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Joint Stock Company

Meaning of Joint Stock Company

 

A joint stock company in Poland (S.A.) differs from a limited liability company (apart from the required minimum of share capital and some other features) in that there is a possibility of using bearer shares. This company may be formed by one or more persons. A sole-shareholder limited liability company is not allowed to form a joint-stock company formation as the single promoter. The statute of a join-stock company shall be executed in the form of a notarial deed. The minimum capital is PLN 100 000 and is divided into equal nominal shares of at least PLN 0,1. In a join-stock company a supervisory board is obligatory and supervises the activity of the company on an on-going basis. The supervisory board is composed of at least three members appointed by the General Meeting. A member of the current management board, the company's liquidator or some of the company's senior employees (e.g. chief accountant, legal counsel, etc.) may not be members of either of the company's supervisory bodies. The General Meeting (in a join-stock company) or the Meeting of Shareholders (in a limited liability company) is a decision-making body in matters of major significance to the company. Its meeting may be ordinary or extraordinary. An ordinary meeting should take place once a year. It should be held during the first six months of the financial year. 

Companies With Foreign Participation in Poland

How the Law Works for Foreigners in Poland

 

According to Art. 13 of the Business Activity Law the foreigners from EU and EFTA enjoy the same rights as the Polish citizens and companies by taking up and conducting business activities on the territory of the Republic of Poland.

The citizens of foreign states who are not from EU and EFTA and who among others have received a permit to settle on the territory of the Republic of Poland, a permit to stay as a long-term resident of EC, a status of refugee granted in the Republic of Poland, a consent for tolerated stay or enjoy temporary protection within the territory of the Republic of Poland, shall enjoy the same rights as the Polish citizens by establishing and conducting business activities on the territory of the Republic of Poland.

Other foreigners may conduct business in Poland in the form of companies regulated by commercial law like: limited partnership, limited joint-stock partnership, limited liability company, joint stock company.

Procedures for Establishing a Company in Poland

How to Register Company in Poland?

 

Currently the limited liability company in Poland can be registered in two ways:

  1. In a simplified form, using S24 form, through portal of the Ministry of Justice (without notary deed, only contributions in money, the standard deed should be used)
  2. In a traditional way (with a notary deed, also non-cash contributions accepted, the standard deed is not obligatory)

Traditional way:

  1.  Signing of a company deed or statute;
  2.  Entry in the National Court Register;
  3.  Issuance of a statistical number (REGON);
  4.  Tax office notification;
  5.  Opening a bank account;
  6.  VAT registration.

Original documents from EU countries have to be translated into Polish by an authorized translator.

Original documents in foreign languages from non-EU countries have to be confirmed by the appropriate Polish embassy or consulate as having being prepared in accordance with the law prevailing in the country of the parent entity.

Civil Partnership in Poland

What is Civil Partnership?

 

The basis of a civil partnership in Poland is regulated in the Civil Code of 23rd April 1964 in Art. 860 and subsequent. By a deed of partnership the partners shall undertake to promote the attainment of a common economic objective by acting in a specific manner and in particular, by making contributions. The most important is that the deed of partnership shall be made in writing. The partners shall bear joint and several liabilities for the partnership's obligations. International agreements on reciprocity should be in place. Otherwise, a foreign investor is required to present a certificate issued by the competent Polish representation abroad, stating that, in accordance with the principle of reciprocity, Polish entrepreneurs are permitted to conduct business activity in the country in which the investor has permanent residency or a registered office. The partners pay Personal Income Tax (PIT).

Representative Office

Meaning of Representative Office

 

Representative offices may only carry out activities relating to advertising and promotion of the foreign person. In order to establish a representative office an entry is required into the register of representative offices kept by a relevant ministry. In addition, a representative office is not a self-balancing unit. Any division of property by the entrepreneur, if effected, is of purely technical and organizational nature.

A representative office in Poland is obliged to:

  1. use the name of the foreign entrepreneur in the language of the country in which his or her registered office is located, together with a Polish translation of the name of the economic entrepreneur's legal form and the phrase "przedstawicielstwo w Polsce",
  2. keep separate books in accordance with the provisions of laws on accountancy,
  3. notify the Minister of Economy of any factual and legal changes concerning data included in the application and in the statement of the foreign entrepreneur concerning the extent to which the share capital has been financed by contributions, as well as of the commencement and termination of any proceedings conducted to wind-up the business of the foreign entrepreneur and of the forfeiture of his right to conduct business activity or possess property, no later than 14 days from the time upon which such events take place.
Branch Office in Poland

Meaning of Branch Office

 

Branch offices in Poland are able to undertake a variety of economic and trading activities provided that:

  • the activities of the branch correspond to that of the parent entity,
  • the branch is registered under the same name as the parent entity together with a Polish translation of the entity's legal form and the phrase "oddział w Polsce" added,
  • separate accounting records in the Polish language and in accordance with the Polish accounting regulations are maintained, and if liquidation has been commenced or if the foreign entity has lost its right to carry out business activity or to dispose of its property, the fact is notified to the relevant Polish authorities.

