Legal forms of doing business
in Poland 2013/ 2014
Make a good start
2013/ 2014
Table of content
Sole proprietorship3
Civil law partnership4
Commercial law partnerships5
Registered partnership6
Professional partnership8
Limited partnership9
Limited joint-stock partnership11
Capital companies under the Polish law
13
Limited liability company14
Joint-stock company16
Foreigners’ starting up Business Activity in Poland 18
Branch of a foreign company 19
Representative office20
Office locations21
Contact22
2
Sole proprietorship
1. General overview
4. Liability
A sole proprietor is an individual who conducts
business activity in his/her own name and on his/her
own behalf. There are no legal requirements regarding
the amount of the initial capital to undertake business
activity as a sole proprietor in Poland.
The sole proprietor is liable for the debts generated
within the sole proprietorship. This liability is unlimited,
i.e. the sole proprietor is held liable for all financial
obligations of the sole proprietorship with all his/her
possessions – regardless of whether they are business
related or personal.
Also, no new legal entity is established as a result of
such undertaking.
The business of the sole proprietor may be transformed
into a capital company, i.e. a limited liability company
or a joint-stock company.
2. Foundation and registration
Unless a further date for commencing business activity
is indicated in the application, the sole proprietor
can commence the activity upon submission of the
application to the Business Activity Central Register and
Information Record (Centralna Ewidencja i Informacja
o Działalności Gospodarczej). The application has to
comply with certain legal requirements and include
specific information about the sole proprietor, such as
the name of the business, the address and the scope
of activity. The application to the Business Activity
Central Register and Information Record should
be accompanied by applications to the tax office,
statistical office and the Social Insurance Institution
(only as a contribution payer). The sole proprietor
should furthermore register with the Social Insurance
Institution as the insured. All applications to the
Business Activity Central Register and
Information Record are free of charge.
The business name of the sole proprietor must include
the first name and surname of the sole proprietor.
The business name may also include other practical
information, such as a pseudonym of the sole
proprietor, the scope of business activity or the place
where it si conducted. The business name of the
given sole proprietor must differ substantially from the
names of other businesses already operating in the
same market.
3. Governance and representation
The only person legally allowed to represent and
manage the sole proprietorship is the sole proprietor.
Consequently, there is no corporate body in a sole
proprietorship. The sole proprietor may, however, grant
powers of attorney to third persons.
5. Participation in profit and loss
All profits and losses generated as a result of the sole
proprietorship’s operation are fully allocated to the sole
proprietor. The sole proprietor may hire employees.
6. Financial reporting obligations
The sole proprietor is required to handle all accounting
issues of the proprietorship - including preparation of
financial statements at the end of given financial years
- if the net revenue of the business for the previous
financial year exceeds EUR 1,200,000.
The financial statements of the sole proprietorship may
be subject to audit, provided that at least two statutory
conditions related to the total balance sheet assets, net
revenue and the number of employees at the end of
the financial year are fulfilled. The financial statement
audited in accordance with the binding law should be
published in the Court and Economic Gazette (Monitor
Sądowy i Gospodarczy).
Taxation
The sole proprietor, as an individual, is required to
pay personal income tax. The income may be taxed in
several ways:
•
•
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with an appropriate tax rate: 18% or 32% (surplus
over ca. PLN 85,000);
with a 19% flat tax rate;
using a simplified method - in the form of lumpsum tax or tax card.
The sole proprietor is also subject to VAT if his/her
annual turnover exceeds PLN 150,000. Lower turnovers
are exempt from VAT, but the sole proprietor may
choose to be a VAT payer. The sole proprietor is subject
to all other taxes (e.g. real estate tax, excise duty, etc.)
in an ordinary manner, as required by the law.
Legal forms of doing business in Poland 20133
Civil law partnership
1. General overview
5. Participation in profit and loss
Two or more sole proprietors as well as other legal
entities, i.e. partnerships and capital companies, may
decide to establish a civil law partnership. A civil law
partnership is not a separate legal entity and does not
possess legal personality.
Each partner is entitled to an equal share in profits and
in the same proportion participates in the losses,
regardless of the type and value of the contribution.
The civil law partnership contract may provide for
a different distribution of profits and losses - it may
even release some of the partners from participating
in losses.
It also cannot acquire rights or incur obligations in its
own name and on its own behalf, it cannot sue or be
sued. Contributions and possessions generated during
the business operations of the civil law partnership are
owned by partners as joint co-ownership.
Civil law partnerships may be transformed into
registered partnerships based on a unanimous decision
of the partners.
2. Foundation and registration
The civil law partnership contract should be
concluded in writing. There is no minimum threshold
of contributions to be made towards the civil law
partnership.
Civil law partnerships do not have to be registered
with any official registers. If the civil law partnership
hires employees, it should be registered with the Social
Insurance Institution as a contribution payer.
3. Governance and representation
Each partner is entitled and obliged to manage
the civil law partnership’s affairs. Without a prior
partners’ resolution, each partner may manage
matters that do not exceed the civil law partnership’s
ordinary operations and may perform an urgent action
which - if not taken - could expose the partnership to
irreparable loss.
Unless the civil law partnership’s contract or partners’
resolution states otherwise, each partner is authorized
to represent the civil law partnership towards third
parties within the limits of their authorization to
manage the partnership’s affairs.
4. Liability
Each partner is personally liable for the civil law
partnership’s obligations towards third parties.
The liability is joint and several with the liability of
other partners.
4
A partner cannot, however, be entirely excluded from
participating in profits. The proportion of a partner’s
share in profits set forth in the civil law partnership
contract also refers to his/her share in losses, unless the
contract provides otherwise.
6. Financial obligations and reporting
The civil law partnership has to handle all its
accounting matters including preparation of financial
statements at the end of given financial years, unless
the partnership consists of natural persons only and its
net revenue for the previous financial year was lower
than EUR 1,200,000.
The partnership’s financial statements may be subject
to audit, provided that the conditions related to
the total balance sheet assets, net revenue and
number of employees at the end of the financial year
are fulfilled.
