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ESTABLISHING COMPANIES IN POLAND

Introduction
In Poland, both individual persons and groups of people – future share- or stock-holders - have the right to establish business activity in the most suitable form: individual enterprise,  partnership, limited liability company or joint-stock company.

In case of individual and partnership activities, they must be registered with Business Activity Central Registration Office (Centralna Ewidencja i Informacja o Działalności Gospodarczej). These entities have no legal person status.

Limited liability company and joint-stock company (which are legal persons) should be registered with the National Judicial Register (Krajowy Rejestr Sądowy).

Citizens of the Republic of Croatia, as those of other E.U. countries, are allowed to run business in Poland on the same terms and conditions as apply to citizens of the Republic of Poland.

A citizen of Europe Union who runs a registered business in Croatia may also run business in Poland through a branch (division) of their entity located in Croatia.

Below, the most popular ways of establishing business in Poland are presented:

I.  Individual business  activity
An individual person, who has not been deprived of his/her capacity to legal transactions (zdolność do czynności prawnych), is entitled to start and run business activity either by him/herself or by other people. To register business, no financial means are required.

In case of individual business which do not require a license or permit, most of  formalities can be executed by the Internet. To do it, go to the Internet site of the above mentioned Business Activity Central Registration Office (Polish abbreviation: CEIDG).

If no access to the Internet is available, one should go to a local administration office (Urząd Gminy, Urząd Miasta)  where he/she will get necessary information and assistance. After that, a visit at Revenue Office (Urząd Skarbowy) and National Insurance office (ZUS) is necessary.

Step 1. Deciding the type of business
Before registration, it is necessary to select a type of business – one of those enlisted at PKD system (Polska Klasyfikacja Działalności). There are no limits here (many entries can be selected), but it is a good practice to indicate those which will be run.

Later, the above selection can be amended easily, also by the Internet.

However, some types of business activities require a license or permit. More details are available at www.eu-go.gov.pl

Step 2. Application for entry into CEIDG register
In order to start own business, an application to the above-mentioned CEIDG register is necessary.

With the application form, the following documents should also be prepared: Declaration of no court judgements or other decisions of interdiction (prohibition) of business activity (giving false testimony is an offence in Poland). The application form serves also as a motion for registration by ZUS (Zakład Ubezpieczeń Społecznych - National Insurance), by  GUS (Główny Urząd Statystyczny - National Statistical Bureau) and a local Revenue Office (Urząd Skarbowy).

In the application form, a date of start of business must be inserted; no earlier than the date of application is allowed.

In order to simplify registration procedure and later activity, the NIP code (Tax-payer Identification Number) is also an identity number registered at the CEIDG bureau. If an applying  individual has no NIP code, a box entitled “Nie posiadam numeru NIP” (I have no NIP code) should be selected. The NIP code is required by all offices of the state (central) and local administration systems.

The application for entry into the CEIDG system may also be delivered in a paper form to any local administration  bureau (Urząd Gminy, Urząd Miasta) or be sent by a registered letter. If personally delivered, an identity card, passport or other such a document must be presented at the office. If mailed by post, the applicant's signature needs to be authenticated by a notary.

The registration at CEIDG is free (no fee must be paid).
As soon as the application is delivered to the office, business activity may be started.

Step 3.  Value Added Tax registration
In some cases (very small business), V.A.T. registration is not required. In other cases, it is obligatory. To do it, a businessman/woman must file a VAT-R form at a local Revenue Office (Urząd Skarbowy). It is possible to execute this procedure at filing an application  with the CEIDG office by those who are allowed to use an electronic signature.

Note: A single-person business activity means the owner is responsible for the business with all his/her property. In case of married persons with joint property status, the above responsibility will apply to a spouse as well.

II.  Limited liability company
Both natural (individual) persons and legal persons (as well as one or more individuals and one or more legal persons) have the right to establish a limited liability company.

Step 1.  Company agreement
In accordance with Commercial Companies Code (Kodeks spółek handlowych), company partners (or partner) of an intended limited liability company must first draw up and sign a company agreement (Umowa spółki) in the form of a notarial deed – to be executed (signed) in the presence of a notary.

In the agreement, the following information is required:
- company name,
- address of its seat (main office),
- type of activity,
- opening capital (not less than PLN 5,000.00),
- number of shares to be taken by shareholder(s),
- number and nominal value of shares taken by each shareholder,
- duration of the company if it is established for a specified time.

The company agreement must be subscribed by all founders (first shareholders) in the presence of a notary. The owner of an individual business firm may transform it into a limited liability company.

