Limited liability company

A limited liability company is a separate legal entity, which means that it has legal personality and its own assets, separate from the assets of its owners. The main advantage for entrepreneurs is the fact that shareholders are generally not personally liable for the company's debts, and their risk is only limited to their capital contributions. In addition, this legal form is characterised by less formalism and lower operating costs as compared to other companies, such as a joint-stock company.

Running a limited liability company involves less formalism in day-to-day operations: 

• The majority of resolutions (e.g. on the approval of the financial statements or the formation of the management board) can be adopted in regular written form, without engaging a notary. 
• The management board keeps a list of shareholders on its own. Therefore, it is not necessary to draw up a register of shareholders maintained by a professional third party, which would generate additional expenses.
• The provisions of the articles of association of a limited liability company can be very flexible, unless they are against the law.

Yes, the law provides for one major restriction: a limited liability company cannot be set up by another single-member limited liability company alone. This prohibition also applies to international equivalents of such a company (e.g. a German GmbH). It is worth knowing that this restriction applies only at the time of setting up the company. In its course of operations afterwards, all its shares can be purchased by one legal entity.

Incorporation of a limited liability company requires compliance with several formal requirements: first, the articles of association must be adopted (in the form of a notarial deed of or via the S24 System). Then, the shareholders are obliged to make contributions to cover the share capital, the minimum amount of which is PLN 5 000. The next steps are forming the management board and (optionally) the supervisory board, with the final stage being entry into the National Court Register (Polish: Krajowy Rejestr Sądowy – KRS). It should be remembered that from the adoption of the articles of association to the moment of incorporation, the company functions as a “company in organisation” and has the right to operate to a limited extent.

The minimum share capital in a limited liability company is only PLN 5,000, which is a substantially lower amount than that of a joint stock company (PLN 100,000). The costs of registration in the National Court Register depend on the selected route: 

• registration via the S24 System (online): the total fee is PLN 250 
• traditional registration (notarial deed): the total fee is PLN 500 (with a notarial fee and civil-law transactions tax on top of that) 

The current amounts of the fees are regulated in the Act Amending the National Court Register Act and Certain Other Statutes of 26 September 2025, which took effect on 29 November 2025.

The choice depends on the shareholders' needs regarding the flexibility of the articles of association and the duration of the process: 

• The S24 System is faster (in theory 24h, in practice several days) and cheaper (a court fee of PLN 250), but introduces a fixed model of articles of association which cannot be freely modified.
• The notarial-deed form provides for full flexibility in drafting the provisions of the articles of association (e.g. rules governing share redemptions, additional contributions), which is more effective in securing the shareholders' interests, but involves higher costs (a notarial fee, a court fee of PLN 500) and longer duration of registration (on average 4 to 5 weeks).

The current amounts of the fees are regulated in the Act Amending the National Court Register Act and Certain Other Statutes of 26 September 2025, which took effect on 29 November 2025. 

After the adoption of the articles of association, the so-called “company in organisation” is established, which can start operating and incurring liabilities, but must be entered into the register. The application for registration in the National Court Register must be submitted within six months from the adoption of the articles of association. If this time limit is exceeded, the limited liability company in organisation ceases to exist by virtue of law, and its registration will be cancelled.

After the company's registration, there are a number of reporting activities to be taken: 

• Registration in the Central Register of Ultimate Beneficial Owners: within 14 days, the ultimate beneficial owners must be registered in the Central Register of Ultimate Beneficial Owners (Polish: Centralny Rejestr Beneficjentów Rzeczywistych – CRBR). 
• Supplementary data (NIP-8): within 21 days (or seven days, if there are employees in the company), the tax authorities must be provided with such data as the bank account number or the place of keeping the accounting records. 
• VAT registration: must be made before conducting the first taxable transaction, unless the company enjoys certain exemptions.

The most important obligation is to pay civil-law transactions tax, which amounts to 0.5% of the share capital. If the company is registered via S24, the company needs to assess and pay the tax and file the PCC-3 return independently within 14 days from the adoption of the articles of association. In the case of a notarial-deed form, these obligations are taken over by the notary as a tax remitter. Furthermore, the application to enter the company into the National Court Register must be submitted within six months from the adoption of the articles of association, otherwise the company is dissolved by virtue of law.

