- By a bank transfer – to the bank account of the company;
- By a cash payment.
Payment in cash may be expressed only in Polish Zloty.
Payment in kind may be made in following forms:
- Ownership right;
- Right of perpetual usufruct;
- Disposable proprietary copyrights;
- Shareholders receivables towards third parties;
- Securities (shares).
Art.14 of the Polish Company Law Act lists what may not constitute a contribution – these are inalienable rights such as usufruct or personal servitude and the provision of work or services.
In case of the infringement of the share capital of the company, the law provides for the obligation to compensate the missing value and prohibits taking action to deplete it.
Nevertheless, it does not mean that the company may not use those funds for conducting business and that those fund (in case of cash contribution) shall stay deposited at the bank account. The company may surrogate the components of the contribution.
If you are interested in incorporating a company in Poland or have any questions regarding running of a company, please get in touch.