The limited liability company

Characteristic of a limited liability company

Such a company is established to conduct all activities permissible by law, by way of a notary deed of association establishment, which specifies:
• a name of a company and its registered office,
• a description of its business nature,
• amount of share capital,
• number of shares that one shareholder may hold,
• number and nominal value of shares acquired by each shareholder,
• term of a company (if limited).

Both individuals and legal entities may be founders. A limited liability company may also be formed by a single shareholder, but it may not be established solely by another single-member limited liability company.

A limited liability company has legal personality and is represented by its Management Board. The minimum initial capital of such a company is PLN 50.000. The minimum nominal value of one share is PLN 500.

Contributions to a limited liability company may be made:
• in cash,
• in kind.

If contribution in kind is in the form of fixed assets, these are exempt from import duty, provided that they are not disposed within 3 years.

A limited liability company acquires legal personality once it is entered into the National Court Register.

Advantages:
• Limited shareholders’ responsibility, but in case they are members of the Management Board they vouch with all wealth they possess,
• There is a possibility to gain more assets by accepting a new shareholder,
• There is a possibility to accept contribution, negotiable assets rights, industrial and trade and technical knowledge (know-how).

Disadvantages:
• Necessity of big financial support to repay a company’s registration expenses and initial capital,
• Handling complex accountancy.

Costs connected with undertaking economic activity

Initial costs connected with undertaking economic activity are relatively high and are as following:
• cost of establishing a notary act,
• cost of a company’s registration,
• announcing a registration process in special documents,
• having a big amount of capital fund,
• taxes.

Registration process

Necessary for establishing a company are:
• signing a notary act,
• shareholders’ financial contributions,
• establishing the Management Board,
• establishing the Board of Directors,
• a company’s registration document.

Obtaining the REGON statistical identification number given by the Statistical Office

After registration process the next step in establishing economic activity is receiving the REGON number.
In this case one has to go to the Statistical Office. The number consists of 9 figures and it is a national register of national economy corporations. This number maybe influenced by changes in law rules.

Reporting economic activity in the Tax Office in order to get the NIP number

Foreigners as well as Polish citizens must obtain the NIP number. A report concerning applying for this number must be done in a proper dwelling place or the company’s location. The motion to receive the NIP number should be folded before any activities including paying the VAT are made. The taxpayers are obliged to include the NIP number on each document concerning its economic activity.

Developing a rubber stamp

A rubber stamp should include a company’s name, a company’s address, the REGON and the NIP number and a bank account number. The necessity to have a rubber stamp is not obliged, only banks demand having it.

Establishing a bank account

An entrepreneur is obliged to establish a special bank account only for conducting economic activity. Establishing a bank account is easily made by signing an agreement with a bank. The only rule is having all the documents previously received in undertaking economic activity.

Reporting in the Social Insurance Office

People conducting economic activity not connected with agriculture, self-employed people must be obligatory insuranced for the health and social benefits. An employer must report this within 7 days time to a proper office.

Reporting the work and the health inspector

An entrepreneur signing an employment agreement is said to be an employer. At the same time he is obliged within 30 days time to inform a proper work and health inspector about location, form and field of conducting economic activity and number of employers. If there are any changes in above mentioned information an entrepreneur must inform proper authorities.