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Limited Liability Company


What is the main source of law authorising this entity form?

The Commercial Companies Code (CCC) (Kodeks spółek handlowych – KSH).


Give a brief summary of this entity form, including

Does the entity possess separate legal personality?

An LLC is a separate legal person.

(Maximum) period of existence

There is no maximum period of an LLC’s existence. They may be established for a definite or an indefinite period of time.

Governing document(s)

The main governing document of an LLC is its Articles of Association (umowa spółki), which must be executed by the shareholder(s) before a notary public. Alternatively, the Articles of Association may be executed via a special IT system, however, the contents of such articles will be limited only to certain basic provisions.

Liability of incorporators / shareholders

An LLC’s shareholders are not personally liable for its obligations. Their financial risk is limited to the amount invested in the LLC’s share capital.

(Governing) bodies

There are two (2) mandatory statutory governing bodies for LLCs – a Management Board (Zarząd) and the Shareholders’ Meeting (Zgromadzenie Wspólników). The shareholders may optionally (where the LLC’s share capital exceeds PLN 500,000 and there are more than 25 shareholders) also establish a Supervisory Board (Rada Nadzorcza) and/or an Audit Committee (komisja rewizyjna).

Other particularities

The minimum share capital for an LLC is PLN 5,000 (approximately EUR 1,200), which the shareholder(s) can contribute in the form of cash and/or in-kind contributions. The minimum nominal value of one share is PLN 50 (approximately EUR 12). The share capital must be paid up in full before filing for the LLC’s registration.


Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions, equity acquisitions, etc.)?

An LLC may be involved in international asset/share deal transactions. Regarding mergers, pursuant to the CCC and specific EU legislation, an LLC may enter into legal mergers with other entities established within the EU.


Can this type of entity be publicly listed or held?

No, under Polish law, the shares of an LLC cannot be traded on either regulated or non-regulated markets. Only joint stock companies (S.A.) may be listed/publicly traded.


Can this type of entity be used for a non-profit or charitable organization?

An LLC may be used for non-profit or charitable purposes. However, the most popular form for entities engaged in such activities in Poland is a foundation (fundacja) or an association (stowarzyszenie), which are dedicated non-profit entities entitled to numerous tax privileges.





Give a brief summary of the process of incorporation, formation, or organization, including

Main documents required

Main documents required for the incorporation of an LLC:

  • Articles of Association – usually executed in the form of a notarial deed before a Polish notary public, except for e-LLCs, where the Articles of Association are executed electronically via a special IT system;
  • Documents confirming the appointment of the Management Board and, if required, other corporate bodies, including statements by the appointed members consenting to their appointment;
  • A list of shareholders;
  • A list of entities entitled to appoint members of the Management Board; and
  • A statement signed by all members of the Management Board confirming that the shareholder(s) duly made their contribution(s) to the share capital.

An LLC’s object/purpose must be specified in its Articles of Association and be listed according to the appropriate Polish Classification of Activities (Polska Klasyfikacja Działalności, PKD) code.

Involvement of notary, company register, governmental authorities

An LLC must be registered in the register of entrepreneurs (rejestr przedsiębiorców) of the National Court Register (Krajowy Rejestr Sądowy), which is maintained electronically, in order to complete its incorporation and achieve legal personality. Upon the execution of its Articles of Association before a notary public, an LLC comes into existence as an “LLC in organisation” (sp. z o.o. w organizacji) and may begin doing business.

Timing (estimate)

The motion for an LLC’s registration must be filed with the appropriate registry court no later than six (6) months after the execution of its Articles of Association by its shareholder(s). The registration process itself takes approximately four (4) to five (5) weeks.

Main costs, including registration and similar fees (excluding legal fees)

The notarial fee due for the execution of an LLC’s Articles of Association will depend on the value of its initial share capital. The fee for the registration of an LLC in the register of entrepreneurs of the National Court Register should not exceed PLN 600 (approximately EUR 140).


Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

An LLC’s object/purpose must be specified in its Articles of Association and be listed according to the appropriate Polish Classification of Activities (Polska Klasyfikacja Działalności, PKD) code.


Minimum number of incorporators / shareholders and residency requirements

An LLC may be established by one (1) or more persons/entities, however, an LLC with a single shareholder may not be established by another LLC with a single shareholder. There are no residency requirements for the shareholder(s).


Minimum number of directors (or other applicable officers) and residency requirements

The must be at least one (1) member of the Management Board of an LLC. There are no residency requirements for members of the Management Board.


Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

The minimum share capital of an LLC is PLN 5,000 (approximately EUR 1,200), which the shareholder(s) can contribute in the form of cash and/or in-kind contributions. The share capital must be paid-up in full before filing for the LLC’s registration. An LLC must also open a bank account.


Is the physical presence of incorporators / directors required in the jurisdiction for incorporation, formation or organization?

An LLC’s Articles of Association may be executed under a power of attorney (PoA). Such a PoA must be executed in the form of a notarial deed and legalised/apostilled if executed outside of Poland.


Is a tax identification number, or equivalent, required? If so, how is it obtained?

The Tax Office (urząd skarbowy) assigns a NIP (tax identification number, numer identyfikacji podatkowej) automatically upon an LLC’s entry in the register of entrepreneurs of the National Court Register.





What is the title of the applicable company registry?

The National Court Register (Krajowy Rejestr Sądowy) is the Polish company register and is maintained by the appropriate division of the District Court (sąd okręgowy) with territorial jurisdiction over an LLC’s registered office.


What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.: Articles , Ownership identification (direct and/or indirect ownership, 'beneficial owners') , Group structure , Share capital , Directors , Accounts , Insolvency, good-standing, liquidation , Liens and encumbrances on the shares , Liens and encumbrances on assets of the entity , Other (e.g. litigation, tax matters)

The following information must be filed with the National Court Register and is publicly available –

  • the LLC’s Articles of Association and all subsequent amendments thereto;
  • date of the LLC’s incorporation;
  • the LLC’s business name and the address of its registered office;
  • scope of the LLC’s business activities, according to their PKD code;
  • the value of the LLC’s share capital together with the number and nominal value of shares;
  • types of contributions made by the LLC’s shareholder(s);
  • the LLC’s financial year along with its annual financial statements;
  • full name(s), address(es) and, if applicable, personal identification number (PESEL) of the member(s) of the Management Board;
  • full names of the members of the Supervisory Board (if applicable);
  • full name(s), address(es) and, if applicable, personal identification number (PESEL) of the shareholder(s);
  • information regarding the LLC’s liquidation; and
  • information regarding the LLC’s merger, division and/or transformation.




What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

The Management Board (Zarząd).

Members of the Management Board conduct the LLC’s affairs and represent the LLC in all court and out-of-court activities related to the LLC, except for those activities which are reserved to the competence of the Shareholders’ Meeting or Supervisory Board under the provisions of the CCC or the LLC’s Articles of Association.


How are the members of the executive body appointed, dismissed and replaced?

Subject to the provisions of the Articles of Association, members of the Management Board are appointed and dismissed by the Shareholders’ Meeting. Members of the Management Board must be natural persons with full legal capacity. The initial members of the Management Board may be appointed upon the execution of the LLC’s Articles of Association in the same notarial deed.


Is it possible to appoint corporate directors or must all directors be natural persons?

Only natural persons with full capacity for acts in law can be appointed as members of the Management Board.


Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

No, there is no requirement to have non-executive directors in an LLC. Polish law follows the two-tier structure. A Supervisory Board and/or Audit Committee may be established in an LLC and must be established where the LLC’s share capital exceeds PLN 500,000 and there are more than 25 shareholders. Subject to the provisions of the Articles of Association, the members of the Supervisory Board and Audit Committee are appointed and dismissed by the Shareholders’ Meeting. Members of the Supervisory Board and Audit Committee must be natural persons with full legal capacity and cannot be members of the Management Board.


