Discover the World of LLCs in Poland : Part 1 Unveils Setup Secrets, Part 2 Reveals Board Member Duties!
A limited liability company, commonly referred to as an LLC, is a private enterprise in Poland that grants its owners limited liability protection, similar to that offered by a corporation. Just like a corporation, an LLC is responsible for its debts, safeguarding its owners from personal liability. The minimum share capital for an LLC is PLN 5,000 (approximately EUR 1,150).
Among the available legal forms for businesses in Poland, a limited liability company stands out as the most prevalent. Unlike personal companies such as general partnerships, partnerships, limited partnerships, and limited joint-stock partnerships, an LLC is classified as a capital company, providing it with legal personhood. This distinction allows the company to assume liabilities in its own name, absolving partners from personal asset responsibility. This structure significantly benefits investors, limiting their financial risk solely to their initial contributions.
However, there are exceptions to this limited liability. If a bankruptcy petition isn’t filed in due time and enforcement against the company’s assets is unsuccessful, members of the management board may be held responsible for the company’s obligations to a certain extent.
In contrast to a joint-stock company, an LLC has a less complex legal structure, making its establishment and operation comparatively simpler. Additionally, the significantly lower required share capital—PLN 5,000 (approximately EUR 1,150) for an LLC compared to at least PLN 100,000 (approximately EUR 21,750) for a joint-stock company—greatly influences entrepreneurs in choosing the LLC structure over a joint-stock company.
An LLC can be established traditionally through a notary or online via the S24 portal. Notably, a single person can establish an LLC, but it cannot be formed solely by another single-member limited liability company. The formation of an LLC involves drafting articles of association that must outline specific details such as the company’s name, registered office, business purpose, share capital, allowance for multiple shares for one owner, and the company’s duration (if specified). The articles of association need to be formalized in a notarial deed, and the company’s name must include “limited liability company” or an abbreviation thereof.
According to Article 157 of the Commercial Companies Code, the Articles of Association of an LLC should explicitly state:
- The company’s name and registered office.
- The company’s business activities.
- The amount of the share capital.
- Whether a shareholder may hold multiple shares.
- The number and nominal value of shares held by each partner.
- The company’s defined duration, if applicable.
Besides the articles of association, an LLC must appoint a board of directors and be registered in the commercial register. In a single-member company, the sole shareholder holds all powers typically vested in the shareholders’ assembly.
In summary, a limited liability company (LLC) in Poland is a popular business structure that offers owners limited liability protection, akin to a corporation. It requires a minimum share capital of PLN 5,000 and is favored for its simplicity compared to joint-stock companies. LLCs have legal personhood, enabling them to incur debts in their own name and relieving partners of personal liability. However, specific circumstances might hold management board members accountable. Formation can occur traditionally through a notary or online, and the Polish Commercial Companies Code delineates specific regulations concerning the information included in the articles of association.
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