For failure to comply with formal requirements, Polish legislation provides for very severe penalties. The penalty for failure to register the ultimate beneficial owners is up to PLN 1,000,000. Failure to comply with the obligations concerning the NIP-8 declaration or VAT registration may be deemed as a fiscal misdemeanour or offence and subject to a fine. Furthermore, failure to file the annual financial statements may involve not only a fine, but even a penalty of restriction of liberty imposed on the responsible individuals. Finally, failure to comply with the obligation to convene a general meeting exposes the board members to the risk of a fine of up to PLN 20,000.

Virtually anybody can become a shareholder: a natural person (an individual), a legal entity (e.g. another company), or an organisational unit without legal personality (e.g. a partnership). Importantly, shares can also be held by foreigners and minors or legally incapacitated persons (provided that they act through a guardian or parent). A shareholder is a person who holds at least one share in the company and is given specific rights (e.g. to profit, i.e. dividend) and obligations.

Yes, the law provides for specific exceptions to the principle of no personal liability. Shareholders may be held liable e.g. in the following situations: 

• The liabilities have been incurred before the registration of the company in the National Court Register (joint and several liability with the persons acting on behalf of the company). 
• There has been significant overvaluation of in-kind contributions in relation to their transfer value. 
• Wilful damage was inflicted on the company during its formation process, contrary to the law.

These are two ways to become a shareholder in the company: 

• Primary acquisition: takes place when shareholders take up newly created shares (e.g. when establishing the company or increasing its capital). Shareholders then enter into an agreement directly with the company and are obliged to contribute capital to it.
• Secondary acquisition: consists in purchasing existing shares from another shareholder. In this situation, the shareholder acquiring the shares transacts with the seller, not the company, and is not obliged to make any new contribution to the company because it has already been made by the previous owner.

A contribution can be:

• Pecuniary: which is simply payment of a specified amount of money.
• In-kind: which can be items or rights of financial value, such as a car, real estate, computer equipment, or shares in another company. An important limitation in the case of a limited liability company is the fact that performance of work or provision of services for the company or rights which cannot be sold (non-transferable) cannot be a contribution.

The rule is that in the case of a limited liability company, the entire contribution must be made before applying to register the company or increase the capital. The management board must submit a declaration that the money or items are at the company's disposal. In the case of in-kind contributions, e.g. real estate, it is necessary to make sure that the appropriate legal form is retained (notarial deed). Experts recommend entering into a separate in-kind contribution agreement in order to avoid problems with the authorities or courts.

Donation is an agreement whereby one person (donor) transfers his or her shares in a company to another person (donee) completely free of charge. It is the only form of share transfer where the donor does not receive any money or other material benefits in exchange.

Not always. Although share trading is generally unrestricted, the articles of association of a particular company can impose major limitations. The most common one is the requirement for the company's consent (typically given by the management board in the form of a resolution). The articles of association may also stipulate that the remaining shareholders have priority in share acquisition or that the donee meets certain requirements, e.g. holding a particular degree.

The law requires that the donation agreement be drawn up in written form, with signatures certified by a notary. It means that the parties prepare the document, but they have to sign it before a notary who will verify their identity. If the company was set up online in the S24 System, the donation can also be made electronically.

Signing the agreement before a notary is not sufficient. The following activities must be also undertaken:

• Notifying the company of the donation and providing the agreement to the company – only from that point on, the donee officially becomes a shareholder in the company.
• The management board must report the change to the National Court Register within seven days.
• The data in the Central Register of Ultimate Beneficial Owners must also be updated within 14 days from making the change in the National Court Register.

Yes, the donation is subject to inheritance and gift tax, and it is payable by the donee. Its amount depends on the value of the shares and the degree to which the parties are related. What is very important is the fact that the closest family (e.g. the spouse, children, parents, or siblings) may be totally exempt from this tax provided that the donation is reported to the tax authorities within six months.

If the spouses have not signed a prenuptial agreement, their assets are included in community property from the time they get married. In such a case, shares in a company purchased with common money become part of the community property even if only one of the spouses is indicated as the owner of the shares in the National Court Register. It means that even though formally only one person is the shareholder, these shares are owned by both spouses from the economic perspective.

