Registration of the company via S24 or in the classic form?

The S24 ICT system allows shareholders to incorporate and register a company with the National Court Register using a template agreement. The S24 portal enables online filing with the National Court Register:

• an application for the establishment and registration of companies: limited liability company, general partnership, limited partnership, and simple joint-stock company.
• application for changes in already registered companies with regard to: change of the registered office and address, subject of activity (PKD codes), composition of the management board and supervisory board,
• financial statements of the company.

However, not every limited liability company, general partnership, limited partnership or simple S.A. can be registered in the KRS through the S24 portal – It all depends on the manner in which the company’s agreement was concluded. If it was concluded in a classic – written form, or in a notarial form, then the only way to register a company in the KRS is through the online Court Register Portal. Thus, only companies formed using the template contract in the S24 system can be registered through it. The same rule applies to making changes, comments legal adviser Kamil Nagrabski of Skarbiec Law Firm in Warsaw.

In the first instance, registration on the portal is required. Creating a user account involves entering identification data. In order to be able to successfully apply, entrepreneurs should prepare a set of documents required for a specific entry and then enter their content. However, the S24 system, which makes it possible to set up a company using a template, does not provide all the necessary documents. Additionally, the following documents should be prepared and attached to the system during the registration process:

• a declaration whether the company is a foreigner;
• a statement of consent of the person appointed to represent the company together with a statement of his/her address for service, if it is not him/her who signs the application;
• data of persons entitled to appoint the management board;
• a statement of the particulars, including an address for service, of the persons authorised to represent the company’
• if applicable, a statement of contributions.

For online registration, a qualified electronic signature or a trusted profile is required. However, all shareholders do not need to be in front of a single monitor screen during the incorporation or registration activity. Once one of them has started the registration procedure, he or she can use the 'share’ function to pass the interactive form for signature to the next partner, the next one, and so on until all the required signatures have been obtained.

S24 procedure

Establishing a company in the Ministry of Justice’s ICT system begins with the selection of the type of company to be established, after which the company’s name and registered office must be specified. You can then proceed to fill in the template agreement, in which you specify, for example:

• the subject of the company’s activity;
• the roles of the partners in the company
• the amount of contributions to be made;
• the arrangements for the distribution of profits and losses;
• the transferability of all the rights and obligations of a shareholder or of shares;
• the amount of share capital;
• the proportions in which shares are taken up;
• the manner of representation of the company.

Once the memorandum of association has been signed and the incorporation procedure completed, the final step is to submit an application for registration with the National Court Register, also on a ready-made form. To this application it is necessary to attach the signed articles of association of the company with the signed annexes. The information disclosed there will be pulled into the registration form.

A paid application (PLN 250 for an entry in the National Court Register and PLN 100 for the announcement of the first entry in the Monitor Sądowy i Gospodarczy) should be recognised by the registration court with jurisdiction over the company’s registered office, as the name of the portal suggests – within 24 hours. In practice, however, due to the occupancy of courts, registration may take two to three working days, and sometimes even two weeks.

The main advantage of S24 is the possibility to complete all formalities related to the incorporation and registration of the company online. This gives rise to another plus in the form of lower online registration costs. The traditional court fee for registering an entity is PLN 500, while via S24 only half of this amount is required. Also, as there is no requirement for notarial form, the registration costs will be reduced by the cost of a notary. Obtaining an entry in the National Court Register on the basis of an application submitted via the S24 portal should also take place within a shorter period of time than in the classic manner.

Another unquestionable advantage of establishing and registering a company via the S24 system is the possibility of using a ready-made template agreement. Representatives of three out of the four types of companies which can be incorporated via the S24 system point to the deformalisation of the process as one of its advantages. As standard, the Commercial Companies Code stipulates the need for a special form of a notarial deed for the conclusion of a limited liability company agreement, a simple joint-stock company agreement and a limited partnership agreement.

Rather, the S24 system is designed for 'low-complexity’ entities that do not require non-standard provisions to be introduced into the articles of association. This is because the articles of association are concluded on a form (contractual template) that is limited in its content. Thus, S24 does not provide an opportunity for shareholders to establish specific contractual clauses in the articles of association that are important to the shareholders. When establishing a company via S24, there is also no chance to cover the share capital with an in-kind contribution. This can only be done with a cash contribution.

It is also a disadvantage that it is not possible to apply for changes to the details of a company that has not been registered using the S24 portal, as well as for which any changes have been made in notarised form. These limitations do not only apply to financial statements. Another disadvantage of S24 compared to the classic form is that it is also not possible to set up a company in organisation in the system. And that is not all.

– REGON and NIP numbers will be assigned automatically within a few days of submitting an application for incorporation of a company in the S24 portal, but entrepreneurs who have just registered a company in the KRS must remember to submit a supplementary NIP-8 notification to the tax office within 21 days. If the entrepreneur intends to pay social security contributions, then the deadline is only 7 days.

Before making the first delivery of goods or services, the company should also register as a VAT taxpayer and remember to submit to the National Court Register a statement on the coverage of share capital, if such was not enclosed at the time of registration, within 7 days. On top of that, it is also necessary to calculate the amount of tax on civil law transactions and file a PCC-3 declaration within 14 days from the date of incorporation of the company, comments legal adviser Kamil Nagrabski of Kancelaria Prawna Skarbiec.

As you can see, there are a lot of formalities during and after the registration of the company in the S24 system. In order to complete them, it is advisable to seek the assistance of a lawyer. First of all, however, before starting to establish a company, it is worth considering whether, from the point of view of the nature of business, the template agreement prepared and made available by the Ministry of Justice in the form of a form that is very limited in its content will be sufficient to fully protect the interests of the company and the partners themselves.

To make matters worse, the system is not intuitive and user-unfriendly. Problems with its operation are encountered by lawyers, and even more so by entrepreneurs using it for the first time.

2022-04-26 Legal Adviser Kamil Nagrabski, Skarbiec Law Office