The financial statement audited in accordance with
binding law should be published in the Court and
Economic Gazette.
Taxation
Partners are obliged to pay personal income tax
in respect of the income generated in the civil law
partnership. The partnership as such does not pay
income tax, but it is a payer of VAT and should be
registered for VAT purposes.
Commercial law partnerships
There are four types of commercial law partnerships
under the Polish law: (i) a registered partnership
(spółka jawna – abbreviated to “sp. j.”),
(ii) a professional partnership (spółka partnerska –
abbreviated to “sp. p.”), (iii) a limited partnership
(spółka komandytowa – abbreviated to “sp. k.”)
and (iv) a limited joint-stock partnership (spółka
komandytowo - akcyjna – abbreviated to “S. K. A.”).
Commercial law partnerships do not have legal
personality.
However, they all have legal capacity and ability
to perform acts in law, which means that each
partnership may acquire rights in its own name,
including ownership of a real estate, and incur
obligations. It can also sue and be sued.
As personal relations are significant in commercial
law partnerships, transfer of rights and obligations,
acquiring a new partner or leaving the partnership
by one of the existing partners is generally subject
to restrictions which may be mitigated through
introduction of certain provisions to the articles of
association of the partnership.
Taxation of partnerships
Commercial law partnerships, except limited jointstock partnerships, are generally tax transparent,
so they are not subject to corporate income tax.
All revenues and costs of the partnership in a given
tax year are allocated to the partners in proportion
to their interest share in the partnership. The profit
is taxed in the hands of the partners. As of 1 January
2014 limited joint-stock partnerships will not be
transparent for income tax purposes and will be
subject to CIT as capital companies.
Partnerships are subject to VAT and other taxes in an
ordinary manner.
Legal forms of doing business in Poland 20135
Registered partnership
1. General overview
A registered partnership is the most basic form of
commercial law partnerships. The rules regarding its
creation, organization, functioning and dissolution
are generally applicable to other commercial law
partnerships, unless specifically stated otherwise.
The registered partnership is a low cost form of
conducting business activity. It gives a large scope of
discretion to the investors as to the operation of
the partnership. It is primarily used for small-scale
businesses, particularly due to the unlimited liability of
the partners for its obligations.
2. Foundation and registration
The registered partnership may be established by at
least two individuals or legal entities. The articles of
association of the registered partnership should be
made in writing, otherwise being null and void.
There is no minimum threshold of contributions to be
made towards the registered partnership.
Contributions towards the registered partnership may
be made in cash or in-kind (e.g. real property,
equipment and other movables, receivables, IP
rights, knowhow). The obligation to provide work or
services for the benefit of the registered partnership
may constitute a partner’s in-kind contribution to the
registered partnership.
The registered partnership comes into existence upon
its registration in the register of entrepreneurs kept by
the National Court Register. The application to the
National Court Register should be accompanied by
applications to the tax office, statistical office and
the Social Insurance Institution (if the registered
partnership intends to hire employees).
The business name of the registered partnership should
contain the surname or business name of at least one
of the partners and the official designation “spółka
jawna”. In a day-to-day activity it is also permissible to
use the abbreviation: “sp.j.”.
3. Governance and representation
The internal relations within the registered partnership
may be regulated by the partners in the articles of
association of the registered partnership. If some issues
are not regulated there, the provisions of the Polish
Commercial Companies’ Code apply.
Basically, each partner has the right and obligation to
manage the affairs of the registered partnership.
It is also possible to regulate the management
of the registered partnership differently, e.g. the
management may be entrusted to one or more
specified partners.
In such a case the remaining partners become excluded
from managing the affairs of the registered partnership.
The management of the partnership’s affairs cannot
6
be entrusted to third parties entirely, i.e. without
participation of any of the partners. No additional
remuneration is provided for managing the affairs of
the registered partnership, unless
specifically stated otherwise in the articles
of association.
The registered partnership is represented towards
third parties by its partners. Each partner has a right to
represent the registered partnership without any
restriction and to perform all acts in court and out
of court.
The partners may decide in the articles of association
of the registered partnership to deprive some of the
partners of their right to represent the registered
partnership. However, the right to represent the
registered partnership cannot be restricted with respect
to third parties, so if a partner represents the registered
partnership disregarding the fact that he is formally
deprived of such rights, such a partner will be liable
towards all other partners, but the actions undertaken
by him or her will be still valid towards third parties.
4. Liability
Each partner is personally liable for the partnership’s
obligations contracted towards third parties. The
liability is joint and several with the liability of other
partners. Moreover, the liability of the partners
is subsidiary in respect to the liability of the registered
partnership, which means that if the enforcement
proceedings from the partnership’s possessions are
ineffective, the partners may be liable with their
personal possessions. Joint and several liability of the
partners cannot be excluded in external relations of the
registered partnership, however the partners may
choose to decide in the articles of association of the
registered partnership on the scope of recourse claims
between the partners in case the creditors satisfy their
claims towards the registered partnership from the
property of one or more of the partners.
During the lifetime of the registered partnership the
partner who joins the partnership assumes liability
for all obligations of the registered partnership,
including those incurred before his/her accession.
5. Participation in profit and loss
Unless the articles of association of the registered
partnership state otherwise, each partner is entitled to
equal share in the profits generated by the registered
partnership and participates in its losses in the same
proportion. The partner cannot, however, be entirely
excluded from participation in the profits of the
registered partnership.
The exemption of the partner from participation
in the partnership’s loss is not effective with respect
to third parties. The partner of the registered
partnership may request
the distribution and payment of the entire profit at the
end of the financial year. The articles of association
of the registered partnership may allow the possibility
of paying an advance on the expected profit of the
registered partnership. Partners may decide to pay
the advance irrespective of the financial results of the
registered partnership. This distinguishes the registered
partnership from capital companies where payments of
dividends or advances towards expected dividends are
subject to capital and financial requirements.
The partners of the registered partnership are entitled
to the payment of interest in proportion to their capital
share in the registered partnership, unless the articles of
association provide otherwise.