Up to the time the National Court Register is set up, branch offices are subject to registration in the Register of Entrepreneurs kept by the district courts. In principle, a branch may be established on the condition of reciprocity between Poland and the country of origin of the foreign entity establishing the branch office.

Registered Partnership in Poland

Definition of Registered Partnership Company

 

In accordance with the definition a registered partnership in Poland shall be a partnership which conducts an enterprise under its own name and is not any other commercial company. Such a partnership does not possess a legal personality, though it may act on in its own behalf, and has its own assets and debts. Every partner shall be liable for obligations of the partnership without limits, with all his assets jointly and severally with the remaining partners. In order to be effective, a deed of partnership must be executed in writing, whereupon the partnership should be entered into the National Court Register.

Professional Partnership

What is Professional Partnership in Poland

 

The Code introduces two categories of partnerships unknown under the Commercial Code of 1934. The first one is a professional partnership designed for individuals performing regulated professions and rendering their services as a partnership by running an enterprise under its own business name. This partnership has no legal personality. Professional partnership is available for investors wishing to conduct economic activities defined as "free professions". Partners in this partnership may be persons authorized to practice the following professions: attorney, pharmacist, architect, expert, auditor, insurance broker, tax consultant, accountant, physician, dental surgeon, veterinary surgeon, notary, nurse, midwife, legal counsel, patent agent, property valuer and sworn translator. The deed of this partnership shall be made in writing. A partner shall not bear liability for partnership's obligations which arise in relation to the practicing of liberal profession by the remaining partners within the partnerships, as well as for partnership's obligations resulting from the actions or default of persons employed by the partnership, such persons being subordinate to another person. The partnership should be entered into the National Court Register. The company is created upon its entry in the register. International agreements on reciprocity should be in place. Otherwise, a foreign investor is required to present a certificate issued by the competent Polish representation abroad, stating that, in accordance with the principle of reciprocity, Polish entrepreneurs are permitted to conduct business activity in the country in which the investor has permanent residency or a registered office.

Limited Partnership

Business definition of limited partnership company in Poland

 

A limited partnership in Poland is a company, in which at least one partner is a general partner and has an unlimited liability towards the partnership's creditors (unlimited partner) and the liability of at least one other partner is limited (limited partner). The limited partner is responsible for the company's liabilities only to the value of his capital contribution. The deed of this company shall be made in a notary form. The limited partnership comes into existing after entry into the National Court Register.

Limited Join-Stock Partnership

What is limited join-stock partnership company in Poland?

 

A limited join-stock partnership shall be a partnership in which at least one partner (general partner) has unlimited liability towards the partnership's creditors and at least one partner is a shareholder. The initial capital of this company shall amount to at least PLN 50.000. A supervisory body may be appointed in this partnership. The supervisory board shall exercise permanent supervision over the activity of the partnership in all areas of such activity. This partnership does not possess a legal personality, though it is in a way a hybrid of a joint-stock company and limited partnership (limited joint-stock partnership).

Limited Liability Company

How to set up limited liability company in Poland and its definition

 

It is a very popular way of conducting business in Poland among medium and large companies and foreigners. This form of activity is usually established for the purpose of operating business on a large scale. The company deed (articles of association) must be prepared in the form of a notarial deed, or is otherwise null and void. The founders can be one or more legal or natural persons. The initial capital of the company must not be less than PLN 5.000, and the initial value of one share must not be less than PLN 50. The Company is liable for its debts and obligations with its whole property. There are no special requirements for foreign investors.

A limited liability company act may be formed by one or more persons for any legitimate purpose. Founders may not be another limited liability company as the single promoter. The shareholders are not liable for the obligations of the company. A limited liability company is a legal entity. Limited liability companies having their seats abroad may establish branches or representations on the territory of the Republic of Poland.

Establishment of a limited liability company:

  1. Signing Articles of Association in the notary's office. The cost of signing the articles is a notary's fee and a stamp duty. The amount of both charges depends on the amount of the company's share capital.
  2. The management board shall submit the Articles of Association to the National Court Register. Registration takes place at the district court having jurisdiction over the principal place of business of the company being formed. Upon being registered the company acquires legal personality. The fixed charge amounts to PLN 600.*
  3. Opening the company's bank account. A company is obligated to open a bank account in Polish zlotys (at any bank, except the National Bank of Poland) and may also hold foreign currency accounts with a bank authorized to deal in foreign currency (subject to the Foreign Exchange Law).
  4. VAT registration. After receiving the decision on registration, the company can register for VAT reasons in the Tax Office.

*Along with the registration documents filed to the National Court Register, the management board applies for the following:

  • the company's statistical number REGON assigned by a Provincial Statistical Office,
  • the company's registration with the Statistical Insurance Institution (ZUS) as an employer,
  • the company's registration with the Tax Office in respect of income tax and VAT (taxpayer number - NIP).

Registration Court sends the above notifications to the right departments. It does not verify their correctness or completeness.

