A limited liability company is an independent entity with legal personality. It is the most common type of company with legal personality in Poland. For entrepreneurs planning economic endeavours on a larger scale or connected with considerable risk, the choice of a limited liability company is usually very advantageous.
A limited liability company is a preferred legal structure for:
- Joint endeavours with small number of shareholders;
- For shareholders who want to:
a) maintain direct supervision over managing company affairs,
b) limit their risk to the assets invested in the company in the form of contributions (no personal liability with regard to company debts);
- Limited liability of shareholders;
- Relatively low mandatory share capital (at least 5,000 PLN);
- Possibility to invest considerable capital – shareholders have significant impact on company activity;
- Possibility to conduct virtually all types of enterprises in this form.
A limited liability company can be established by one or more persons (natural or legal) in any legally acceptable goal, except from another limited liability company established by one person. It’s a share-holding company, in which partners are bound to benefits specified in the agreement only. Share capital of the company needs to be at least 5000 PLN and a nominal value of a single share can’t be lower than 50 PLN.
Partners are not responsible for company’s commitments.
If an act of law or company’s agreement does not state otherwise, partner’s rights and duties are equal. It’s partner’s duty to enter a contribution to cover shares in the share capital that he or she holds in the company. If the total or partial contribution to the company is supposed to be non-monetary, company’s agreement should, in detail, describe a subject of the contribution and specify the partner who enters the contribution as well as a number of and
a nominal value of shares held in exchange. At the time of conclusion of company’s agreement, a limited company in organization is created.
On top of conclusion of company’s agreement, the following conditions need to be met to create a limited liability company:
- partners need to enter contributions to cover entire share capital,
- a board of directors needs to be created,
- a supervisory authority (supervisory board or audit committee) needs to be created, if it’s required by an act of law or company’s agreement (in companies having share capital higher than 500 000 PLN and there is more than 25 partners, supervisory board or audit committee should be created),
- registry entry.
A limited liability company agreement requires a specific form – a notarial deed.
Partners agree on company’s name in the agreement – it can be any combination of words, but it has to contain additional token ‘a limited liability company’.
Company’s name should be adequately differentiate from names of other entrepreneurs operating on the same market, not to mislead, specifically as to the person, core of business, placePoli of business and a source of supply.
Moreover, agreement should specify company’s headquarters, core of business, share capital amount, can a partner have more than one share and a number and a nominal value of shares held by particular partners.
Any benefits awarded to a partner additionally or duties to the company put on a partner should be specifically described in the agreement under penalty of ineffectiveness to the company. Planned shares of specific entitlements (i.e. right to vote, right to dividend or mode of participation in division of assets in case of a liquidation of the company) must be specified in the company’s agreement.
A limited liability company is represented by a board of directors, that also manages company’s affairs. Persons appointed from among or outside of partners can be members of the board of directors. A way in which a company is represented by a board made of multiple persons is described in the company’s agreement and in case of lack of such decision, cooperation of two board members or one board member and a proxy is required to make statements in the name of the company.
A proxy can be appointed by the entire board of directors and each member of the board has a right to dismiss him or her.
Formation of the company is reported by the board to a registry court adequate in terms of company’s headquarters..
Registry application should be submitted on a KRS-W3 form with attachments of KRS-WE (regarding company’s partners), KRS-WM (with information regarding core of company’s business) and KRS-WK (regarding persons authorized to represent the entity).
There may be a need of submitting other forms which symbols are mentioned in the registry application form, i.e. when forming company’s branches of appointing proxies. Forms need to be signed by all members of the board of directors. A proof of settling a court charge of 1000 PLN should be, without notice, added to the application, as well as a charge of 500 PLN for the Court and Commercial Journal announcement.
Apart from the required forms and proofs the following documents (in originals or in officially certified copies) should be attached:
- company’s agreement,
- a list of partners, which should contain names and surnames or a name and headquarters of each partner, address, number and a nominal value of his / her shares, and in the case of a single person company also a mention that he/she is the only company’s partner,
- statement of all members of the board of directors that contributions to cover the capital share were entered in full by all partners,
- officially certified signatures patterns of persons appointed to represent the company (board members and proxies),
- proof of
- evidence of the appointment of the individual members of the company if the appointment is not constituted by company’s agreement.
If formation of a company was not submitted to the registry court within six months from the day of conclusion of company’s agreement or if court’s order denying to register a company became legally valid, company’s agreement is terminated.
Source: Ministry of Justice