6. Financial obligations and reporting
The registered partnership has to handle all its
accounting matters, including preparation of financial
statements at the end of given financial years, unless
the partnership consists only of natural persons and its
net revenue for the previous financial year is lower than
EUR 1,200,000.
Such financial statements may be subject to audit,
provided that at least two statutory conditions related
to the total balance sheet assets, net revenue and
number of employees at the end of the financial year
are fulfilled. If the registered partnership prepares its
financial statements, they need to be submitted to the
registry court.
Then, a relevant record of this fact is published in
the Court and Economic Gazette.
Legal forms of doing business in Poland 20137
Professional partnership
1. General overview
3. Governance and representation
Professional partnerships may be established by specific
professionals as defined and listed in the Polish
Commercial Companies’ Code (lawyers, architects, tax
advisers, accountants, doctors, dentists, and others).
The professional partnership may be formed for the
purpose of pursuing more than one profession, unless
the law prohibits this specifically. As in the case of
registered partnerships, professional partnerships do
not have legal personality but have legal capacity and
capacity to perform legal actions (they may acquire
rights, including ownership of a real estate, and incur
obligations in their own name, as well as sue and be
sued).
The management and external relations of professional
partnerships are governed by the rules that also
apply to registered partnerships. The difference is
that the articles of association of the professional
partnership may entrust the management board with
the management of the affairs and representation of
the partnership. Should this be the case, the partners
are deprived of the right to manage the partnership’s
affairs and to represent the professional partnership,
unless the members of the management board
are appointed from among the partners.
2. Foundation and registration
To establish a professional partnership at least two
individuals entitled to practice a given profession need
to conclude the articles of association of the
professional partnership.
The articles of association should be executed in
written form, otherwise being null and void. As in
the case of the registered partnership, contributions
towards the professional partnership may be made in
cash or in kind.
There is no minimum threshold of contributions
required to be made to the professional partnership.
Contributions toward the professional partnership may
be made in cash or in kind. The obligation to provide
work or services for the benefit of the professional
partnership may constitute the partner’s in-kind
contribution to the professional partnership.
The partnership is officially established upon its
registration with the register of entrepreneurs kept by
the National Court Register. The application to the
National Court Register should be accompanied by
applications to the tax office, statistical office and
the Social Insurance Institution (if the professional
partnership intends to hire employees).
The business name of the professional partnership
should include the surname or the business name of at
least one of the partners with the addition of one of
the following expressions: “i partner” or “i partnerzy”
or “spółka partnerska”, as well as the name of the
profession practiced in the professional partnership.
In regular day-to-day activity it is admissible to use the
abbreviation “sp.p.”.
8
4. Liability
A partner in the professional partnership does not bear
liability for debts and obligations that have arisen as
a result of another partner’s professional activity, or
actions or omissions of the partnership’s employees
supervised by the other partners. The articles of
association of the professional partnership may
broaden this default scope of liability as in the
registered partnership.
All partners are jointly and severally liable for all
other kinds of debts and obligations of the professional
partnership. Their liability is subsidiary in relation to
the liability of the professional partnership as in the
registered partnership.
5. Participation in profit and loss
The rules of participating in profit and loss of the
professional partnership are the same as in case of
the registered partnership, i.e. they may be regulated
by the partners in a flexible manner. Unless the articles
of association of the professional partnership state
otherwise, each partner is entitled to equal share in
profits generated by the professional partnership and
participates in its losses in the same proportion.
The partner cannot, however, be entirely excluded from
participation in profits of the professional partnership.
6. Financial reporting obligations
The professional partnership has to handle all its
accounting matters, including preparation of financial
statements at the end of given financial years, unless its
net revenue for the previous financial year is lower than
EUR 1,200,000 .
Such financial statements may be subject to audit,
provided that at least two statutory conditions related
to the total balance sheet assets, net revenue and
number of employees at the end of the financial year
are fulfilled. If the professional partnership prepares
its financial statements, they need to be submitted to
the registry court. Then, a relevant record of this fact is
published in the Court and Economic Gazette.
Limited partnership
1. General overview
A limited partnership is usually preferred when
investors seek a way to differentiate their involvement
in the partnership entity and consequently
their liability for the transactions performed by the
partnership. The distinctive feature of this partnership is
that the legal positions of partners are not equal
- general partner(s) and limited partner(s) - which
results in significantly different levels of rights and
liabilities.
2. Foundation and registration
The articles of association of the limited partnership
must be executed in the form of a notary deed,
otherwise being null and void.
There are no legal requirements regarding the
amount of initial capital of the limited partnership.
Contributions towards the limited partnership
may be made in cash or in kind. The obligation to
provide work or services for the benefit of the limited
partnership may constitute the general partner’s inkind contribution to the limited partnership. It may
also constitute the limited partner’s contribution, if
the value of his/her other contributions is higher than
the limited partner’s liability amount. The limited
partnership is subject to registration in the register of
entrepreneurs kept by the National Court Register.
The application to the National Court Register should
be accompanied by applications to the tax office,
statistical office and the Social Insurance Institution (if
the limited partnership intends to hire employees). The
limited partnership is established as of the moment of
registration in the National Court Register. The business
name of the limited partnership includesthe surname or
business name of at least one of the general partners
and an additional designation “spółka komandytowa”
(admissible abbreviation being ‘sp. k’. ). The limited
partner whose name is included in the business name
of the limited partnership bears unlimited liability for
the limited partnership’s obligations towards third
parties regardless of his/her status description in the
articles of association.
3. Governance and representation
partnership, provided that at least one of the general
partners remains authorized to act in such capacity.
4. Liability
The liability of partners depends on their legal position
in the limited partnership. General partners bear
unlimited liability for the partnership’s obligations
towards any third parties. The liability is joint and
several among general partners and subsidiary with
regard to the limited partnership. This means that
enforcement against a general partner may be carried
out only when enforcement from the partnership’s
possessions is ineffective. The liability of the limited
partners is reduced even further – up to the amount
explicitly indicated in the articles of association of the
limited partnership.