 

Joint Stock Company

Meaning of Joint Stock Company

 

A joint stock company in Poland (S.A.) differs from a limited liability company (apart from the required minimum of share capital and some other features) in that there is a possibility of using bearer shares. This company may be formed by one or more persons. A sole-shareholder limited liability company is not allowed to form a joint-stock company formation as the single promoter. The statute of a join-stock company shall be executed in the form of a notarial deed. The minimum capital is PLN 100 000 and is divided into equal nominal shares of at least PLN 0,1. In a join-stock company a supervisory board is obligatory and supervises the activity of the company on an on-going basis. The supervisory board is composed of at least three members appointed by the General Meeting. A member of the current management board, the company's liquidator or some of the company's senior employees (e.g. chief accountant, legal counsel, etc.) may not be members of either of the company's supervisory bodies. The General Meeting (in a join-stock company) or the Meeting of Shareholders (in a limited liability company) is a decision-making body in matters of major significance to the company. Its meeting may be ordinary or extraordinary. An ordinary meeting should take place once a year. It should be held during the first six months of the financial year. 

The Registartion of Entrepreneurs

Importance scope of information about registration a company in Poland

 

According to the Law of the National Court Register of 7th October 1997, as of 1st January 2001 companies, commercial partnerships must be registered in the Register of Entrepreneurs, which is part of the National Court Register managed by the district courts.

The Register of Entrepreneurs is open to the public. It consists of six parts, including as follows:

  • part 1 – the company's legal form, REGON number, its previous number in a commercial register or register of business, place of conducting business activity, name and address of the registered office of the company, indication of the shareholders of commercial partnerships, any branches of the company (and whether it was covered by contributions in cash or in kind), indication of shareholders of limited liability companies with the number of shares held by each, shareholders of joint-stock companies holding registered shares, the company's statutes and any subsequent amendments;
  • part 2 – the representatives, the supervisory bodies and any holders of a commercial power attorney of the company,
  • part 3 – scope of activity, information on submission of the annual financial statements of the company, auditor's reports, resolutions on the adoption of the financial report and distribution of profits and losses,
  • part 4 – information of outstanding tax and other payments and social security contributions covered by enforcement if they were not paid within thirty days of the initiation of enforcement proceedings, creditors of the company, information of the regarding motions on initiation or initiation of agreement proceedings or declaration of bankruptcy, motions of these proceedings or on the annulment of the arrangement,
  • part 5 – information of appointment or dismissing of custodians for the company,
  • part 6 – information of the initiation and termination of liquidation proceedings, dissolution and annulment of the company, mergers and transformations of the company, the number and date of notification from the Competition and Customer Protection Office on the lack of reservations concerning and intended merger.

An individual, who conducts economic activity, is registered in a register of business activity kept by the communes. The registration books, in which companies in organization are also listed, are kept by the head of the commune, the mayor or president of the town.

The foreign entrepreneur must meet the following formal requirements in order to obtain an entry in the Register of Entrepreneurs:

  • disclose the first name, surname and address in Poland of a person authorized to represent the foreign entrepreneur in the branch office,
  • attach a sample signature certified by a notary or a person authorized to represent the foreign entrepreneur in the branch office,
  • attach a certificate issued by the appropriate Polish representation abroad, attesting that in accordance with the principle of reciprocity, Polish entrepreneurs are permitted to operate in the country in which the foreigner has permanent residency or a registered office on the same terms and conditions as are provided for entrepreneurs having permanent residency or a registered office in that country; such a certificate is not required if an agreement providing for the principle of reciprocity is in a place between Poland and the relevant country or if international agreements are ratified by Poland provide otherwise,
  • if he operates pursuant to a founding deed, articles of association or a statute - place such an instrument in the registration files of a branch office together with a sworn translation into Polish; if the foreign entrepreneur sets up more than one branch office in Poland, such instrument may be placed in the registration files of only one branch office, provided that a reference is made in the registration files of other branch offices together with the identification of the Court in which such files are kept and the number of the Registry division,
  • if he exists or operates pursuant to an entry in the Register - place an excerpt of such Register together with its sworn translation into Polish in the registration files of a branch office,
  • if he operates in the form of a company not governed by the laws of any of the EU Member States - provide a statement in which he or she indicates to what extent the share capital has been financed by contributions, provided that the laws of the country in the territory of which the company has a registered office allows for a partial contribution towards the share capital.

Cost of registration:

  • PLN 500 + PLN 100 fee for a mandatory announcement in Court and Economic Monitor (Monitor Sądowy i Gospodarczy),

Cost of amending the registration data:

  • PLN 250 + PLN 100 fee for mandatory announcement in Court and Economic Monitor (Monitor Sądowy i Gospodarczy).

 


 

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CENTRAL EVIDENCE OF INFORMATION ON BUSINESS ACTIVITY

1. Legal form:
- individuals and partners in civil partnerships,

2. Registration authority:
- municipality of town,

3. Registration procedure:
Requests are sent in an electronic form, using the website of the Central Evidence. They can be also delivered personally to the municipality or submitted by the Post Office (in the latter case the signature must be confirmed by a notary).

4. Document confirming the entry:
- certificate of registration in the Central Evidence of Information on Business Activity,

5. Cost of registration:
- free of costs

6. Cost of amending in the register of business activity:
- free of costs

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