A Poland LLC / Limited Liability Company is the most common method for an investment platform in Poland. As a separate legal entity, the Polish LLC is liable for its legal obligations, debts, loans, and judicial court judgments. The shareholders liability is limited to their contribution of the share capital. Foreigners can own 100% of the shares in a LLC.
The law which governs Polish LLC’s is the Polish Companies Code.
Background
Poland is officially called the “Republic of Poland” and is located in Eastern Europe and is a member of the European Union (EU).
Its political system is a unitary parliamentary republic with a President, Prime Minister, and an Upper and Lower House National Assembly.
Benefits
A Poland Limited Liability Company (LLC) has the following benefits:
• 100% Foreign Ownership: Foreigners can own 100% of the shares in a Polish LLC.
• Limited Liability: Shareholders’ liabilities are limited to their capital investment.
• One Shareholder: The minimum number of shareholders is one to form a LLC in Poland.
• One Director: Only a minimum of one director is required to form the LLC.
• Low Minimum Share Capital: The required minimum share capital is low.
• Fast Registration: Online registration takes only one business day.
LLC Company Name
A LLC must select a name which will not be similar to any other Polish company name.
Every LLC company name must end with this abbreviation, “Sp. z.o.o.” Sp. z.o.o. stands for Spółka z ograniczoną odpowiedzialnością, which literally means “Limited liability company.”
Registration
Registration of a Polish LLC requires:
• Filing the Articles of Association as a Notary Deed;
• Obtaining the total share capital before registering;
• Appointing the appropriate company bodies; and
• Filing all required documents in the Commercial Registry.
Upon filing all required documents in the Commercial Registry, it will become a legal entity. Prior to registration, the LLC may operate as a “company in organization” for up to six month with the ability to enter into legally binding contracts.
Articles of Incorporation
The first step towards incorporation is the preparation of the Articles of Incorporation signed in front of a Polish notary who prepares a “Notary Deed”. The Articles must be either signed directly by the shareholders or by their attorney who has a notarized Power of Attorney. A declaration of Subscription of Shares will also be necessary to prepare.
The Articles of Incorporation must include the following details: the company name and type of company, purpose of company activities, duration of company’s life, amount of share capital, number of shares, and nominal value of shares,.
In addition, the LLC’s Articles of Incorporation must include all of the operational rules and regulations in order to operate the company including contributions, profits, and duties of shareholders, Board of Directors, and management.
Limited Liability
The LLC is a separate legal entity from its shareholders. The company is fully liable for all of its obligations.
Each shareholder’s liability is limited to his/her company shares contribution.
Perpetual
The Articles of Association must declare whether the LLC is formed for a definite time period or indefinitely (perpetual).
Shareholders
There is a minimum of one shareholder to form a LLC. However, the sole shareholder cannot be another single shareholder company. Otherwise, there is no maximum limit of shareholders.
Shareholders can be either natural persons or legal entities.
Board of Directors
A Board of Directors is required which may consist of one or more members either appointed for one year, additional years, or indefinitely. The Articles of Association should provide all the rules and regulations regarding who can be members, how and for how long are appointed, the manner of conducting their duties, and their termination.
If the Board of Directors consists of just the company’s only shareholder, every resolution must be signed in front of a notary.
A Proxy (Prokurent) may be appointed by the Board of Directors to represent the LLC in all matters except for selling or encumbering property or selling or granting the use of the company’s enterprise. The proxy must be entered into the LLC’s register.
Supervisory Board
The LLC can appoint a Supervisory Board (also called an “audit committee”) whose powers will be specified in the Articles. This Board can resolve any conflict of interest’s issues regarding contracts between Board of Directors members and the company.
Accounting
Poland’s Accounting Act of 1994 establishes the rules and standards for maintaining company accounting records and books ensuring correct operations and internal control systems. All accounting records must be written in Polish and use the Polish currency. Balance sheets and tax books must show the income, debts, profits, and losses for every fiscal year.
Registered Office and Agent
LLC’s must have a registered office with a registered agent in Poland.
Minimum Share Capital
The required minimum share capital is 5,000 PLN (currently 1,200 Euro). Upon registering the company, the full cash amount must be deposited in the company’s bank account. If all or parts of the contributions are paid “in kind” their value does not have to be appraised by an expert.
The minimum value of one share is 50 PLN.
Annual General Meeting
An annual Shareholders’ Meeting is required under the law. This meeting will consider:
1. Review and approval of reports from the Board of Directors regarding financial statements of the prior fiscal year, company operations, and voting confidence in the performance of the Board’s duties;
2. Sales or leases of properties and enterprises (going concerns);
3. Distribution of profits or losses;
4. Decisions regarding any claims for damages against the company;
5. Approvals of loans or company debts;
6. Refund of additional payments authorized in the Articles;
7. Purchases and sales of real estate unless the Articles state consent are not required during a Shareholders’ Meeting;
8. Other issues reserved by the Articles to be decided at Shareholders’ Meetings.
The Commercial Companies’ Code requires the meeting to be held at the registered office unless the Articles specify another location within Poland. Shareholders have the right to appoint their representative to attend the meeting acting under a notarized Power of Attorney.
Taxes
The LLC is subject to corporate taxation just like a corporation. The corporate tax rate is 19%.
Poland also has a dividends tax which is also 19%.
Note, U.S. citizens and taxpayers from countries taxing worldwide income must declare all income to their tax authorities.
Public Records
All records filed with the Commercial Registry are available for public inspection.
Registration Time
Registering a Poland LLC can occur online taking up to one business day for approval.
Shelf Companies
Shelf companies are available for purchase in Poland.
Conclusion
A Poland Limited Liability Company (LLC) has these benefits: 100% foreign ownership, limited liability, one shareholder, one director, a low required minimum share capital, and a fast online one day registration.