5. Participation in profit and loss
As with the registered partnership, the limited
partnership offers a fair amount of flexibility regarding
the partners’ participation in profit and loss. The
articles of association of the limited partnership
may regulate the details related to the profits and
losses shared by partners (with certain limitations in
relation to dealings with third parties). The articles
of association cannot deprive any partner of their
participation in the profits of the limited partnership.
If the articles of association of the limited partnership
do not state otherwise, a limited partner participates
in the profits proportionately to the contribution
actually made to the limited partnership. When in
doubt, a limited partner participates in the loss only up
to the value of the agreed contribution. The general
partner participates in profit and loss like a partner
of a registered partnership, i.e. unless the articles of
association of the limited partnership state otherwise,
each general partner is entitled to equal share in the
profits generated by the limited partnership and
participates is losses in the same proportion. The
general partner cannot be entirely excluded from
participation in the profit of the limited partnership.
The exemption of the general partners from their
participation in the limited partnership’s loss is not
effective with respect to third parties.
The internal management of the limited partnership
may be regulated flexibly within the articles of
association of the limited partnership. As with
registered partnerships, the management of the affairs
of the limited partnership cannot be entrusted to third
parties only, without any participation of the partners.
In principle, the limited partnership is represented by its
general partners in all legal actions, both in and out
of court. Limited partners may only represent the
partnership as proxies. The articles of association
of the limited partnership may also exclude one or
more general partners from representing the limited
Legal forms of doing business in Poland 20139
6. Financial reporting obligations
The limited partnership has to handle all its accounting
matters, including preparation of financial statements
at the end of given financial years.
Financial statements of this sort may be subject to
audit, provided that at least two statutory conditions
related to the total balance sheet assets, net revenue
and the number of employees at the end of the
financial year are fulfilled. The financial statements
should be submitted to the registry court.
Then, a relevant record of this fact is published in
the Court and Economic Gazette.
10
Limited joint-stock partnership
1. General overview
3. Governance and representation
A limited joint-stock partnership is the most complex
type of partnership, as its structure combines the
elements of both the registered partnership and the
joint-stock company. Like other partnerships,
the limited joint – stock partnership has no legal
personality, but it has legal capacity, which means
that it may acquire rights, and incur obligations in its
own name. The limited joint-stock partnership may
also sue and be sued. Limited joint-stock partnerships
are established by at least one general partner and
one shareholder. Participation of shareholders is
a consequence of a capital-focused character of the
limited joint-stock company.
Like the limited partnership, the limited joint-stock
partnership is represented by its general partners
in all legal actions, in and out of court. The articles
of association may specifically exclude one or more
general partners from representing the limited joint
– stock partnership, provided that at least one of the
general partners remains authorized to act in that
capacity. Shareholders may represent the limited
joint – stock partnership only as proxies. They have
no right or obligation to manage the limited joint –
stock partnership’s affairs. The partnership’s affairs are
managed by the general partners, provided that the
particular action is not reserved to the competence of
the general meeting or supervisory board. The articles
of association may also entrust the management of the
company’s affairs to one or several general partners.
All shareholders of the limited joint-stock partnership
form a general meeting. They have certain exclusive
competencies granted by the law, e.g. they approve
the financial statements for the previous calendar year,
grant vote of acceptance to general partners, appoint
members of the supervisory board. Some important
decisions such as dissolution of the limited joint-stock
partnership may even require both
a resolution of the general meeting and an additional
consent of the general partners.
2. Foundation and registration
Due to its specifics, the establishment of the joint-stock
partnership is a formal and complex process.
The foundation of the limited joint-stock partnership
starts with signing the articles of association in the form
of a notary deed. The articles of association should
indicate the value of share capital amounting to at
least PLN 50,000 (which is the equivalent of approx.
EUR 12,500 – 14,000). The share capital only consists of
the contributions made by the shareholders (or general
partners who are simultaneously the shareholders).
Such contributions of shareholders can be made in cash
or in-kind, but the law introduces some restrictions
in this matter. As to general partners, the scope of
potential contributions is broader and it includes the
obligation to provide work or services for the benefit of
the limited joint-stock partnership .
The limited joint-stock partnership is recorded in
the register of entrepreneurs kept by the National
Court Register. The application to the National Court
Register should be accompanied by applications to the
tax office, statistical office and the Social Insurance
Institution (if the limited joint – stock partnership
intends to hire employees). The limited joint - stock
partnership is established as of the moment of
registration in the National Court Register.
The business name of the limited joint-stock partnership
must include the surname or the business name of at
least one of the general partners and an additional
designation “spółka komandytowo-akcyjna”. In business
relations it is admissible to use the abbreviation:
“S.K.A.”. The shareholder whose name is included in
the business name of the limited joint-stock partnership
bears unlimited liability for the limited joint-stock
partnership’s obligations towards third parties
regardless of his/her status description in the articles of
association.
A supervisory board may be established in the limited
joint-stock partnership in order to exercise supervision
over the limited joint – stock partnership in all areas
of its operation. Establishing a supervisory board is
obligatory if the number of shareholders exceeds 25.
4. Liability
As in the case of the limited partnership, the general
partners of the limited joint-stock partnerships bear
unlimited liability for the limited joint-stock partnership’s
obligations. The liability is joint and several among the
general partners and subsidiary with regard to
the limited joint-stock partnership. This means that
enforcement against the general partner may be carried
out only when enforcement from the limited joint –
stock partnership’s possessions is ineffective.
The shareholders do not bear any liability for the
limited joint-stock partnership’s obligations.
Legal forms of doing business in Poland 201311
5. Participation in profit and loss
The division of the profit generated by the limited joint-stock
partnership may be regulated flexibly in the articles of association
. Basically, the general partner and shareholders participate in the
profits in proportion to their contribution to the limited joint-stock
partnership. The payment of the profit to the general partners or
shareholders requires adoption of the relevant resolution, respectively
by the general partners or the general meeting. The articles of
association of the limited joint-stock partnership may provide for
a possibility to make advance payments towards the expected
dividends to the shareholders of the limited joint-stock partnership.
