Accounting

Share capital in LLC in Poland

Accounting


Share capital in the Limited Liability Company in Poland

The shareholders have obligations towards the Polish company to make cash and non-cash contributions, that is contributions in-kind; however, services and non-transferable rights cannot be the object of a contribution. Prior to registration of the Polish company, the shareholders shall make specific cash contributions towards the share capital and make a guarantee to the company - as a legal person - to dispose of the rights to in-kind contributions. A separate investment fund is created this way, which allows the Polish company to conduct business activity. At the time of the creation of the limited liability company in Poland, the size of the share capital and the size of the company's assets are generally equal.

The nominal value of a share of Polish company cannot be lower than 50 zlotys. As the legislator did not indicate the maximum value of the share capital of the company, the shareholders may freely set the value of the share capital.

Payments towards company's share capital

Contributions towards the share capital shall be made by all shareholders. Share acquisition in Poland must be performed prior to registration of the company with the Company Registry in Poland. Confirmation of payment towards the share capital presented in court shall be a representation of the company's management board that contributions to the increased share capital have been made in full, which is an obligatory annex to the filed application to enter the Company Registry in Poland.

In case of cash contributions, there are two modes of payment towards the company's share capital:

  • Non-monetary contributions - transfer to the company's bank account
  • Monetary contributions - transfer of ownership of monetary tokens to the company

Cash contribution can only be expressed in Polish zlotys

In contrast, non-cash contribution, must always be rights, e.g. property rights, obligation rights or incorporeal property rights (intellectual property rights). Art.14 of the Polish Company Law Act lists what may not constitute a contribution - these are inalienable rights such as usufruct or personal servitude and the provision of work or services. Transferability of rights is a necessary prerequisite enabling recognition of a non-cash contribution as an in-kind contribution. Transferable to the company rights are subject to valuation and the amount of shares subject to exchange for specific rights is determined by the amount of valuation.

Share capital of the Polish LLC company is inviolable. In case of the infringement of the share capital of the company, the law provides for the obligation to compensate the missing value and prohibits taking action to deplete it.

However, the moneys and the rights subject to contribution towards the share capital shall not necessarily need to be retained in the company and may serve to conduct the business activity by the company. One of the possibilities is to surrogate the components of the contribution. In particular it is possible to:

  • Surrogate the moneys subject to contribution with the components in-kind or rights
  • Surrogate the components in-kind or rights with the moneys
  • Surrogate the components in-kind or rights with other components in-kind or other rights 

 

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