Poland - Types of Company

The formation and operation of companies is governed by the Code of Commercial Partnerships and Companies (Kodeks Spółek Handlowych). The new Code of Commercial Partnerships and Companies substantially revised a number of corporate law issues, which had previously been regulated by the amended Commercial Code from 1934.

Forms of foreign investments

Foreigners are generally allowed to conduct business activities in Poland.

Foreign entities bound by reciprocal agreements (e.g. EU Member States) with Poland enjoy all legal forms of business operations under the same principles as Polish entities. When, however, there is no reciprocity rule, foreign entities are allowed to conduct business only in one of the following forms: limited partnership, limited liability company, or joint stock company.

Establishing a corporation in Poland

Limited liability companies

  • The minimum value of share capital is PLN 50,000.
  • The entire share capital must be contributed before registration.
  • The minimum nominal value per share is PLN 50.
  • If the company's capital exceeds PLN 500,000 and the number of shareholders exceeds 25, the company is required to set up a supervisory board.

Joint stock companies

  • The minimum value of share capital is PLN 500,000.
  • At least 25% of the share capital needs to be contributed before registration.
  • The minimum nominal value per share is PLN 0,01.
  • The company should have a supervisory board.
  • Joint-stock companies are required to create reserve funds of at least 8% of their after-tax profits until such a reserve fund amounts to at least one third of the company's share capital.

As a matter of principle, companies (joint-stock companies and limited liability companies) have a distinct legal personality separate from that of their members. However, the members of the management board of limited liability and joint stock companies can be held liable for the company's tax obligations should it become insolvent. The members of the management board of a limited liability company are also jointly and severally liable for any obligations, unless a bankruptcy petition is filed.

In Poland, a company may be set up by one member or any number of members, and none of the shareholders, managers or other staff of the company are required by law to be Polish citizens (unless specific provisions provide otherwise). A limited liability company or a joint stock company may be founded by one or more shareholders. However, if the company is to have only one shareholder, there is a restriction that states that this sole shareholder may not be a limited liability company with only one shareholder.

The existing legal framework allows companies ample flexibility in drawing up their articles of association (limited liability companies) or statutes (joint-stock companies). Certain provisions of the Code of Commercial Partnerships and Companies are not mandatory and may be modified by shareholders in the company's incorporation documents.

The founding act of a company (Articles of Incorporation) must be drawn up in accordance with the requirements of the Polish Code of Commercial Partnerships and Companies, and needs to be translated into Polish by a recognized translator if not already drafted in that language. It must contain the company's Articles of Association and be signed in the form of a notarial deed before a notary public in Poland. This document, along with others, must then be submitted to the National Court Register in the district in which the company is to have its registered office. Depending on the particular district's backlog, the registration procedure may take anything from a few weeks to a few months. Divisions of the National Court Registers have been constituted in 20 Regional Courts.

The registration applications are filed as official registration application forms (e.g. applications concerning data disclosure) along with the required court fee and the fee for being publishing in an Official Journal.

In accordance with the provisions of the Business Activity Law it is possible for companies in organization to commence business activity prior to being entered in the business register. The companies in organization may, in accordance with the Polish Commercial Partnerships and Companies Code, acquire rights, including ownership of real property and other rights and obligations.

Once registered, the company must apply to the Main Statistical Office for a REGON number (the entity's statistical number). This number is unique to the company; it also identifies the company's business sector, as well as various other details.

The company must then set up its bank account(s) and register for an NIP number (identification number for tax purposes) at the tax office ('Urzad Skarbowy'), and then it may commence business. All businesses in Poland must be conducted in accordance with Polish laws and the date of commencement for tax purposes is the date of the first invoice.

Company management

Limited liability and joint stock companies are usually governed by management boards ('Zarzad').

Certain companies (all joint-stock companies and those limited liability companies that have more than 25 shareholders and a share capital that exceeds PLN 500,000) are required by law to appoint a Supervisory Board. The duties of this board are defined in the Code of Commercial Partnerships and Companies as 'to maintain consistent supervision over the company's activities'. The Code outlines certain specific duties for the Supervisory Board, including examination of the company's balance sheets, management board reports and the decisions of this board relating to the distribution of profits, which are later approved by the Meeting of Shareholders.

Under the Code of Commercial Partnerships and Companies, the General Shareholders Meeting has the authority to elect and dismiss members of the Management and Supervisory Boards. In the case of joint stock companies, certain matters are specifically delegated to the General Shareholders Meeting. These include, inter alia, approval of the company's balance sheet (also true for limited liability companies), any contracts for the purchase of real estate or plant and any changes in the Articles of Association.

The shareholders of joint stock and limited liability companies must hold their Annual General Meetings within six months of the end of the company's previous tax (financial) year. Extraordinary General Meetings can be called by the Management or Supervisory Boards or by shareholders representing at least 10% of the company's share capital. The notice period for general meetings is three weeks and is given in the form of an announcement in the newspaper specified in the company's statute for joint stock companies, and two weeks for limited liability companies, with notice given by registered mail. Resolutions can be passed by a simple, two-thirds or three- quarters majority depending on the type of resolution. There are 'quorum' requirements for some resolutions, and minutes of the meetings must be taken, otherwise any resulting resolutions become invalid.