Step 2.  Company under organization procedure
As soon as the company agreement is executed (signed), the company is “a limited liability company under organization procedure”. Within 6 months from that date, it must be entered into the National Judicial Registration System (Krajowy Rejestr Sądowy, KRS). The said period is the time for organization of the company - collect an opening capital for example (which may be in kind or in money). If the company is not entered into the KRS register within the said 6-month time, it shall be terminated.

Step 3.  National Judicial Registration System (KRS)
The company board of directors is required to apply to KRS for entry of the company into register during a 6-month period from making the company agreeement.  It should be done by a KRS-WS form and deliverd to a competent registration court. Annexed must be forms: KRS-WE (list of shareholders), KRS-WM (type of activity), KRS-WK (individuals authorized to represent the company). In some cases, two additional forms must be annexed: KRS-WA (list of branches/divisions of the company) and KRS-WL (appointment of a signing clerk).

Apart from these forms, the following documents should be annexed:
- company agreement (notarial deed),
- statement made by all mambers of board of directors saying that all shares of the opening capital have been fully paid,
- list of shareholders (subscribed by all members of board of directors),
- samples of signatures of all members of board of directors (made either at court or before a notary),
- receipt of court fee and of a fee for publishing offcial announcement (by “Monitor Sądowy i  Gospodarczy”),
- the second copy of a company agreement and a document certifying the right of the
company to use its premises (the main office).

The court, during a company registration procedure, will register it with ZUS (National Insurance), US (Revenue Office) and GUS (Statistical Bureau).

Step 4. Further obligations before starting business activity
Either one of shareholders or a company representative is obliged to perform some other acts before the company starts business.

These are:
-  open a bank account(s)
-  register the company as a V.A.T. payer if its business does require it (at a local revenue office),
-  select a tax form and mode of tax paying and inform the Revenue Office of the decision.

Further, below listed additional data must be delivered to the Revenue Office within 21 days form the date of registration of the company with KRS: bank account numbers, special status of the company (if any), place of business activity, contact data. For this information, a form NIP-8 is used which is later sent by Revenue Office to the other interested bodies: ZUS (National Insurance) and GUS (Statistical Bureau).

According to Polish law, a company is allowed to start business as soon as the above mentioned actions are completed.

Note:  Shareholders are not financially responsible for the company's obligations except for their shares in the company's opening capital. However, members of board of directors and the company itself are responsible for company's affairs with the whole their properties.

Registration of a limited liability company by the Internet

In Poland, a limited liability company may be founded (and registered) by the Internet site of the Ministry of Justice: https://ems.ms.gov.pl . However, it is a smilpified way when compared with a traditional one because there are only a fewexample company documents with no possibility of their change to fit the needs of company founders.

In order to register a limited liability company by the Interent, each shareholder must open his/her account in the system and, after selecting the right version of  company documents, is required to sign it with his/her electronic signature. The company agreement adopted by the Internet need not be acknowledged by a notary, so it is cheaper.

The other condition of this way of registration of a company is that the opening capital must be in money only; no in-kind assets are allowed.

Since  a PESEL number (Personal Identity Code) is required to make application in the system, it is useless for foreigners !!!

III. Joint-stock company
Procedure of establishing a joint-stock company is almost the same as of the limited liability one. It may be formed by natural persons (individuals), legal persons and also by some natural and some legal persons as well.

Step 1.  Memorandum and Articles
Articles must be in the form of a notarial deed and must contain:
- name and seat (official address) of the company,
- subject of its activity,
- duration of the company (in case the company is being established for a specified period),
- amount of opening capital and a sum paid before registration of the company,
- nominal value of stocks, number (quantity) of stocks and their type (registered or bearer's),
- number of stocks of each type (if different types are planned) and linked rights,
- full names of founders of the company,
- number of members of board of directors and of supervisory board (or the smallest and the biggest number of members) and a body authorised to nominate memebrs of the said organs,
- types and number of rights of participation at the company's profit or assets,
- obligation to make performance (benefit) to the company (other than purchase of shares),
- terms and methods of redemption (annulment) of shares,
- restrictions of disposal of shares,
- individual rights given to shareholders,

A joint-stock company is formed as soon as all its shares are taken; from that moment it is called a joint-stock company under organization.

Step 2.  Opening capital
The opening capital of a joint-stock company must not be less than PLN 100,000.00 ; it consists of shares of equal value. The shares must be taken (and paid for) in the amount of not less than 1/4th of their nominal  value before the company is registered.  Shares taken as in-kind contribution need to be transferred to the company before the first anniversary of the company.

