Reduction of share capital in Polish Company (LLC)

Reduction of share capital in Polish limited liability company

One of the possibilities to allocate parts of the share capital for a purpose of performing current business actives is reduction of share capital of Polish Company. Benefits arising from share capital reduction are realized in particular when company’s assets are significantly increased and the share capital in the amount exceeding the statutory minimum threshold is no longer needed to secure company’s liabilities and obligations. However, due to the fact that the reduction of share capital is essential to company’s creditors, the law stipulates certain provisions in this matter.

Share capital of Polish Company shall always be reduced by way of amendment to the articles of association, and a resolution on the reduction of share capital must meet the following conditions:

• it shall be adopted at the Polish Shareholders’ Meeting with a majority of at least 2/3 of the votes
• it shall be recorded by a Notary of Poland
• it shall stipulate the amount by which the share capital is to be reduced
• it shall stipulate the method of the reduction (e.g. by redemption of shares or reduction of share value),
• it shall be attached to the application filed for the amendment of an entry in the Company Registry of Poland due to the fact that the amendments to the articles of association must be registered.

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