6. Financial reporting obligations
The limited joint-stock partnership has to handle all its accounting
matters, including preparation of financial statements at the end of
given financial years. Such financial statements may be subject to
audit, provided that at least two statutory conditions related to the
total balance sheet assets, net revenue and number of employees
at the end of the financial year are fulfilled. The financial statements
should be submitted to the registry court. Then, the relevant record
of this fact is published in the Court and Economic Gazette.
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Capital companies under the Polish law
The Polish law provides for two types of capital
companies: – a limited liability company (spółka
z ograniczoną odpowiedzialnością – abbreviated to
“sp. z o.o.”) and a joint-stock company (spółka akcyjna
– abbreviated to “S.A.”). Capital companies have legal
personality and may acquire rights and incur
obligations in their own name, as well as sue and
be sued.
Taxation of capital companies
Capital companies are separate taxpayers subject to
CIT. In principle, the companies that have a registered
office or a management board in Poland are subject
to taxation on their global income. Taxable income
consists of all revenues earned in a tax year (financial
and operational), net of deductible costs. This income is
subject to CIT at the rate of 19%. Capital companies are
payers of VAT and other taxes in an ordinary fashion.
Legal forms of doing business in Poland 201313
Limited liability company
1. General overview
A limited liability company is the most popular and
flexible form of conducting business activity in Poland.
It is the Polish equivalent of the private limited liability
company in the UK, a société a responsabilité limitée
(sarl) in France, or a Gesellschaft mit beschänkter
Haftung (GmbH) in Germany. Limited liability companies
may be established for any purpose allowed by law.
They are often used as special purpose vehicles, holding
companies and as national operating companies
controlled by international corporations.
The personal structure of the limited liability company
may be, in general, changed without affecting the legal
structure of the limited liability company, which is
normally not the case with a partnership. A limited
liability company may also be run by a single founder/
shareholder. However, a single-shareholder limited
liability company cannot incorporate another singleshareholder limited liability company. Although a limited
liability company is a capital company, it still preserves
some personal elements, such as the possibility to
limit the disposal of the company’s shares or establish
the shareholder’s right of individual control of the
limited liability company. The shares of a limited liability
company do not take the form of a document and
cannot be listed on the stock exchange.
2. Foundation and registration
The incorporation of the limited liability company
requires undertaking the following steps: (i) drafting
the articles of association in the form of a notarial deed,
(ii) appointing the company’s governing bodies, (iii)
paying the entire share capital or providing the limited
liability company with an in-kind contribution (the
minimum amount of the share capital is PLN
5,000 which is equivalent to approx. EUR 1,200
– 1,500), (iv) registering the limited liability company in
the register of entrepreneurs maintained by the National
Court Register.
The contributions to the limited liability company may be
both: cash or in-kind.
However, the obligation to provide work or services
for the benefit of the limited liability company cannot
constitute the shareholder’s in-kind contribution to
the limited liability company. Starting from 2012, the
foundation and registration of the limited liability
company is possible based on a simplified internet
procedure, by using official forms and standard
corporate documents. The simplified procedure is
applicable only in respect of standard limited liability
companies (including standard articles of association)
and has some limitations, e.g. only cash contributions
are allowed. The application to the National Court
Register should be accompanied by applications to the
tax office, statistical office and the Social Insurance
Institution (if the limited liability company intends to
14
hire employees). The limited liability company comes
into existence upon registration in the register of
entrepreneurs kept by the National Court Register
and obtains its legal personality on the day of entry
thereto. However, it may start activities, e.g. conclude
contracts, even before its registration. There are
generally no restrictions as to the name of the
limited liability company, subject however to the rights
of other entrepreneurs operating in the same market.
The business name must include the additional
designation: “spółka z ograniczoną odpowiedzialnością”.
In business relations it is admissible to use the
abbreviation “spółka z o.o.” or “sp. z o.o.”.
3. Governance and representation
Governing Bodies
The governing bodies of a limited liability company are
the general meeting and the management board.
The limited liability company may be furnished
with a supervisory board, an audit committee or both,
if necessary in accordance with the binding law or the
articles of association.
General Meeting
The shareholders execute their rights in the limited
liability company at the general meeting. A general
meeting approves resolutions concerning the most
important matters of the limited liability company,
it approves among others the management board report
on the operations of the limited liability company, grants
consent for the disposal or tenancy of the enterprise.
The scope of actions that require consent of the
shareholders given in a resolution of the general meeting
may be expanded in the articles of association. Particular
decisions made at the general meeting may require
a qualified majority of votes, subject to the provisions
of the applicable law and wording of the company’s
articles of association.
The annual general meeting must be held at least
once a year within six months following the end of the
company’s financial year. The general meetings must be
held in Poland.
Management Board
The on-going operations of the limited liability company
are carried out by the management board which is
also a representative and executive body of the limited
liability company. The management board must consist
of at least one member, depending on the wording of
the articles of association. Management board members
are usually appointed based on the resolution of the
shareholders’ meeting.
The rules of representation of the limited liability
company are set forth in the articles of association.
Generally, if the management board is comprised of
several members, the limited liability company is
represented by two management board members
acting jointly or by one member of the management
board acting together with a commercial proxy.
Supervision of the company
Each shareholder of the limited liability company has
the right to control the limited liability company, i.e. the
right to review the books and documents of the limited
liability company and request explanations thereof
from the management board. These rights may be
limited only if a supervisory board or audit committee is
established.
If the share capital of the limited liability company
exceeds PLN 500,000 (which is equivalent to approx.
EUR 125,000 – 143,000) and there are more than 25
shareholders, the establishment of a supervisory board
or an audit committee is obligatory.
The supervisory board is the main body controlling the
business of the limited liability company. The upervisory
board exercises permanent supervision over all areas of
the activities of the limited liability company. The main
responsibility of the supervisory board is to examine
the company’s financial statements, the reports of
the management board on the company’s operations
as well as to provide day-to-day supervision of the
company’s affairs.
The duties of the audit committee include evaluation
of:
(i) the management board’s report on the operations
of the limited liability company and the financial
report for the previous financial year,
(ii) proposals of the management board concerning
the distribution of profits or the financing of losses, as
well as submission of the annual written report on the
results of such evaluation to the general meeting.