What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

The Shareholders’ Meeting has all rights and responsibilities which are not otherwise reserved under law or the Articles of Association to the members of the Management Board or the LLC’s other corporate bodies. The main powers of the Shareholders’ Meeting include appointing and dismissing members of the Management Board and other corporate bodies (if established and not otherwise reserved by the Articles of Association), amending the Articles of Association, approving annual financial statements, increasing, or decreasing the LLC’s share capital, redeeming shares, distributing profits, and granting votes of acceptance (absolutorium) to the members of the LLC’s corporate bodies.


What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

Resolutions of the Shareholders’ Meeting are adopted by an absolute majority (50% + 1) of votes cast. This general rule may be varied by law or the Articles of Association to require another specified majority.


Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

A Supervisory Board and Audit Committee are mandatory if an LLC’s share capital exceeds PLN 500,000 (approximately EUR 125,000) and there are 25 or more shareholders.


What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

An LLC must keep accounting records sufficient to determine its financial position at any given moment.

An LLC’s annual financial statements must be prepared by the Management Board in electronic form within three months of the end of each given financial year and, in general, must be executed with certified electronic signatures by all members of the Management Board and the person responsible for keeping the LLC’s books.

The Annual Shareholders’ Meeting must be held within six months of the end of each given financial year. Consequently, if an LLC’s financial year is the calendar year, its financial statements for a given year must be approved by the Annual Shareholders’ meeting no later than on 30 June of the following year.

The financial statements, together with the resolution of the Shareholders’ Meeting approving them, must be uploaded to the registry court’s IT system within 15 days of their approval by the Annual Shareholders’ Meeting.


Is the entity permitted to determine its own financial year?

Yes, an LLC’s financial year does not have to coincide with the calendar year.


Is the entity subject to any statutory (external) auditor obligations?

Medium and large companies, as defined by law, are obliged to have their accounts audited by an external auditor each financial year. In principle, the auditor is appointed by the Shareholders’ Meeting.


Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

No, there are no such obligations in the case of LLCs.





What is the title designated for ‘ownership interests' (e.g. shares, quota, interests, membership)?

Shares (udziały).


Are different classes of ownership interests possible? If so, what are some examples of different classes?

Preference shares (udziały przywilejowane) may be issued, and holders of such shares may be granted certain preferences with respect to, for example, voting rights, dividends, and participation in the distribution of assets on the LLC’s liquidation. The relevant rights pertaining to shares must be defined in the Articles of Association.


What documentation is required for the transfer of ownership interests?

Share transfer agreements must be executed in writing with signatures certified by a notary, under pain of nullity. An LLC’s Articles of Association may provide for additional requirements for the transfer of shares (for example, prior approval of the transfer, pre-emptive rights of other shareholders, etc.).


Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

An LLC must be formally notified of the transfer of shares in order to enter the new shareholder(s) into the share ledger (księga udziałów) maintained by the Management Board. Changes in an LLC’s shareholding must also be disclosed in the register of entrepreneurs of the National Court Register (except for a shareholder(s) holding less than 10% of an LLC’s shares). In certain cases, governmental approvals or other restrictions may apply, in particular where an LLC owns agricultural land.


Are there any applicable stamp duties imposed when transferring ownership interests?

There is no stamp duty due for the transfer of shares. However, the transfer of shares is subject to a so-called, civil law transactions tax (podatek od czynności cywilnoprawnych) equal to 1% of the market value of the shares transferred. The party acquiring the shares is liable for this tax and must file the relevant tax return with the appropriate tax authorities.


How are shares issued? (including information on payment obligations, registration requirements)

Under the CCC, new shares can be issued as follows –

  • by increasing the LLC’s share capital pursuant to a resolution of the Shareholders’ Meeting made in the form of a notarial deed (by way of the amendment of the relevant section(s) of the Articles of Association); or
  • by increasing the LLC’s share capital pursuant to a resolution of the Shareholders’ Meeting made in writing, where permitted by the LLC’s Articles of Association. If such a provision is included in the Articles of Association, it must specify the amount to and the date by which the share capital can be increased in this manner. According to Polish jurisprudence, this simplified procedure only applies to an LLC’s current shareholder(s) and shares issued in this manner are taken up the current shareholder(s) proportionally to their current interest in the LLC.