Step 3.  Organs (bodies) of a joint-stock company
Shareholders are required to appoint members of board of directors and of supervisory board as well as adopt rules of general meeting of the company.

Step 4. Registration of a joint-stock company
Board of Directors shall report the fact of forming the company to the National Judicial Register (Krajowy Rejestr Sądowy, KRS) at the district of the company's seat. A relevant form (Motion for registration, Wniosek  o wpis) must be subscribed by all members of the board of directors.

The  following data should be inserted in the motion form:
- name and seat (official address) of the company (or its mailing address),
- subject of its activity (form: KRS-WM),
- amount of opening capital, number and nominal value of shares,
- amount of target capital (in any),
- number of preference shares and type of preference,
- information on the amount of opening capital paid before registration,
- full names of members of board of directors and a mode of representing the company (form: KRS-WK),
- full names of members of supervisory board,
- information regarding in-kind assets of the company's opening capital,
- duration of the company (in case the company has been established for a specified period)
- name of periodical where the company's announcements will be published (same as in the Articles), - personal rights and privileges of shareholders or rights of participation in profits/assets of other (non-shareholders) persons (as in the Articles).

Annexed to the motion should be:
- Articles,
- Memorandum and notice of taking shares (both in the form of notarial deeds),
- statement of all members of board of directors saying that payments for shares as well as in-kind contribution were executed in accordance with law,
- receipt of payment relevant value of shares to a bank account of the company confirmed by a bank or broker,
- evidence of appointment of company's organs with names of their members,
- permit to approve or evidence of approval of Articles by a competent public office (if required).

Motion for register the company at the National Judicial Register (KRS) should be filed on a KRS-WK form (available from the Internet site of Ministry of Justice).

The company must be registered within 6-month period from the date of adoption of the Articles. Otherwise, all money and in-kind contribution must be returned to stockholders. If the company is unable to perform this obligation, Board of Dirfectors will liquidate it.

Step 5. Other actions required to start business
Additional information related to : bank account numbers, special status of the company (if any), planned number of employees, place of business activity and contact data should be delivered to relevant Revenue Office in 21 days time from the date of registration of the company at KRS; here a NIP-8 form is used. Later, Revenue Office shall mail it to National Insurance office (ZUS) and Statistical Bureau (GUS).

Note:  Shareholders are not financially responsible for the joint-stock company's obligations above their money or in-kind contribution in the company's opening capital. Responsible are the company's board of directors and the company itself (with all its assets).

IV.  A division of a Croatia-based enterprise
Every person who runs business in the Republic of Croatia may organize and open his/her branch in Poland. Its business activity must be the same as of the mother (Croatian) firm.

In such a case, a Croatian businessman/businesswoman is obliged to do:
- nominate a representative of the Polish branch,
- use an original (Croatian) name of the businees followed by its Polish translation and description: “Branch in Poland” (or Division, Section, Office, etc.),
- keep the books (accounting) in the Polish language and in line with Polish rules.

To start business by a division of a Croatian enterprise in Poland, the division must be registered with the National Judicial Register (KRS); to do so, a KRS-W10 form may be used. Enclosed should be the following forms: KRS-WK (details of individuals representing the business in Poland) and KRS-WM (subject of businees activity of the Polish branch). Further, by a KRS-WJ form, a full name and a Polish address of a person entitled to represent the owner (Croatian businessman/woman) should be delivered together with a sample of signature of that person certified by a notary. Annexed to the above documents must be founding and registration documents issued in Croatia (decision, agreement, articles or similar) followed by their certified translation to the Polish language.

In case the Croatian enterprise has been registered and is running business in Croatia in line with an entry into relevant register, a copy of the register entry and its translation to Polish must be delivered and annexed to registration file of the Polish branch.

After recently introduced amendment, a NIP (Tas-payer) code for a branch of a foreign entity will be graned automatically as soon as complementary data of a payer of National Insurance premium are published by CRP KEP.

Data registered at and available from the National Judicial Register (KRS) are the basic source of information of a foreign business branch in Poland. Additional data: bank account numbers, special status of the company (if any), planned number of employees, place of business activity and contact data should be delivered to relevant Revenue Office in 21 days time from the date of registration of the company at KRS; the form to be used here is NIP-8. Later, Revenue Office shall mail it to National Insurance office (ZUS) and Statistical Bureau (GUS).

The National Judicial Register (KRS) will automatically give a NIP (Tax-payer) code to the branch of a Croatian entity which starts business in Poland.

In case of electronic motion, the procedure is the same.

A Register Court (Sąd rejestrowy) will register the branch at the National Judicial Register (KRS) within 7 days from the date of reception of a fully and properly completed application.

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