- Business in Poland -

Limited liability company

Why is the polish LLC the most popular legal form for business?

A limited liability company (abbreviated as LLC) is the most commonly chosen legal form for conducting business activity in Poland, as confirmed by commercial practice. Its popularity stems primarily from its relatively low level of formal requirements compared to a joint-stock company, both at the incorporation stage and in terms of ongoing operations. Additionally, the relatively low minimum share capital requirement eliminates a significant financial barrier to entry. The LLC also offers considerable structural flexibility, allowing shareholders to freely shape internal relations and the company’s organizational framework.

How to establish an LLC in Poland: traditional vs. simplified procedure

An LLC may be established in one of two ways: through the traditional (standard) method or the simplified (accelerated) method. In the traditional procedure, the company’s articles of association must be executed in the form of a notarial deed, followed by submission of a formal application for registration in the National Court Register (KRS). In the simplified procedure, a standard template agreement available via an online system is used, and the entire process involves completing electronic forms and submitting them to the KRS.

What is an LLC in organization and when does it gain legal personality?

Entering into the articles of association results in the formation of an LLC in organization – a transitional legal entity that transforms into a fully incorporated limited liability company upon registration with the KRS. This provisional company has legal capacity, operates under the name with the suffix "in organization," and is represented by its management board or by a proxy appointed by a resolution of the shareholders. Liability for obligations incurred during this period is borne jointly and severally by the company itself, the individuals acting on its behalf, and the shareholders, up to the amount of capital they have committed.

Share capital contributions in a Polish LLC: rules and requirements

Shareholders are required to contribute capital in exchange for the shares they acquire in the company’s share capital. These contributions form part of the company’s assets and finance its operations. In the traditional mode, both cash and non-cash contributions are allowed (excluding inalienable rights or contributions of work or services). Contributions must be made prior to the company’s registration. Under the electronic procedure, only cash contributions are permitted, and these must be paid within seven days of registration.

When does a Polish LLC obtain legal personality?

The company comes into legal existence (has legal personality) once it is entered in the National Court Register — this registration has constitutive effect.

What is the minimum share capital for a Polish LLC?

The minimum share capital of an LLC is PLN 5,000. It is divided into shares of equal or unequal nominal value, though no single share may have a nominal value lower than PLN 50. The total nominal value of all shares must equal the registered share capital. If the shares have unequal values, each shareholder may hold only one share. A share grants specific rights and obligations to the shareholder.

Corporate bodies of a Polish LLC: roles and responsibilities

An LLC is a legal person that acts through its corporate bodies, which include:

• the Management Board
• the Supervisory Board or Audit Committee (if applicable)
• the Shareholders’ Meeting

The role and powers of the management board in a Polish LLC

The Management Board is the primary executive body of the company and is responsible for both the internal affairs (day-to-day management) and external representation of the company. Acts of the management board are considered acts of the company itself. The board may consist of one or more members and is appointed (and dismissed) by resolution of the shareholders, unless otherwise specified in the articles. Appointment is typically for a term defined in full financial years, either individually or collectively.

How shareholders exercise control over a Polish LLC

By default, shareholders exercise control over the company directly — they have the right to inspect the company’s books and records, prepare financial summaries for their own use, and request explanations from the management board. However, the articles may provide for the establishment of a Supervisory Board, an Audit Committee, or both. Under the Polish Commercial Companies Code, the creation of such bodies is mandatory when the share capital exceeds PLN 500,000 and there are more than 25 shareholders.

Supervisory board in a Polish LLC: structure and functions

The Supervisory Board is a collective body composed of at least three members. Unless the articles provide otherwise, each member may independently perform supervisory functions. Decisions within the board are typically made by absolute majority. The shareholders appoint and remove board members by resolution, regardless of how they were initially appointed. The Supervisory Board exercises continuous oversight of all areas of the company’s operations, including the activities of the management board, but it may not issue binding instructions to management. Its specific duties include reviewing the annual financial statements, verifying the proposed distribution of profits or coverage of losses, and reporting its findings to the shareholders.

What does the audit committee do in a Polish LLC?

The Audit Committee has a more limited role, focused solely on evaluating the company’s annual financial reports. It does not supervise day-to-day operations unless the Supervisory Board has not been established and its responsibilities are extended under the articles.

What is the shareholders’ meeting and what are its powers?

The Shareholders' Meeting represents the company’s economic owners. Shareholders adopt resolutions on major matters affecting the company. The scope of issues requiring a resolution is determined by law and the articles of association. These typically include approval of annual management and financial reports, and granting discharge to board members for the performance of their duties. Meetings may be ordinary or extraordinary, with differences in terms of who convenes them, the agenda, and timing.