The issue of new shares is effective upon the registration of the LLC’s increased share capital in the register of entrepreneurs of the National Court Register and should be recorded in the entity’s share ledger.


Further information on equity contributions, e.g. , Non-cash payments on shares; (Share premium) contributions without issuance of shares , Can partially paid shares/ownership interests permitted and what are the restrictions on them?

An LLC’s shareholder(s) may contribute to its share capital in the form of non-cash payments, i.e., in the form of an in-kind contribution. An LLC’s Articles of Association must, in detail, state the subject of such a contribution and the shareholder(s) making said contribution together with the number and nominal value of shares taken up in exchange for it. Although there are no special requirements regarding the manner in which the value of such non-cash payments is determined, both the shareholder(s) making such contributions and the members of the Management Board are jointly and severally liable to compensate the LLC if the value of non-cash payments made was significantly overestimated in comparison to the sale value thereof, if the members of the Management Board were aware of this overestimation when filing for the registration of such a contribution. Premium contributions cannot be made without the issue of shares or increasing the nominal value of existing shares.


Any requirements with respect to share cancellation, share repurchase and other capital reductions

Shares may only be redeemed if permitted by the Articles of Association and the LLC is registered in the National Court Register. The CCC provides for three forms of share redemption:

  • Voluntary redemption – the consent of the shareholder(s) is required;
  • Compulsory redemption – the consent of the shareholder(s) is not required. The Articles of Association must stipulate the procedure for such a redemption; and
  • Automatic redemption – the shares are redeemed upon the occurrence of certain events specified in the Articles of Association.

Under the CCC, an LLC may not acquire its own shares except where:

  • Shares are acquired in enforcement proceedings in order to satisfy the LLC’s claims which cannot otherwise be satisfied from the shareholder’s other assets;
  • Shares are acquired for the purpose of their redemption; and
  • Shares are acquired in other circumstances provided for in the CCC.

An LLC’s share capital may be reduced either by decreasing the nominal value of its shares or by redeeming its shares. Either manner of reducing an LLC’s share capital requires the adoption of a resolution to that effect by the Shareholders’ Meeting. The reduction in the LLC’s share capital is effective upon its registration in the register of entrepreneurs of the National Court Register.


Any requirements with respect to distributions to shareholders?

Under the CCC, amounts to be distributed among the shareholders may not exceed the LLC’s profits from the previous financial year, increased by undistributed profits from previous years and by amounts subject to distribution transferred from the LLC’s supplementary capital (kapitał zapasowy) and reserve capital (kapitał rezerwowy) created out of profits, and reduced by uncovered losses, owned shares, and any amounts which, under the CCC or the LLC’s Articles of Association, must be transferred from the previous years’ profits to the supplementary or reserve capitals. The Management Board is authorised to pay the shareholder(s) an advance against the dividends for a given financial year, if the LLC has sufficient funds to do so.


Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Yes.





Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

An LLC should, among other things, have legal title to the premises of its registered office or seat (for example, under a lease agreement or by purchasing said premises), maintain its accounts, open a bank account, remunerate the members of its Management Board etc. Such costs are difficult to assess. Unlike Joint Stock Companies, minutes of an LLC’s Shareholders’ Meeting do not, in general, have to be drawn up by a notary public, therefore, the usual maintenance costs do not include notarial fees. An LLC must hold an Annual Shareholders’ Meeting once per financial year to approve its financial statements for the previous financial year. If required by law, an LLC’s financial statements must be examined by an independent external auditor, resulting in additional annual costs. However, the actual submission of financial statements to the National Court Register is free of charge. All other changes to the information disclosed in the National Court Register must be notified to the registry court for a fee, but such court fees are relatively low and do not exceed EUR 100 per motion. The motion to register an LLC’s ultimate beneficial owner in the separate register maintained by the Ministry of Finance is free of charge.