Despite the fact that shares may form part of the community property, the rights and obligations of a shareholder (e.g. the right to vote at general meetings) are vested in that spouse who has officially joined the company. The other spouse does not have decision-making powers in issues concerning day-to-day operations of the company and its organisational sphere. However, that situation may drastically change after divorce and the division of property.

Yes, it is a real threat to the stability of the company. After the end of the marriage, the community property is converted into joint ownership, where each of the former spouses holds a specified portion of the shares. In effect, at the division of the property, the court may award the shares to that spouse who has had no involvement with the company whatsoever if that person consents.

The simplest solution is to sign a prenuptial agreement before marriage. However, in the absence of a prenuptial agreement, it is crucial to introduce relevant provisions to the articles of association. The law provides for including clauses which limit or completely exclude the possibility of the shareholder's spouse joining the company in the case of division of the community property.

In such a situation, the court is bound by the articles of association, and the shares are awarded to the spouse who is a shareholder. However, the financial claims of the other spouse are not forfeited, and if the shares have been financed from the community property, the spouse-shareholder will have to pay adequate compensation to his or her ex-partner. A good practice in such a scenario is collecting evidence (e.g. bank transfers) which will be used to identify the source of payment for the shares (community or separate property).

No, a shareholder's death does not cause the dissolution of a company or “disappearance” of the shareholder's shares. The company continues its operations, and the deceased shareholder's shares become part of the estate and devolve to the shareholder's heirs as property rights. It is a major difference as compared to partnerships (e.g. a registered partnership), where a partner's death may cause the discontinuance of the business.

Even though shares are inherited by virtue of law, to effectively exercise their rights (e.g. vote on resolutions), the heirs have to notify the company of the acquisition of the estate. It is necessary to present an official proof, i.e. a certificate of inheritance (from a notary) or a court declaration of succession. On this basis, the management board updates the list of shareholders in the register of shares and reports the changes to the National Court Register.

If the shares of a deceased shareholder devolve to several heirs, they become the co-owners of the shares. To avoid decision-making paralysis, the law requires that the heirs appoint a common representative. This person will represent all the heirs in communication with the company and exercise the rights attached to the shares (e.g. participate in general meetings) until the official partition of the estate.

Yes, if relevant provisions have been included in the articles of association beforehand.

The shareholders may limit or completely exclude the possibility of the heirs substituting the deceased. For instance, it can be stipulated that the new shareholders have to hold specific qualifications. It is a method to secure the company against random or incompetent individuals.

If the articles of association prohibit the heirs from joining the company, the company is obliged to pay them. However, this payment has to follow certain rules – the heirs must receive the amount of money corresponding to the fair (market) value of the shares and within reasonable time. Provisions which would set out an abnormally low price or very late payment date are legally invalid.

The management board is a compulsory executive body of a company and has two main responsibilities: running the company's affairs and its representation. Running affairs means making daily internal decisions concerning management of the company's assets and the organisation of the company. Representation consists in acting externally, e.g. signing agreements with other entities on behalf of the company.

Any natural person with full legal capacity (including a shareholder in the company) can become a member of the management board. A key requirement is to have no criminal record for certain specific economic and financial offences (e.g. abuse of office, bribery, or offences against property or the credibility of documents). If a member of the management board in office is sentenced for such an offence, their mandate automatically expires by operation of law.

The headcount of the management board is specified in the articles of association. If there are less people on the management board than provided for in the articles of association (e.g. one person has resigned when two are required), the so-called non-quorum board is formed. Such a board loses the capacity to function – it cannot represent the company or make any important decisions. Actions taken by an inadequately staffed management board may be deemed legally invalid. 

In such a case, the statutory non-compete regulations apply. Without explicit consent of the company, management board members are not allowed to engage in any competitive activity or participate in any competitive entities (e.g. as partners, shareholders, or members of governing bodies). Otherwise, they may be held financially liable if the company is exposed to any damage.

In accordance with Article 299 of the Polish Commercial Companies Code, members of the management board are liable for the company's debts if enforcement from the company's assets proves ineffective. However, they may be released from this liability if they prove that, in due time, a petition for bankruptcy was filed or restructuring proceedings were opened, or that the member of the management board was not at fault for failure to file for bankruptcy.

