A limited company (sp. z o.o.) can be formed by one or more shareholders, and its formation is governed by the articles of association. This way the shareholders clearly define their contribution to the company and the functions and tasks they are responsible for. The process of setting up a limited company can be divided into four main stages. See how to set up a limited company step by step.
Forming and registering a company in 4 steps
The process of registering a limited company can be divided into four main stages. These are:
- Concluding the articles of association.
- Making contributions by the shareholders and covering the share capital.
- Appointing the management board, supervisory board and audit committee.
- Making an entry in the KRS register.
The first step is to conclude the articles of association and make contributions to cover the share capital. The minimum share capital is PLN 5,000. The shareholders then appoint the management board and establish the supervisory board and audit committee, if the articles of association require them. Next, an entry must be made in the KRS register of entrepreneurs. A limited company is registered electronically via the S24 portal or the Court Registers Portal.
Within 7 days of starting business, the company should provide data to ZUS (e.g. the number of employees), and within 21 days submit data to GUS and the tax office. The NIP and REGON numbers for entrepreneurs are assigned automatically when the company is registered in the KRS. The shareholders therefore do not have to submit additional applications for a NIP.
The articles of association should contain information on, among other things, the company's registered office and business activity, the amount of share capital and the shares held by each shareholder. The nominal value of a share may not be less than PLN 50. The founders should also remember to pay the mandatory company registration fees. Without them, the application to register the company will not be considered.
The company's assets and governing bodies
What else should you remember when setting up a limited company? Once the main official formalities have been completed, matters related to the company's assets, its governing bodies and the shareholders' remuneration must also be settled. After the company has been formed, the shareholders can create additional capital besides the share capital. This may be capital for specific purposes, e.g. a reserve capital, supplementary capital and the Company Social Benefits Fund. In addition to cash contributions, shareholders can make non-cash contributions (contributions in kind). The subject of a non-cash contribution may be transferable rights that are useful to the company and can be valued. These include property rights, perpetual usufruct and copyright. A contribution in kind cannot be a life annuity right, rights under a lease agreement or usufruct.
The mandatory bodies in every limited company are the management board and the shareholders' meeting. Up to a share capital of PLN 500,000, establishing a supervisory board and an audit committee depends on the shareholders' needs. If the share capital is higher or the company has more than 25 shareholders, the supervisory board and audit committee are mandatory bodies. The management board is appointed by a shareholders' resolution for a fixed or indefinite term. The composition of the management board must be notified to the KRS within 7 days of its appointment.
An equally important issue is the distribution of profits in a limited company. A shareholder has the right to receive profit shown in the annual financial statements and allocated for distribution by a resolution of the shareholders' meeting. Profit is distributed in proportion to shares, unless the articles of association provide otherwise.
Keeping the accounts in a limited company (sp. z o.o.)
The accounting of a limited company (sp. z o.o.) means full accounting: limited companies cannot keep simplified accounts. For this reason, the shareholders should decide to hire an accounting office to keep the accounts for them. The office will take over the obligations arising from tax regulations and efficiently handle the booking of every transaction. Above all, choose accountants who have valid professional liability insurance. Such a policy is effective protection for the shareholders in the event of any accounting errors.
The Central Register of Beneficial Owners: obligations of limited companies
The main purpose of the Central Register of Beneficial Owners (CRBR) is to counter terrorist financing and money laundering. The public, free-of-charge register contains key information about beneficial owners, and the whole public has access to this data. The CRBR contains, among other things, data on limited liability companies. The legal basis for the Central Register of Beneficial Owners in Poland is the Act of 1 March 2018 on counteracting money laundering and terrorist financing. This act implements Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.
Companies submit notifications to the CRBR electronically. A template provided by the Ministry of Finance is used for this purpose, and the notification is free of charge. The notification must include:
- the name and surname of the person making the notification,
- the function that entitles this person to make the notification,
- citizenship,
- country of residence,
- PESEL number or date of birth, if the person making the notification has no PESEL number.
