Limited liability company (spółka z ograniczoną odpowiedzialnością) in Polish law is one of the basic legal forms of companies in our country. It is made of one or several entities which are not held responsible for company’s liabilities. It is the z o.o. company which is responsible on its assets. In Poland there are almost 300 000 z o.o. companies.
|LEGAL FORM||Limited liability company – one of two capital companies existing in Polish law, established on the notary deed and registered in Krajowy Rejestr Sądowy (National Court Register).|
|ENGLISH TRANSLATION||Limited / Limited Liability Company.|
|BUSINESS ACTIVITY||Any that is legally accepted; necessity to obtain permissions or license is exceptional and applies only to given kinds of activities.|
|AUTHORITIES AND OTHER IMPORTANT POSITIONS/FUNCTIONS||owners||Shareholders’ meeting – consists of shareholders – legal or natural persons (possibility to fund a single-member company). Shareholders have control and supervisory competences.|
|management||Board – mandatory body in a company which has the authority to administer company’s affairs and represent it outside. It is appointed by shareholders’ meeting – can consist of one person or many people. The scope of competences stems from the Kodeks Spółek Handlowych (Commercial Companies Code), however it can be modified or specified by company’s agreement. Only natural persons can take positions in the company’s board.|
|supervision||Rada Nadzorcza (Supervisory Board)/Komisja Rewizyjna (Review Panel) – optional bodies which permanently supervise current company’s activity, composed of
at least 3 natural persons. Appointment takes place on the basis of shareholders’ resolution. One of the above mentioned bodies has to exist only if company’s share capital is more than 500 000 PLN, and there are more than 25 shareholders.
|other||Names of people from the Board as well as Supervisory Board / Review Panel are explicit and available in the KRS register. Shareholder’s name is revealed if he or
she possesses over 10% of shares (or is the only shareholder). Up-to-date company agreement as well as a list of shareholders shall be included in registration files. Registration Files are explicit.
|APPLICATON OF FIDUCIARY||nominal shareholder||Not present in Polish law, fiduciary secrecy not recognized by courts.|
|trust||Not regulated by Polish law, fiduciary secrecy not recognized by courts, but acceptable on the basis of agreement freedom.|
|MINIMAL SHARE CAPITAL||Minimal share capital equals to 5.000 PLN and is divided into equal or unequal shares of at least 50 PLN. It is necessary to fully cover the share capital (financial or non-financial contribution).|
|ACCOUNTING/AUDIT||Limited liability company keeps accounts, audit is required in circumstances specified by the law.|
|REGISTERED OFFICE||Company shall have its registered office on the territory of Poland.|
|TIME LIMITS||foundation||Company is founded when the agreement is signed in the form of notary deed. From this moment, it can act as z o.o. ‘in construction’. Once it has been registered in KRS, the company acquires legal personality. The registration process takes 2-4 weeks.|
|liquidation||Liquidation of a company requires shareholders’ resolution. Company appoints a liquidator who keeps company’s affairs instead of the Board. During the process of liquidation, the company shall satisfy all creditors and liquidate company’s assets. Liquidation requires opening and closing balance. Company’s liquidation is valid once it has been ruled out from KRS.|
|strike-off||Not present in Polish law.|
|BANK ACCOUNT||Any bank in Poland and other UE, EOG and OECD countries.|
|FINANCIAL YEAR||Financial year is generally calendar year, unless otherwise concluded in company’s agreement, however it always has to be 12 consecutive months. An exception is a company that starts its activity in the middle of calendar year which can cover in one financial statements the year of starting its activity and the following full calendar year.|
|TAX RESIDENCY||Residents: Company has Polish residency if its registered office or the Board is located on the territory of Poland.|
|INCOME TAX (CIT)||VAT rate: 19%
Residents – are subject to unrestricted tax liability
Non-residents – are subject to limited tax liability from income received from Polish sources.
Dividends and capital gains are subject to 19% VAT. Dividends obtained by a Polish
company from residents being capital companies from UE/EOG with proper
capital connection are free from taxation.
|SPECIAL FISCAL SYSTEM||z o.o. companies and joint stock companies which are Polish tax residents can fund a tax capital group. This group is a tax payer. The basis for taxation is income from all companies of the group, so the income of a prosperous company will be lowered by losses of other companies. In reality, the tax capital group does not exist.|
|WITHHOLDING TAX (WHT)||Dividends: 19%,
Royalty payments: 20%
The above rates may be lowered to the level specified in the act on avoiding double taxation or EU regulations.
|RULES ON COMBATTING VAT EVASION||Transfer prices: YES
Thin capitalization: YES
CFC: Planned date of entry into force January 2015
Attention! There is a blacklist of countries which use harmful tax competition.
* Data current as of April 28, 2014