What are the general corporate tax rates? (Specify if there is a national versus local distinction).

An LLC with its registered office or Management Board in Poland is obliged to pay Polish corporate income tax (CIT) on all of its income. CIT is collected at a flat rate of 19% or 9% (for small taxpayers).





Summary of any specific matters, e.g. recent or prospective major legal developments

Since 13 October 2019, LLCs (and certain other legal entities) are obliged to provide and update information on their beneficial owners to the Central Register of Beneficial Owners (Centralny Rejestr Beneficjentów Rzeczywistych) within, at most, fourteen (14) days of an LLC’s registration in the register of entrepreneurs of the National Court Register, and within, at most, fourteen (14) days of any change to the information provided and disclosed. Notices to the Central Register of Beneficial Owners are free of charge and must be made by a person authorised to represent the company according to its rules of representation (note that such notification cannot be made under a power of attorney), by means of electronic communication and using a certified electronic signature (either a qualified electronic signature (kwalifikowany podpis elektroniczny) or an electronic signature confirmed by an ePUAP trusted profile (podpis elektroniczny potwierdzony profilem zaufanym ePUAP)). Such notifications are made subject to a statement, under penalty of perjury, that the data submitted to the register is true and accurate. Information disclosed in the Central Register of Beneficial Owners is publicly available.

On 13 October 2022 amendments to the CCC regarding introduction of new rights and obligations for LLCs (and their corporate bodies) associated with membership in the corporate group, entered into force. The amendments allow existing holdings to establish, so-called, corporate groups if the conditions specified in the CCC are fulfilled and to disclose their participation therein in the register of entrepreneurs of the National Court Register. Further, the amendments provide for (i) the possibility for group companies to pursue the corporate group’s interest in addition to their own, (ii) for a parent company to gain a right to issue binding instructions to its subsidiaries, (iii) the parent company’s liability for damage suffered by their subsidiaries resulting from the performance of binding instructions, as well as (iv) lack of liability for the members of a subsidiary’s governing bodies and its liquidator towards the subsidiary for damage caused by the performance of binding instructions. In addition, new provisions entitle the parent company to buy-out the shares held by the minority partners of its subsidiaries (a so-called ‘squeeze-out’), whereas minority shareholders are entitled to demand the compulsory purchase of the shares they hold in the subsidiary (a so-called ‘sell-out’). Other changes include provisions which strengthen the position of Supervisory Boards (in particular, the Supervisory Boards may be entitled to appoint an external advisor who, at the company’s cost, will examine a specified matter regarding the LLC’s activities or financial condition; moreover, the Supervisory Boards have the right to demand information and documents, including in particular information, reports and/or explanations concerning subsidiaries and related entities, which shall be provided under penalty of fines or limitations on liberty) and impose new duties on Management Boards, clarify the calculation of terms of office for members of an LLC’s corporate body (to be calculated in full financial years, unless provided otherwise in the LLC’s articles of association), codify directors’ duty of loyalty, more precisely define the scope of the non-disclosure duty in the relationship between an LLC and the members of its corporate bodies, and introduce the business judgment rule with respect to the compensatory liability regime applicable to members of an LLC’s governing bodies etc.

On 27 May 2022, the amendment to the Act of 18 November 2020 on electronic service came into force, deferring the obligation for LLCs to obtain a special electronic address for service (not a regular e-mail address) entered in a public database of electronic addresses which will primarily be used for communications with public entities - without specifying a precise deadline for its implementation. Said electronic address for service will be disclosed in the National Court Register, however, the technical solutions to enable the delivery and receipt of correspondence in this manner are still to be implemented. The maximum deadline for implementation has been set on 1 January 2024.

Amendments to the CCC are currently subject to legislative works which, once they enter into force, will adapt Polish law to EU regulations on cross-border transformation, mergers and divisions of companies, including LLCs.




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Anna Wojciechowska
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WKB Wierciński, Kwieciński, Baehr spółka jawna
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