Company formation in Poland
Pursuant to Article 6 Section 1 of the Law on Freedom of Business Activity, undertaking, conducting and terminating a business activity in Poland is free for anyone, with equal rights, and subject to terms and conditions set forth in the provisions of law. A foreign entrepreneur may perform its economic activity in Poland, inter alia, in the form of: a joint stock company, a limited liability company.
The Polish limited liability company (spółka z ograniczoną odpowiedzialnością) is the most common business form in Poland. This business structure has several advantages, including the fact that the investor is protected in case the business fails. This limited liability feature, combined with accessible incorporation and maintenance costs are two of the most important characteristics.Requirements for a Polish LLC
The limited liability company in Poland (abbreviated sp. z.o.o.) must have at least one shareholder and the contributions to the capital can be made in cash or in kind. One restriction is in place regarding the formation of the Polish limited liability company (LLC): one company with a single shareholder cannot incorporate another company with a sole shareholder. The minimum capital contribution is PLN 5,000.
The shareholders are only liable to the extent of their investment in the company. The LLC needs to be registered with the Polish Company Register, apply for a tax identification number (NIP) and also for a statistical number (the REGON number). The company will also need to be registered for VAT purposes.
Establishment of LLC in Poland
Several steps are needed for the incorporation of the company:
- execution of the Company’s Articles of Association in the form of a notarial deed,
- contribution of the entire share capital before registration,
- appointment of the company bodies,
- registration in the company register.
Once the limited liability company is registered in the commercial register it becomes a legal entity, having a full legal personality. On the other hand, even before filing for registration the Company may operate for up to six months as a so-called “company in organization”, with the capacity to make valid contracts, though in practice its activity can be impeded.
Other formal requirements
for LLC operation
Additionally, to start operation the company in organisation shall conclude a lease contract of the business premises, open a bank account, if required by the law notify relevant labour and sanitary Inspectors about the commencement of the company's operation, register the Company's employees with the relevant ZUS (social security agency) department. In practice, setting up business activity in Poland by a foreigner usually does not entail major problems and takes up to a few weeks.
Usually, this does not trigger any significant administrative fees to be paid. Nonetheless, such registration without assistance of a Polish lawyer could be difficult since the registration procedure is highly formalised. Pursuant to Article 19 Sections 2-3 of the Law of August 1997 on Polish Business Register, an application for entry in the register is filed in an official form. The registration procedure is conducted in Polish only. Documents in foreign languages may be submitted in the form of certified translations, with apostille, if needed.
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