There must be at least three members on the
supervisory board/audit committee. The members are
appointed by a resolution of the shareholders’ meeting,
unless the articles of association state otherwise.
4. Liability
One of the key advantages of forming a limited liability
company is that the shareholders are not liable for the
company’s debts. Their liability is limited up to the
value of the shareholders’ contribution to the limited
liability company. However, based on the provisions
of law, members of the management board are liable
for the obligations of the limited liability company
(including tax obligations), if enforcement against
the limited liability company proves ineffective. The
management board may be exempted from this liability
only under certain statutory conditions, for example in
the case of the company’s insolvency the management
board member may be released from personal liability
by starting the bankruptcy proceeding within the
statutory time frames.
5. Payment of profits to shareholders
Profits generated by the limited liability company are
paid to the shareholders as yearly dividends, on the
dates indicated by the shareholders. Profits to be
divided among the shareholders may not exceed the
profits for the previous financial year, increased by
the undivided profits from previous years and certain
amounts drawn from the supplementary and reserve
capitals. The articles of association may authorize
the management board to pay the shareholders an
advance on expected dividends for the financial year
if the limited liability company has sufficient funds for
such payments. The amount of the advance is however
limited by the law and is subject to certain rules,
including the condition that the previous financial year
must show profit.
6. Shareholders’ Rights and Obligations
Shareholders have equal rights and obligations in
the limited liability company, unless the articles of
association state otherwise and allow for the issuance
of privileged shares. The shares may be privileged in
terms of voting rights, rights to dividend or the right
to participate in the distribution of the company’s
possessions after liquidation. Moreover, each
shareholder of a limited liability company has the right
to control the business of the limited liability company.
However, this right may be cancelled or limited by the
provisions of the articles of association if a supervisory
board or an audit committee is established.
There are no limitations with respect to the
transferability of shares, unless the articles of
association provide otherwise (e.g. by introducing
preemption rights).
Under the provisions of the articles of association and
based on the shareholders’ meeting resolution the
shareholders may be put under an obligation to make
additional payments to the limited liability
company.
7. Financial reporting obligations
The limited liability company has to handle all its
accounting matters, including preparation of financial
statements at the end of the financial year.
Such financial statements may be subject to audit,
provided that at least two statutory conditions related
to the total balance sheet assets, net revenue and
number of employees at the end of the financial year
are fulfilled. The financial statements should be
submitted to the registry court. Then, the relevant
record of this fact is immediately published in
the Court and Economic Gazette.
Legal forms of doing business in Poland 201315
Joint-stock company
1. General overview
3. Governance and representation
A joint-stock company is the Polish equivalent of the
public liability company in the UK, société anonyme
(SA) in France and the German Aktiengesellschaft (AG).
Joint-stock companies are rather expensive to run and
are primarily used for large-scale business activities, in
particular, if public offer is to be considered as a way of
obtaining capital.
Governing Bodies
Formally it is more structured than the limited liability
company.
The shares of joint-stock companies may be publicly
traded (listed on the Stock Exchange). The Polish
law provides stricter and more complex rules with
respect to public joint-stock companies regarding their
capitalization, composition of the governing bodies,
compliance and reporting duties.
2. Foundation and registration.
The company’s foundation process is very formal.
The articles of association of the joint-stock
company must be prepared in the form of a notary
deed. In accordance with the Polish law, a joint-stock
company may be formed by one or more persons, but
it cannot be formed exclusively by a single-shareholder
limitedliability company.
As regards capitalization, the minimum share
capital of the joint-stock company amounts to PLN
100,000 (which is the equivalent of approx. EUR
25,000 – 28,000). The shares may be paid for with
cash or covered with an in-kind contribution. The
covering of shares in the joint-stock company is more
formalized than in the case of the limited liability
company and may involve evaluation of in-kind
contributions by an independent auditor.
The joint-stock company is subject to registration
in the register of entrepreneurs kept by the National
Court Register.
The application to the National Court Register should
be accompanied by applications to the tax office,
statistical office and the Social Insurance Institution
(if the joint – stock company intends to hire
employees). The joint-stock company obtains its
legal personality on the day of entry to the register of
entrepreneurs of the National Court Register.
However, it may start operating as a joint-stock
company in organization even before registration.
The business name of the joint-stock company may be
chosen freely, it must, however, include the additional
designation: “spółka akcyjna”. In business dealings it is
admissible to use the abbreviation:“S.A.”.
16
The governing bodies of a joint-stock company are
the general meeting, the supervisory board and the
management board.
Management Board
The management board makes day-to-day
management decisions for the joint-stock company and
represents it. The members of the board are appointed
and dismissed by the supervisory board, unless the
articles of association state otherwise. The members
of the management board may also be dismissed or
suspended by the general meeting. The representation
of the joint-stock company is regulated by the articles
of association of the joint-stock company, however,
under the general rule, if the management board
is comprised of several members, the joint-stock
company is represented by two management board
members acting jointly or by one member of the
management board acting together with a commercial
proxy.
Supervisory Board
Unlike in the limited liability company, the supervisory
board in the joint-stock company is required by law.
It should consist of at least three (in public joint-stock
companies - five) members appointed by the general
meeting. The board exercises permanent supervision
over all areas of the activities of the joint-stock
company. The competencies of the supervisory board
may be extended in the internal company’s relations
based on the company’s articles of association.
General Meeting
The general meeting should be held at least once
a year, after the end of each financial year (annual
general meeting).
Extraordinary general meetings should be convened in
the situations provided for by law or in the articles
of associations and if the company’s officials or
shareholders request so. The general meetings may
only be held in the territory of Poland. In the case of
joint-stock companies, the articles of association may
allow for the participation in the general meeting
through electronic media.
The annual general meeting decides upon the approval
of the company’s financial statement, the management
board’s report on the company’s operation, the
distribution of the profit (covering the loss) and it
dismisses the members of the management board and
the supervisory board from their posts when required.