Although a member of the management board stops performing his or her function in both cases, the difference is which party makes the decision. Resignation is a unilateral decision of a board member who is not willing or able to perform his or her function. On the other hand, dismissal is a unilateral decision of the company (its governing bodies) to terminate cooperation with a particular person regardless of his or her will.

The declaration on resignation becomes effective when it is received by the company in a way that makes it possible to become familiarised with it. According to guidelines, resignation must be submitted to any of the other members of the management board or authorised agents. Despite the fact that no particular form of resignation is required by law (it can even be verbal), written form is definitely recommended for evidentiary purposes. The only exception is the situation of a single member of the management board who is at the same time the sole shareholder – in this instance, a notarial deed is required.

As a general rule – no. No particular reason or cause has to be provided for the dismissal, unless the articles of association include special provisions regulating this issue. The decision to dismiss is in most cases made in the form of a resolution of the general meeting or supervisory board and is effective regardless of whether or not the dismissed person agrees with it.

No. This is a common misunderstanding of the law. If the management board member and the company are bound by an additional agreement (e.g. an employment contract, service contract, or managerial contract), it does not automatically expire upon resignation or dismissal from the management board. To effectively end such a relation, it is necessary to terminate such contracts separately, either by presenting a termination notice or by agreement.

Once the board member stops performing his or her function, two important registry requirements must be fulfilled:

• The National Court Register: the management board must apply to have that person struck off the register within seven days from the resignation or dismissal.
• The Central Register of Ultimate Beneficial Owners: if the change in the management board has an impact on who is considered the ultimate beneficial owner, the data in that register must be updated within 14 business days.

It is worth noting that these changes are only of declaratory nature – the person ceases to sit on the management board already at the moment of submitting the resignation or adopting the resolution on dismissal, and not at the moment of making the entry into the register.

No, there is no such legal obligation. The Polish Commercial Companies Code uses the general concept of a “member of the management board” and only requires that the management board be composed of at least one person. Whether or not one of these persons is titled president depends exclusively on the internal decision of the shareholders.

From the statutory point of view, both of these functions are generally the same. The president is simply one of the members of the management board and is granted the same basic rights and obligations. The title of the president is often awarded as a token of prestige and is used for the development of the personal brand of the company's leader.

Yes. Even though the law stipulates that all members of the management board are equal, the shareholders may grant the president special rights in the articles of association. The most common ones are: the right to represent the company independently (while the other members must act jointly), having the casting vote when there is a tie in the number of votes, or the right to arrange the work of the entire body.

No. The liability for the company's obligations to creditors is not conditional on the function served in the management board or the title held. Each individual forming the management board – no matter if it is the president, vice-president, or an “ordinary” member – has unlimited, personal, and joint and several liability for the company's debts with the other members.

The number one reason is the need to designate a strong leader and the “frontman” of the enterprise. The president of the management board facilitates communication with business partners and authorities and helps in the internal organisation of the company's work, serving as the support and point of reference for the employees. It is a very useful function from the business perspective, even if there are no additional legal benefits involved.

A general meeting (or shareholders' meeting) is the most important corporate body. It is a forum where the owners (shareholders) make crucial strategic decisions concerning e.g. the distribution of accumulated profit, changes in the composition of the management board, sale of real estate, or continuing existence of the company in the event of big losses. Holding a general meeting in an appropriate manner has an impact on the legal security of the entire company, as procedural errors may render the decisions made at the meeting invalid.

• The Annual General Meeting (AGM): is mandatory and must be held once a year, no later than within six months after the end of the fiscal year. Its main purpose is to approve the financial statements and account for the operating result for the previous year.
• The Extraordinary General Meeting (EGM): may be convened at any time when dealing with urgent matters which require the owners' decision, e.g. a sudden change in the management board or amending the articles of association.

The rules of convening general meetings are precisely defined, so that each shareholder is able to prepare, as follows:

• The invitation must be sent at least two weeks before the date of the meeting.
• It can be sent by registered mail, courier, or (with the shareholder's consent) electronically.
• The letter must include the exact date, time, and place of the meeting, as well as the full agenda. It is worth knowing that the general meeting is normally valid regardless of the number of shares represented, unless the articles of association impose the requirement of the so-called quorum.

