Milewska Legal

Legal status of a Limited Liability Company (LLC) in Poland

15 November 2022

The Polish Limited Liability Company (in Polish: spółka z ograniczoną odpowiedzialnością; sp. z o.o.) is the most common form of establishing a company in Poland. The LLC is frequently chosen by small entrepreneurs as well as by large international groups, both Polish and foreigners.

Limited Liability Company starts its existence upon its registration in the National Court Register (Krajowy Rejestr Sądowy – KRS), thus acquiring legal personality. The LLC may be established by one or more natural or legal persons, Polish or foreign ones.

Establishing of a Limited Liability Company

In order to establish a Limited Liability Company, a great number of formalities must be completed. These include drafting the Articles of Association, making contributions to the share capital of the company of which the minimum legal amount is PLN 5,000, and submitting the registration request in the National Court Register. The whole procedure can take from 2 to 8 weeks.

There is also a possibility of an alternative method of incorporation of a LLC that can be accomplished through the remote computer system (S24). In this case, it is not necessary to draft the Articles of Association in a notarial deed and the company is registered in the National Court Register within 2-3 days. However, the Articles of Association of a Limited Liability Company established by using the S24 system are not very complex and can only contain basic stipulations.

Shareholders of a Limited Liability Company 

The shareholders are the people/entities that have signed the Articles of Association of a LLC.

The LLC can be established by one or more natural or legal persons, regardless their nationality and place of residence. However, the LLC cannot be formed by another sole-shareholder LLC.

The collective decisions of a LLC are made by the Shareholders’ Meeting, which is the corporate body of a LLC. However, the shareholders’ meeting does not intervene in the day-to-day management of the companý, nor in its representation towards third parties.

Management of a Limited Liability Company 

The management of a Limited Liability Company is entrusted to the Management Board, which conducts the business of the Limited Liability Company and represents it in all (judicial or extra-judicial) proceedings. The shareholders’ meeting determines how the company is represented – the LLC can be represented by each member of the Management Board individually or, for example, by two members acting jointly.

The Management Board consists of one or more natural persons, Polish or foreign.

The members of the Management Board may be appointed from among the shareholders or beyond them.

The duration of the term of office of the members of the Management Board may be limited or unlimited.

Commercial power of attorney

The commercial power of attorney (prokura) is a mechanism frequently used by Polish LLCs when its management is actually residing abroad.

The commercial proxy (prokurent) is a natural person, Polish or foreign, appointed by all members of the Management Board of a Limited Liability Company. The commercial proxy is authorized to represent the company and manage its affairs in relation to its business activities.

The commercial power of attorney must be granted in writing.

The commercial power of attorney is revocable by each member of the Management Board.

Tax system of a limited liability company

The LLC in Poland is subject to Corporate Income Tax (CIT) amounting to 19% (a general rate) or 9% (a preferential rate for “small” taxpayers).

In addition, dividends paid to shareholders are subject to income tax at 19%.

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