Company’s seat, shareholders’ meeting

With accordance to the Polish code on commercial companies, shareholders’ meetings take place at companies seat, provided otherwise is not stipulated in the Articles of Association. Please be advised that the meeting cannot take place outside Poland.

Provisions of law are clear that the company’s seat should be determined in the Articles of Association and is usually the seat of the Management Board (Art. (art. 157 § 1 pt 1 of the CCC and 41 of the Civil Code). Seat of a company should be regarded as a certain town rather than a premise.  As a result, company’s meetings can take place in different premises in the same town. For that reason an invitation for the meeting should determine the exact address under which a meeting shall be held.

Establishing a LLC

1. The first step of a multistage registration process of a Limited Liability Company is to prepare a draft document of Articles of Association. Under the Polish Commercial Code the compulsory elements of articles of association are: (a) business name and seat of the company, (b) objects of the company, (c) the amount of the share capital (at least PLN 5000), (d) the number and nominal value of the shares subscribed for by individual shareholders as well as information whether or not the shareholder may have more than one share, (e) the term of the company, if it is defined, (f) if an in-kind contribution is to be made as contribution to the company for the purpose of financing the share in whole or in part, the Articles of Association shall specify in detail that in-kind contribution and the shareholder who makes such an in-kind contribution, as well as the number and nominal value of the shares acquired for such contribution. We recommend, however, that the following clauses are also stipulated in the Articles of Association: (g) possibility of rising the share capital without amending the articles of association, (h) obligation to make additional contributions by the shareholders, (i) redemption of shares, (j) the advance on the expected dividends (application of g-j depends on stipulating the abovementioned provisions in the articles of association), (k) representation and (l) appointment of the Management Board. If a shareholder is to be granted special benefits or if the shareholders are to have obligations towards the company other than the obligation to make contributions towards the shares, these should be specified in detail in the articles of association, or else they shall be ineffective vis-a-vis the company. The supervisory board or the audit committee shall be created in companies whose share capital exceeds PLN 500,000 and where there are more than twenty-five shareholders – otherwise it is not obligatory. It should be stressed out that a Limited Liability Company may not be formed solely by another single-shareholder Limited Liability Company. We kindly offer our assistance in preparing a draft document of articles of association complying with the your conditions and requirements.

2. The Articles of Association shall be made in the form of a notarial deed. There are two possible ways of conducting this legal activity: (a) persons authorized to represent your company (or you) personally appear in notary public office in Poland (b) or they appoint a proxy in Poland (e.g. Polish attorney) authorizing him to form a Limited Liability Company in your capacity. The abovementioned Power-of-Attorney shall be made in the form of a notarial deed and may cover a final text of the Articles of Association. It should be afterwards translated into Polish by the sworn translator. Please be advised that regardless of selected procedure (a or b), a certified translation of an extract from the commercial register (if you represent a company) is always required. Furthermore, in order to register a Limited Liability Company in Poland, sample signatures of members of the Management Board and holders of the commercial power of attorney (if appointed) have to be obtained. Persons designated to become members of Management Board may set down a signature before your notary (instead of Polish), however, it has to be afterwards translated into Polish by the sworn translator. To all of the abovementioned documents apostilles should be affixed by the competent authorities. If your country is not part of the Hague Conference on Private International Law, documents will need to be legalised (more complicated procedure). Remember that a notarial deed drafted in your country has to meet Polish standards set up for all notarial deeds – e.g. pages need to be stamped by the notary public and should also be bound with each other.

3. Upon conclusion of the Articles of Association, a Limited Liability Company in organisation is formed. It may acquire rights in their own name, including the right of ownership of real estate and other rights in rem, incur obligations, sue and be sued. The company in organisation shall be represented by the Management Board or by an attorney in fact appointed by a unanimous resolution of the shareholders. In a single-shareholder company in organisation, the single shareholder shall not have the right to represent the company. This shall not apply to the filing for registration of the company with the registry court. If the formation of the company is not reported to the registry court within six months of the date of conclusion of the Articles of Association, the Articles of Association will be dissolved.

4. The following documents have to be gathered in order to file a registration motion to the National Court Register: (a) Articles of Association in duplicate; (b) the representation of all members of the Management Board that the contributions towards the share capital have been made by all shareholders in full; (c) a list of all shareholders signed by all members of the Management Board, including the surname and first name or the business name and the number and the nominal value of the shares of each shareholder; (d) sample signatures of members of the Management Board certified by a public notary (if certification was done before the e.g. German notary it should be translated into Polish by a sworn translator); (e) the surnames, first names and addresses of the members of the Management Board, (f) the filing of a single-shareholder Limited Liability Company with the registry court shall also include the business name, and the seat and the address of the single shareholder; (g) a document certifying company’s legal title to the property or office where it has it’s seat; (h) a motion to enter the company to the REGON system – RG-1 and RG-RD form; (i) an application to the tax office – NIP-2 form; (j) an application to the Polish Social Insurance Institution if the company plans  engages employees – ZUS ZPA form, if it does not – declaration that the employees are not be employed; (k) confirmation of payment of the court expenses (total of PLN 1500); (l) statement of clean criminal record concerning members of the Management Board. A motion for registration by the National Court Register should be submitted on the application form. It has to be signed by all members of the Management Board.

5. Upon registration in the register, the Limited Liability Company in organisation shall become a Limited Liability Company and shall acquire legal personality. Upon that moment, it shall become a party to the rights and obligations of the company in organisation.

It shall also be necessary to submit an additional application to the tax office concerning Value Added Tax – VAT-R form. Statutory provisions determine that the registration application should be filled with the Head of the tax office before the date of the performance of a first activity subject to VAT (Article 96 sec. 1 of Polish law on VAT).

6. Estimated time of establishing the Limited Liability Company (since concluding the articles of association until the entry to the register) is 2 – 4 weeks.

7. Due to the practical problems in conducting business activity in form of a Limited Liability Company in organisation, we suggest filing a motion for entry to the National Court Register as soon as possible. Prior to filing for registration, however, we  suggest setting up a bank account in order to make contributions on share capital (amounts exceeding EURO 15,000 have to be transferred via bank account).

That’s basically everything!

New associate

We would like to welcome Mr Mateusz Bąkowski – associate, who joined our legal team as of May 2012. At CGO Legal Counseling he is responsible for Spanish desk.

He is a specialist in civil and economic law in the field of day-to-day corporate and commercial legal services. He speaks English and Spanish.