Company registration in Poland

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General overview

The process of company registration in Poland should start with the selection of the most appropriate legal form, and with signing the articles of association or the deed of formation. The fees vary depending on the selected forms of activity.
 
Establishing an individual enterprise (an enterprise run by a natural person) or a general partnership is the least expensive. The costs of registration of the business in such a case are not significant. In the case of partnerships (general partnerships, limited partnerships, professional partnerships and partnerships limited by shares), the administrative cost of registration is PLN 600.
 
For corporate entities, the initial cost of registration is the same as for partnerships, but both require an initial capital. In the case of an sp. z o.o.,the required minimum share capital is PLN 5 000, while for an S.A. it is PLN 100 000.

How to register a company in Poland

The registration of an limited liability company (sp. z o.o.) or a joint-stock company (S.A.) in Poland is conducted in front of a Polish notary and the articles of association must be notarised. After the registration application is filed, the company as a legal organisation is considered to be established. The company ‘undergoing organisation’ may, in its own name, acquire rights including ownership of immovable property and other rights, incur obligations, sue, and be sued.
 
The company must also choose its business address. In the registration process, the address is confirmed by the lease agreement or the title to ownership of premises.
 
The initial share capital of the company must be fully paid in the case of an sp. z o.o. and at least up to 25% in the case of an  S.A.
 
Every company wishing to register a company in Poland must open a bank account and inform the tax authorities of this fact. The list of required documents depends on the individual requirements of the bank (e.g. articles of association/statutes, and the specimen signatures of those authorised to represent the company). It is also possible to open an account for a company undergoing organisation.
 
The next step is to submit an application to the National Court Register. When submitting the application to the National Court Register it is also necessary to submit an application for a ‘REGON’ identification number (a statistical number issued by the Office of Statistics), an application to receive a Tax Identification Number (NIP), as well as an application to a social security fund (Zakład Ubezpieczeń Społecznych) where the company plans to hire employees immediately.
 
In order to register a company, the executive board must file an application to enter the company in the National Court Register (Krajowy Rejestr Sądowy) within six months of executing the articles of association or the statutes, otherwise the company is deemed to be dissolved.
 

Company administration

The most standard and popular company form is a limited liability company (sp. z o.o.).  
The organization body of sp. z o.o. are:

  • The shareholders’ meeting;
  • The supervisory board;
  • The management (executive) board;
The existence of a shareholders’ meeting and of an executive board are mandatory in both types of company. A supervisory board is only mandatory for if there is more than 25 shareholders.
 
In any company, the shareholders’ meeting is generally the ultimate decision-making body. There may be ordinary and extraordinary meetings of shareholders. The executive board convenes an ordinary annual shareholders’ meeting, which should be held within six months of the end of the company’s financial year, in order to deal with the following matters:
 
  • Approving the annual financial statements of the company
  • Approving the executive board’s report on the company’s activities
  • Acknowledging the performance of duties by members of the company’s corporate bodies
  • Adopting a resolution on the distribution of profit or coverage of loss (always for an S.A.; also for an sp. z o.o. unless the articles of association provide otherwise)
 
The shareholders’ meeting is in particular responsible for the following matters:
 
  • Amending the articles of association or statutes
  • Adopting a resolution about making and repaying additional payments (sp. z o.o.)
  • The transfer or lease of a business or of an organised part of a business
  • Deciding on a merger, division or reorganisation of the company
  • Increasing or reducing the share capital
  • Deciding on the dissolution of the company

An executive board consists of one or more members. As a rule, executive-board members are appointed and dismissed by a resolution of the shareholders’ meeting (in an sp. z o.o.). However, this rule can be modified and alternative methods of appointing and dismissing members may be provided for in the articles of association or the statute.
 
The executive board is in charge of the day-to-day management and representation of the company. The powers of the executive board are similar in both types of companies, except that in the case of an sp. z o.o., any individual member may conduct matters within the ordinary course of business (unless the provisions of the articles of association provide otherwise). The shareholders are not personally liable for the obligations of the company above the level of their share value. However, legal regulations providing for executive-board members’ civil, tax and criminal liability will also apply to any shareholder who is also an executive-board  member. 

Accounting regulations in Poland​

Limited liability company is required to maintain full accounting records in compliance with Polish law. The accounting records must be kept in the Polish language and in Polish currency. Computer software must be ready for producing reports and ledger printouts with headers and descriptions in Polish. The accounting records must be maintained either in the registered office of the company or branch or with an authorised accounting firm.

The Polish tax and especially VAT legislation imposes very strict rules as to the content of invoices. Corporation tax and personal income tax regulations are slightly less demanding; however, the burden is on the taxpayer to prove to the authorities that there is sufficient documentary proof of a transaction. In particular, the tax authorities are very keen on documentary proof of acceptance of transactions by the relevant officials of the company. This in turn means that there should in practice be written resolutions of shareholders and the management board (and of the supervisory board if there is one) concerning authorisation limits and approval procedures. In the case of documents in electronic format, internal control procedures should be put in place in order to ensure the authenticity, integrity and legibility of such documents and to prove their link with the transaction and accounting records.

The legislation requires that full accounting records be maintained on a current basis. Because all taxes are reported monthly (including corporate income tax, although small entities may elect for a quarterly basis) in practice this means that full books of account must be kept up to date.
 
As in all jurisdictions, there is a growing discrepancy between the accounting and tax treatment of various transactions. This means that additional records have to be maintained to track the tax treatment of various positions. The accounting legislation now requires full accounting for deferred income tax, although exemptions exist for smaller companies. Particular requirements apply to the format of VAT registers and reports. Many foreign accounting software packages are unable to comply fully with the VAT legislation and specific Polish add-ons are necessary.
Usually the accounting year is the calendar year, but it is possible to choose any other closure date. The first accounting period cannot exceed 18 months. It is possible to change the year-end but only in respect of an accounting period that has not yet commenced. Special procedures apply in such a case.

Audit requirement

As well as entities preparing financial statements in accordance with IFRS, all other entities that exceeded two of three limits in the previous accounting period are subject to statutory audit of the current year’s financial statements. The limits are:
 
  • Turnover – EUR 5 million
  • Balance-sheet assets – EUR  2.5 million
  • Employees – 50 employees.
If you are thinking of company registration in Poland please contact us. We will provide you with all the information you need and help procced with the entire process of registration as well as with meeting all the requirements related to the bookkeeping, tax requirements and the audit.