The general meetings (both annual and extraordinary)
have many powers, such as, for example, granting
consent for acquisition of a real estate. As in the limited
liability company, the scope of actions that require the
approval of the general meeting may be extended in
the articles of association of the joint-stock company.
4. Liability
The shareholders are not liable for the obligations of
the Joint-stock company. It means that the joint-stock
company is solely liable for its obligations.
As in limited liability companies, the management
board member may be held liable for the
obligations of the joint-stock company (including tax
obligations) in case enforcement against the company
proves to be ineffective. The board may be exempt
from this liability under certain conditions.
management board members or supervisory board
members.
7. Financial reporting obligations
The joint-stock company has to handle all its
accounting matters, including preparation of financial
statements at the end of the financial year. The
financial statements of the joint-stock company must
be subject to audit and they should be submitted to
the registry court. Upon submission the relevant record
of this fact is immediately published in the Court and
Economic Gazette. The statutory audit is also one of
the conditions for the payment of dividend in the jointstock company.
5. Payment of profits to the shareholders
As in limited liability companies, profits generated by
the joint-stock company are paid to the shareholders
in the form of yearly dividends. The amount of the
dividend may not exceed the profits for the previous
financial year, increased by the undistributed
profits from previous years and certain amounts
drawn from the supplementary and reserve capitals.
Unlike dividend payments in limited liability companies,
the payment is also subject to further restrictions, e.g.
it cannot take place before the company’s financial
statement is audited.
The articles of association may allow the possibility
of paying advances on the expected dividends. The
amount of such advance dividends is limited by the
law and is subject to the condition that the previous
financial year shows profit. Additionally, it requires
consent of the company’s supervisory board.
6. Shareholders’ rights and obligations
There may be registered shares or bearer shares in the
joint-stock company. The company may issue shares
with special rights attached to them - such rights
should be stipulated in the articles of association
of the joint-stock company (privileged, preference
shares). The privileges may concern the right to vote,
the right to obtain privileged dividends or to participate
in division of possessions in case of liquidation of the
joint-stock company. Some additional regulations and
restrictions apply to the shares of a public joint-stock
company. The joint-stock company is a typical capital
company where the shareholders execute their rights
mainly by voting at the general meeting and personal
aspects are less important, e.g., the joint-stock
company does not give the right of individual
control to the shareholder as is the case with limited
liability companies.
However, the articles of association of the jointstock company may contain certain provisions that
strengthen the personal element in such companies,
e.g. the right of an individual shareholder to appoint
Legal forms of doing business in Poland 201317
Foreigners’ starting up Business Activity in Poland
The main law governing the business activity of
foreigners in Poland is the Economic Activity Freedom
Act of 2 July 2004.
In accordance with the Economic Activity Freedom
Act a foreigner is: (i) a natural person holding no
Polish citizenship, (ii) a legal person with the seat
abroad and (iii) an organizational entity which has no
legal personality and is furnished with legal capacity,
possessing its seat abroad.
A. Foreigners from:
•
•
member states of the European Union,
member states of the European Free Trade
Agreement (EFTA) – parties to the Agreement on
the European Economic Area, and
• states that are not parties to the Agreement on
the European Economic Area and that enjoy
freedom of establishment under agreements
concluded by those states with the European
Community and its member states
- may establish and conduct economic activity based
on the same terms as the Polish citizens.
B. The above rule also applies to foreigners who
are not citizens of the states indicated in point A
and who
•
•
•
•
•
•
•
•
•
18
have received a permit to settle in Poland;
have received a permit to stay in Poland under the
status of a long-term resident of the European
Community;
have received a residence permit in Poland for
a specified period of time due to circumstances
referred to the Foreigners Act of 13 June 2003;
have a refugee status in Poland or enjoy
supplementary protection;
have received a permit for tolerated residence;
have received a residence permit in Poland for a
specified period of time and have been married to
a Polish citizen residing in Poland;
enjoy temporary protection in Poland;
have a valid Pole’s Card;
are family members of citizens of states indicated
in point A above and join or stay with them
in Poland.
C. Unless international agreements state otherwise,
foreigners other than those indicated above in
points A and B have the right to establish and
conduct business activity (including joining belowmentioned partnerships/companies and acquiring
their shares) only in the form of:
•
•
•
•
a limited partnership,
a limited joint-stock partnership,
a limited liability company and
a joint stock company.
Moreover, foreign entrepreneurs, i.e. a foreign person
conducting economic activity abroad and a Polish
citizen conducting economic activity abroad, may
conduct business activity in the form of a branch office
or they may establish a representative office in Poland.
Branch of a foreign company
1. General overview
4. Liability
According to the Polish law, foreign entrepreneurs may
set up branch offices to carry out business activity in
the Polish territory. An entrepreneur from a foreign
country is allowed to establish a branch on condition
that a Polish entrepreneur enjoys equivalent rights in
the country of origin of the foreign entrepreneur
(reciprocity rule), unless the international agreements
ratified by Poland state otherwise. The above does not
concern entrepreneurs from EU and EEA countries as
well as from countries that are parties to association
agreements with the EU in the area of the freedom of
establishment. Such entrepreneurs may freely set up
branch offices in the Polish territory. A branch does
not possess legal personality, it constitutes an integral
part of the foreign enterprise and cannot acquire
rights or incur obligations in its own name, cannot
sue or be sued. However, branches have significant
independence with respect to employment matters.
The scope of business activity of the branch may not
go beyond the foreign entrepreneur’s scope of activity.
Some special regulations (both in Poland and European
Union) regarding opening a branch may be
applicable to specific industries, e.g. when opening
a branch of a foreign bank, insurance company or
investment company. In such cases, the opening of
a branch should be seen in light of those specific
regulations (which may differ from the general rules).
The branch constitutes an internal part of the foreign
enterprise’s structure. Hence, the obligations of the
branch are treated as the obligations of the foreign
enterprise, regardless of the fact that the branch may
have its separate capital used for the operation.
2. Foundation and registration
Should that be the case, only the income related to the
activities of the branch in Poland is subject to 19% CIT.