There is no such obligation. Shareholders can participate in the meeting and vote through a proxy (a proxy form in writing is required). An increasingly common practice is to attend the general meeting electronically (e.g. via videoconference), unless such form of communication is prohibited in the articles of association. Such a system must ensure two-way communication in real time and give the shareholders the chance to speak.

Shareholders' decisions take the form of resolutions. Regular matters are usually decided by a simple majority of the votes. However, key matters (e.g. amending the articles of association, merging with another company) require a qualified majority (2/3 or 3/4 of the votes). As a general rule, one share in the company entitles the holder to one vote, unless the articles of association provide for so-called preference shares. Importantly, the course of the meeting must be documented in the form of minutes, with certain cases (e.g. amending the articles of association) requiring the presence of a notary.

Share capital is the total value of all the shares in the company which have been taken up by the shareholders. It can be covered by cash or in-kind contributions. Its minimum amount is PLN 5,000. This capital forms the basis of the company’s assets, and its amount affects the credibility of the organisation in the eyes of its business partners and banks, and protects the interests of its creditors.

There are specific reasons for increasing or decreasing the share capital:

• The share capital is usually increased to raise funds for new investments, bring a new investor on board, or simply to build trust in the market.
• The most common reasons for decreasing the share capital are to cover financial losses, return contributions to shareholders in part, or optimise the company’s financial structure.

This process consists of four main stages:

• Adopting a resolution: the shareholders must decide on the change at a general meeting.
• Visiting a notary: changing the share capital usually goes together with amending the articles of association, and this requires the form of a notarial deed.
• Making/returning contributions: shareholders make new contributions (increase) or receive their return (decrease).
• Notifying the court: the management board must report the change to the National Court Register within seven days.

The rule is that any change to the share capital requires an amendment to the articles of association, which must be always certified by a notary. However, there is one exception: if the possibility to increase the share capital up to a particular amount and by a specified date has been prescribed in the articles of association before, changing the share capital can be effected in ordinary written form, without the need to engage a notary. As a rule, for the decision to change the share capital to be valid, a majority of 2/3 of the votes is required.

Irrespective of the procedure, the change to the share capital only takes effect upon its entry into the National Court Register (KRS).

Liquidation is a formal process of winding up the business activity of the company, which is concluded in the entity being struck off the register of entrepreneurs of the National Court Register. Although this can be a difficult decision to make, it provides the possibility to close the business in a secure manner and protect the interests of shareholders and creditors. The most common reasons for opening the liquidation are: 

• loss of financial liquidity,
• achievement of the set business purpose,
• expiry of the time for which the company was incorporated, 
• irreconcilable differences between shareholders.

The process begins with the adoption of a resolution of the general meeting on the dissolution of the company, which must be drawn up in the form of a notarial deed and be approved by a 2/3 majority of the votes. The same resolution provides for the appointment of liquidators (who are usually members of the existing management board), whose responsibility is to wind up the company’s current affairs. The next step is to report the opening of the liquidation to the registry court and add the designation “w likwidacji” (in liquidation) to the company's name.

The liquidators are obliged to issue an announcement about the opening of the liquidation in the Court and Economic Gazette (Polish: Monitor Sądowy i Gospodarczy) without delay. In the announcement, the creditors are summoned to put forward their claims within 3 months from the publication date. In parallel, the liquidators prepare an opening of liquidation balance sheet, collect debts from debtors, and repay or secure the company’s liabilities.

After all the debts have been repaid, the remaining assets of the company are distributed among the shareholders on a pro rata basis to their shares. The liquidators prepare a liquidation report, which must be approved by the shareholders. Another important obligation is to secure the company’s records (e.g. accounting and payroll) by depositing them for safekeeping to a professional archive. The final step is to submit an application to strike the company off the National Court Register and to deregister it with other authorities, such as the Social Insurance Institution (ZUS) and the tax office (VAT register).

One of the most serious mistakes is failure to adopt the resolution on the dissolution of the company in the form of a notarial deed, what makes the entire process ineffective. Another common problem is failure to issue an announcement in the Court and Economic Gazette or to prepare the final liquidation report, resulting in rejection of the application to strike the company off the register by the court. Experts also point to the risks arising from failure to comply with the obligation to deregister from social security and VAT, which may lead to back taxes and potential enforcement proceedings against the liquidators.