Limited liability companies are the most popular type of commercial companies in Poland. What are its characteristics and how to set up your own company?
What is a limited liability company?
According to the definition, a limited liability company is a capital commercial company with legal personality. What does this mean in practice?
To put it simply, it is a form of business in which the partners are not liable for the company’s obligations with their own assets. The exception to this, however, is when they are board members. The only risk for the founder of LLC is his own contribution.
Limited liability company may be established for any legally permissible purpose by one or more partners, however, it may not be established solely by another one-person limited liability company. Its founder can be anyone regardless of their place of residence or citizenship. The only requirement is to bring in a minimum capital of PLN 5,000. PLN.
Registering a company is as simple as its operating principles. This can be done in the traditional way by means of a notarial deed or in electronic form on the S24 platform.
The process of establishing a limited liability company
The process of establishing a company is divided into four stages:
- Conclusion of the articles of association
In the case of traditional establishment of a company in a stationary manner, this process requires a visit to a notary who will create a unique notarial deed for the price of 500 PLN, tailored to the needs of a given project.
You can also set up a company using a ready-made contract template in the S24 system, which is available at this address: https://ekrs.ms.gov.pl/s24/
The second model is definitely faster and, unlike the traditional process, it takes only 30 to 90 minutes, thanks to which it will save you visits to the notary public, and thus the expense, which drops from 500 PLN to the obligatory fee of 250 PLN.
A correctly prepared contract should contain, among others: the name and registered office of the company (in other words, the registration address), the subject of activity or the amount of the share capital.
- Contribution to cover the share capital
The next step is for the shareholders to make a cash contribution. Please note that it cannot be lower than 5,000. PLN, and its nominal value may not be lower than 50 PLN.The capital may be covered either in the form of cash contributions and non-monetary. The principle that is also worth remembering is that in the process of establishing a company, first the amounts of contributions that the partners undertake to make to cover the shares are determined, and then on their basis the amount of the share capital is determined as the sum of the nominal value of the shares.
- Appointment of the management board and appointment of the supervisory board or audit committee
After the capital has been contributed, the shareholders elect a management board consisting of at least one member. It is worth mentioning that partners may also appoint themselves as members of the management board, but in such a case their liability towards the company will change.
As shareholders, the partners are responsible only for the capital they have contributed. The company and the management board are responsible for the liabilities with all its assets.
- Company entry in the National Court Register
The last and most important step that formally gives the company its subjectivity. Registration of a limited liability company in the National Court Register, you can do it both physically and online, but both methods require prior and thorough preparation of documents, and sometimes, unfortunately, they can also cause difficulties during this process.
The most common mistakes when registering with the National Court Register include, for example, the name of a company that is already in the register or the lack of a registered office.
For people who have difficulties with the lack of a registered address, we recommend the rental service of the prestigious Solny Square 15 address in the center of Wrocław, commonly referred to as a virtual office, which has specialized for a decade by providing a flexible form of remote support for entrepreneurs.
Is it worth establishing a limited liability company?
If your business fits well with its specifics, then yes! There is a reason why it is the most frequently chosen form of activity in Poland.
It is the safest and most profitable option for businesses with financial risk, but also for those who simply want to have a “safe door” in the form of no loss in the event of termination of operations. In addition, the limited liability company also relieves its partners from paying ZUS contributions, which are a frequent nuisance for novice entrepreneurs and gives you full control over your business.
Do these features and specificity meet your needs?
The process of establishing a limited liability company is not complicated, especially in the era of the Internet and the possibility of starting a business without leaving your home. Nevertheless, we recommend that you contact a lawyer or accountant during this process, who will help streamline the process and even better explore the topic, because each case should be considered individually. This short guide we presented today is basic knowledge and just the tip of the iceberg of limited liability companies!