A foreign entrepreneur (not the branch) is also
a taxpayer with respect to VAT in an ordinary manner
and must register in Poland for the purpose of paying
VAT. A foreign entrepreneur managing a branch in
Poland can also be required to pay other taxes. If the
branch is functions as an employer, then it must be
registered for tax purposes (i.e. acquire a NIP number).
The foreign enterprise may pursue economic activity
through its branch, upon having the branch entered
in the register of entrepreneurs of the National Court
Register.
The branch is formed on the basis of a resolution
of the relevant body of the foreign enterprise. The
branch does not have its own share capital or articles
of association. The application to the National Court
Register should be accompanied by applications to the
tax office, statistical office and the Social Insurance
Institution (if the branch intends to hire employees).
A branch of a foreign company must use the name
of that company in the language of the country
where it is registered, along with the name of its legal
form translated into Polish and the addition “oddział
w Polsce” (branch in Poland).
5. Financial reporting obligations
The branch must keep separate accounting books
in Polish, in accordance with the Polish accounting
regulations. The branch has to handle all its accounting
matters, including preparation of financial statements
at the end of given financial years. Such financial
statements may be subject to audit, provided that
at least two statutory conditions related to the
total balance sheet assets, net profit and number of
employees are fulfilled at the end of the financial year,
The financial statement should be submitted to the
registry court. Then, the relevant record of this fact
is immediately published in the Court and Economic
Gazette.
Taxation
The branch is not a separate taxpayer of income tax in
Poland. Polish income tax provisions refer to the foreign
enterprise as a taxpayer, and the branch is normally
considered the taxpayer’s permanent establishment
in Poland.
3. Governance and representation
The foreign entrepreneur must appoint a person who
will be authorized to represent the foreign entrepreneur
in the branch. There are no formal restrictions as to
the organizational structure of the branch.
Legal forms of doing business in Poland 201319
Representative office
1. General overview
5. Financial reporting obligations
Foreign entrepreneurs may set up their representative
offices in Poland. The representative office does not
constitute a separate legal entity and is treated as part
of a foreign enterprise’s organizational and functional
structure.
The representative office is obliged to keep separate
accounting books, in Polish, pursuant to Polish
accounting regulations. The representative office
should also handle all its accounting matters,
including preparation of financial statements at the end
of given financial years.
It cannot acquire rights or incur obligations, sue or be
sued. The representative office may be established by
the foreign entrepreneur only to advertise and promote
the business of the entrepreneur in Poland.
2 Foundation and registration
Setting up a representative office requires registration
in the Register of Representatives Offices of Foreign
Business Entities kept by the Minister of Economy.
The application for registration should be made in
Polish. The documents in a foreign language that
are attached to the application should be submitted
together with their sworn translation into Polish.
The representative office is obliged to use the name of
the foreign enterprise in the language of the country
where it is registered, together with the name of
its legal form translated into Polish and the words
“przedstawicielstwo w Polsce” (i.e. representative office
in Poland) added.
3.Governance and representation
The foreign entrepreneur must appoint a person who
will be authorized to represent the foreign entrepreneur
in the representative office.
4. Liability
The representative office constitutes an internal part of
the foreign enterprise’s structure. Hence its obligations
are treated as the obligations of the foreign enterprise.
20
Financial statements may be subject to audit,
provided that the at least two statutory conditions
related to the total balance sheet assets, net revenue
and number of employees at the end of the financial
year, are fulfilled. The financial statement audited in
accordance with binding law should be published
in the Court and Economic Gazette, unless the
representative office only represents the foreign
entrepreneur and does not conduct any business
activity within Polish territory.
Taxation
As it is a part of the foreign enterprise, a representative
office itself is not a separate taxpayer of income tax in
Poland. The foreign entrepreneur acting through
a representative office may be a taxpayer with respect
to VAT in an ordinary manner, and can register in
Poland for VAT purposes. A foreign enterprise running
a representative office may also be required to pay
other taxes.
Office locations
Main office
Deloitte House
Al. Jana Pawła II 19
00-854 Warszawa
Poland
Tel: +48 (22) 511 08 11
Fax: +48 (22) 511 08 13
Regional offices
Office in Łódź
al. Józefa Piłsudskiego 76
90-330 Łódź
Poland
Tel: +48 (42) 290 61 00
Fax:+48 (42) 290 61 01
Office in Poznań
ul. Ułańska 7
60-748 Poznań
Poland
Tel: +48 (61) 882 42 00
Fax: +48 (61) 882 42 01
Office in Wrocław
Plac Grunwaldzki 23
Grunwaldzki Center
50-365 Wrocław
Poland
Tel: +48 (71) 335 45 00
Fax: +48 (71) 335 45 05
Office in Katowice
ul. Uniwersytecka 13
40-007 Katowice
Poland
Tel: +48 (32) 508 03 00
Fax: + 48 (32) 508 03 01
Office in Kraków
Al. Armii Krajowej 16
30-150 Kraków
Poland
Tel: +48 (12) 394 43 00
Fax: +48 (12) 394 43 01
Legal forms of doing business in Poland 201321
Contact
Office in Warsaw
Robert Pasternak
Partner at Deloitte Legal
Attorney at law
phone: +48 22 511 08 44
e-mail: [email protected]
Zbigniew Korba
Partner at Deloitte Legal
Attorney at law
phone: +48 22 348 35 56
e-mail: [email protected]
Joanna Dudek
Partner Associate at Deloitte Legal
Attorney at law
phone: +48 22 511 00 95
e-mail: [email protected]
Offices in Poznań and Łódź
Offices in Katowice and Cracow
Office in Wrocław
Mariusz Śron
Partner Associate at Deloitte Legal
Attorney at law
phone: +48 61 882 42 20
e-mail: [email protected]
Edyta Garlicka
Partner Associate at Deloitte Legal
Attorney at law
phone: +48 12 394 43 02
e-mail: [email protected]
Konstanty Dobiejewski
Managing Associate at Deloitte Legal
Attorney at law
phone: +48 71 335 45 21
e-mail: [email protected]
22
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