We describe below how to establish a private limited company in Poland (sp z o.o). Private limited companies are one of the types of companies available in Poland. For more information about the other types of companies and choosing the right corporate structure please read: Choosing the Right Business Structure in Poland
Here are 11 steps to take:
1) Determine what is the name of your future Polish company, its share capital, a way of financing, the seat of the company and who is going to be on the board
This is the first step most organizations will need to take. It will help you to plan the whole process and avoid making mistakes. There are two types of finance available to a private company: (a) equity whereby shareholders invest funds in return for shares and (b) debt whereby the company takes a loan either from a bank or from the parent company. A debt solution is preferable to companies for tax reasons but each situation should be analysed individually.
To make a plan of action you should contact experts in Poland who will explain to you the corporate and tax aspects of the investment, taking into account cross-border issues.
2) Prepare the incorporation documents in compliance with Polish law
To register a Polish private limited company, a foundation document is needed as well as a set of Articles of Association. Preparing the documents in compliance with Polish law is essential.
One of the details the prospective shareholders should pay extra attention to, is the composition to the board of directors and the way the company is going to be represented. Under Polish law, the Articles of Association should specify who appoints and dismisses the directors and how many signatures are required for a valid representation of the company.
The share capital of at least PLN 5,000 is required to establish a Polish private limited company.
3) Determine the composition of the board of directors
You should decide who will be on the board of directors. Although a company is treated as a distinct legal entity, Polish law imposes personal liability on the directors of a company if the company is not able to pay its debts. This aspect should be discussed with the prospective directors.
4) Appoint a Polish attorney to represent you in the process in Poland, including a visit to the notary public to sign the incorporation documents
The easiest way forward is to appoint a Polish attorney who can sign the incorporation documents in front of the notary public in Poland. The power of attorney to your Polish attorney should be made in a form of the notarial deed and it should be apostilled as to its conformity with the local law.
5) Open the bank account in Poland and obtain a proof of paid share capital
Polish register authorities need declaration from the board of directors that the company has a share capital of at least PLN 5,000. Although, Polish law allows for companies to be established by using other assets than money as the share capital, using money as the share capital is the easiest way to meet the share capital requirement in many cases.
To pay in the share capital the company needs to open the bank account in Poland. Opening of the bank account needs to be planned in advance. Most banks require physical presence of directors, so a quick visit to Poland is typically required.
6) Sign the lease for the office
Polish register authorities need the company’s address so the company should identify and sign the lease agreement for the office it is going to use. This will be the official address of the company where all correspondence will be directed. There is also a possibility to find a virtual office.
7) Complete the registration documents
Registering a private limited company requires a coordinated register notification. It is important to complete the document correctly to avoid Polish authorities refusing to register the company. The board of directors needs to sign a number of declarations and the list of shareholders.
Foreign directors who do not have a Polish personal identification number should apply for a PESEL number, which is required to obtain a trusted profile allowing electronic signing of applications and requests submitted to public entities (ePUAP), as currently many obligations related to running a company can only be met digitally (e.g. registration into the Central Register of Beneficial Owners, submission of annual financial statements). An alternative solution is to purchase a certified electronic signature for the directors.
8) Appoint an accountant
Appointing an accountant or hiring the external firm of accountants is a very important point. There are many accounting requirements which needs to be met. The accountants should also be in charge of registering the company with the tax office and obtaining the VAT number.
9) Send the documents to the Polish register authorities
The final step in the process of registering the company, is to send all the documents to the Polish register authorities. The process may take up to 2 or 3 weeks.
Any mistakes in the documents may result in Polish authorities returning the documents to the sender without registering the company. Once the mistakes have been corrected, the documents can be sent back to Polish authorities to have them process the registration anew.
10) After registration in the KRS register
Once successfully registered, the company will receive an organisation number in the KRS register. The company should also be registered with the tax office and has its VAT number.
11) Disclosure obligations
Once the company is registered, the directors will have to establish “persons with significant control” over the company who will be treated as the beneficial owners of the company. The board of directors will have to make the appropriate filing with the Central Register of Beneficial Owners.
Establishing a private limited company in Poland is not a difficult task, however it has to be a well thought -out and planned process to avoid the potential risks.