Who may become a shareholder in a limited liability company?
A limited liability company, abbreviated as spółka z o.o., is the most popular form of conducting business activity in Poland and most willingly bought company from among all ready-made companies for sale.
The following persons may establish a limited liability company, thereby becoming its shareholders:
- one or more natural or legal person regardless of citizenship and place of the company’s seat, except for a single-shareholder limited liability company,
- an unincorporated body, or person without legal personality, but having capacity for acts in law. Unincorporated bodies include without limitation: commercial partnerships such as registered partnerships, professional partnerships, limited partnerships and limited joint-stock partnerships,
- association, unless the company deed provides otherwise.
A share capital of PLN 5,000 is required to establish a limited liability company.
Liability of shareholders
A limited liability company is a company with share capital, what means that shareholders are liable for the obligations of the company only to the amount of contributions made to the share capital. It is the company that is liable for its obligations with all its assets without any limits. Only when the enforcement against the company proves to be ineffective, the members of the management board, including shareholders being members of the management board, are jointly and severally liable for obligations of the company.
Further, in the event of negligence or wilful misconduct regarding the coverage of the share capital, management board members and the shareholders forming the management board, are jointly and severally liable with the company towards the creditors for 3 years from registration of the company or registration of the share capital increase.
Limited liability company is the most suitable form of conducting business activity for persons willing to limit their liability with their personal property while preserving control and supervision over the company.
Rights and obligation of the shareholders
The shareholders have equal rights and obligations in a limited liability company, unless the company deed provides otherwise.
- The shareholders may choose any name as the company business name (however, the business name should differ from other company names and include a designation "spółka z ograniczoną odpowiedzialnością" ["limited liability company”] or an abbreviation „Sp. z o.o.” or „Spółka z o.o.).
- The shareholders may register the company via Internet using template articles.
- The shareholders may have one share, or more (as determined by the company deed). Where it is permissible for a shareholder to have more than one share, all shares in the share capital must be equal and indivisible.
- A shareholder may transfer their shares on the basis of a contract of sale, gift contract or innominate contract.
- Where a shareholder holds only one share, a shareholder may transfer a part of their share. The company deed may admit the transfer of a part of share if the division does not result in the creation of shares of value lower than 50 PLN.
- A shareholder is entitled to a share in the profits (dividend) resulting from the annual financial statements and allocated under a resolution of the general meeting for distribution. The amount assigned for distribution cannot exceed the profit for the last financial year.
- Unless the company deed provides otherwise, the distributable profit is divided in proportion to the shares held.
- Each shareholder may review the register of shares.
- Unless the company deed provides otherwise, the shareholders are entitled to an advance on the dividend expected at the end of the financial year if the company has sufficient funds for such payment (its financial statements show a profit for the last financial year).
- The shareholders who were entitled to shares on the date of the resolution on distribution of profit are entitled to receive dividend for a given financial year.
- The shareholders may be appointed to the management board.
- The shareholders may amend the company deed by way of resolution of shareholders and entry to the register.
- Each shareholder enjoys the right to control the company (may at any time inspect the books and documents of the company, draw up a balance sheet for their use or request explanations from the management board).
- The shareholders representing at least one tenth of the share capital may request that the extraordinary general meeting of shareholders be convened, and that certain matters be placed on the agenda of the meeting.
- The shareholders representing at least one twentieth of the share capital may request that certain matters be placed on the agenda of the next general meeting of shareholders.
- The shareholders may inspect the book of minutes and request copies of the resolutions, certified by the management board.
- Unless the company deed or the resolution on increase of the share capital provides otherwise, the existing shareholders shall have priority in subscribing for the new shares in the increased share capital in proportion to their existing shares.
- The shareholders have the right to adopt resolution at the general meeting. A general meeting of shareholders is convened by the management board.
- For significant reasons, the shareholders may request that a given shareholder be expelled from the company. The court may rule on the expulsion from the company where all of the remaining shareholders so request, if the shares of the shareholders who seek the expulsion represent more than half of the share capital.
- The shareholders who render non-monetary performances to the company are entitled to remuneration paid out by the company.
- At formation of the company, the shareholders are obliged to execute the company deed in the form of a notary’s deed.
- The shareholders are only obliged to performances specified in the company deed.
- Where the company registration is made via Internet, the shareholders can only make cash contributions towards the share capital.
- A shareholder may be obliged to render for the company non-monetary performances or specific type of work related to the company’s activity.
- A shareholder who received payment in breach of the law or the provisions of the company deed, is obliged to return it.
- A sole shareholder in a single-shareholder company is obliged to exercise all rights of the general meeting of shareholders.
- The members of the management board, including shareholders being members of the board, in the event of negligence or wilful misconduct regarding the coverage of the share capital, are jointly and severally liable with the company towards the creditors for 3 years from registration of the company or registration of the share capital increase.
- The members of the management board, including shareholders being members of the board, are jointly and severally liable for the company’s obligations if enforcement against the company has proven to be ineffective.
- Each shareholder is obliged to make contribution towards the share capital in full when filing for registration of the company.
- In the value of in-kind contributions was considerably inflated in relation to their sale value as at the date of the conclusion of the company deed, the shareholder who made such a contribution and members of the management board who, knowing this, filed for registration of the company, shall be jointly and severally liable to make good the outstanding balance to the company.
- The company deed may obligate the shareholders to make additional capital contributions up to a certain specified amount in proportion to the shares.
- In companies of share capital exceeding PLN 500,000 and of more than 25 shareholders, appointment of a supervisory board / audit commission is mandatory.