POLISH LIMITED LIABILITY COMPANY – LEGAL SUPPORT IN OPERATIONAL BUSINESS MAINTENANCE AND REPRESENTATION OF SHAREHOLDERS IN COURT

KIELTYKA GLADKOWSKI knows everything about the law related to the Polish limited liability company, the main source of which is the Polish Code of Commercial Companies. This is due to the fact that the corporate team of lawyers of our law firm receives daily inquiries from our foreign clients with legal problems related to the management of a Polish limited liability company. This is due to the fact that the legal form called POLSKA SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ is the most frequently chosen form by foreigners to run a business in Poland, particularly business with international shareholding structure.

KIELTYKA GLADKOWSKI’s knowledge of all legal problems of a Polish limited liability company concerns the very deep sources of Polish law regulating this form of a Polish capital company, which include:

A.THE BASIC LEGAL SOURCE consists of about 150 extensive basic provisions from the Polish Commercial Companies Code, regulating the principles of the full process of functioning of a Polish limited liability company in business transactions in Poland:

– starting from the procedure of establishing such a company, creating Articles of Association (i.e. a company agreement or an act of establishing a company by a sole shareholder of the company),

– through the rules of conducting decision-making processes in a Polish limited liability company, including convening shareholders’ meetings, adopting shareholders’ resolutions and concluding agreements with other business entities on behalf of and for the benefit of such a Polish limited liability company;

– by resolving disputes between shareholders in the form of procedures for appealing against resolutions of shareholders of a Polish limited liability company to the Polish commercial court; submitting claims by minority shareholders to the Polish commercial court for invalidation of resolutions, annulment of shareholders’ decisions as to the company’s assets, distribution of profit in the company, multiplication of additional shares, creating an advantage in voting, i.e. exercising voting rights from shares in a limited liability company;

– through all issues of civil and criminal liability of managers of a limited liability company for the abuse of power in the company and bad financial decisions; all legal problems of the appointment to the company’s management board and other governing bodies;

– through all matters related to the financial movements in the share capital of a limited liability company;

– through all legal problems related to the merger of the company with other entities; division and subdivision as well as amalgamation of the companies;

– finally, through all the issues related to the entire complex process of liquidation of the company.

B.ADDITIONAL LEGAL SOURCES OF LAW CONSIST OF APPROXIMATELY 50 DIFFERENT IMPLEMENTING ACTS, i.e. legal documents issued by Polish legislators which constitute more detailed provisions on a Polish limited liability company, including government regulations;

C. THE POLISH LAW OF A LIMITED LIABILITY COMPANY IS ALSO SUPPLEMENTED BY:
1. widely commented on by lawyers in Poland ORDERS (RULINGS) OF POLISH COMMERCIAL COURTS, which concern various legal situations and disputes in Polish limited liability companies; available in internet databases to which KIELTYKA GLADKOWSKI lawyers have access, there are about 21.5 thousand anonymized cases that show how Polish courts assess the rights of plaintiffs and defendants in Polish courts on the basis of the legal practice of Polish limited liability companies;

2. widely commented on by lawyers in Poland DECISIONS AND GUIDELINES OF POLISH AUTHORITIES, including several hundred basic ORDERS OF THE POLISH STATE AND TERRITORIAL ADMINISTRATION regarding fiscal, tax and social security issues, as well as a FEW THOUSANDS OF REGULATORY OFFICIAL DOCUMENTS, especially in the operational sector of KIELTYKA GLADKOWSKI’s foreign clients from the pharmaceutical, IT, commercial, real estate and energy industries;

3. EUROPEAN UNION LAW, including implemented legal acts of the European Union, including IN PARTICULAR IMPLENENTED ACTS ESTABLISHED BY THE BODIES OF THE EUROPEAN UNION;

4. OTHER LEGAL DOCUMENTS, INCLUDING MORE THAN 5 POLISH AMENDING ACTS OF LAW, IN THE WAY OF WHICH THE POLISH PARLIAMENT OVER THE YEARS MODIFIED THE POLISH CODE OF COMMERCIAL COMPANIES AND THE POLISH BASIC LAW REGULATING THE PRINCIPLES OF COOPERATION OF LIMITED LIABILITY COMPANIES;

5. Due to the fact that the main initiator of the Polish legislative process is the Polish government, official justifications of the draft amendments to Polish regulations are also important, especially in advising on court disputes.

D.KIELTYKA GLADKOWSKI also advises foreign clients on the basis of all Polish and EU accounting and tax regulations, including:
– provisions concerning the law of keeping accounting books, financial statements;

tax and accounting regulations concerning the regulation of capital flows in capital companies operating on foreign markets within capital groups;

– provisions of Polish tax law in the field of POLISH CORPORATE AND PERSONAL INCOME TAX LAW;

– provisions of Polish tax law in the field of POLISH VAT TAX and related EU regulations.

The very high popularity of this legal form of company in Poland results from the following elements of the legal status of this type of company:

  1. A limited liability company may be established in Poland via the Internet via the online portal of the Polish Ministry of Justice;
  2. It is a legal form that reduces the risk of liability for the company’s debts in Poland and abroad;
  3. It is a legal form that has relatively low income taxes and great flexibility in business management;
  4. In principle, the structure of a limited liability company allows the possibility for the same person (entity) to perform the role of all the necessary (and obligatory) bodies of the company, including both the management of the company (company management board) and the role of the owner in the company – shareholder (i.e. an entity that has shares and is owner of the company).

KIELTYKA GLADKOWSKI offers legal advisory services in all matters of limited liability companies.

Operational and business matters related to running a business in Poland based on the legal structure of a Polish limited liability company include:

  1. Legal support in establishing a Polish limited liability company, including in particular deciding whether the company is to be established on the basis of general and standard rules when using the online portal;
  2. If it is decided that tailored made Articles of Association (AoA) are needed for a specific business project, the client needs to negotiate with all shareholders of the company on the content of such an agreement, which must be established before a Polish notary public;
  3. KIELTYKA GLADKOWSKI offers legal support with implementing any changes to the legal rules in the company, including personal changes in the company’s bodies; changes to the articles of association, changes to the subject of the company’s activity;
  4. KIELTYKA GLADKOWSKI offers legal support in the company’s annual settlements with shareholders and with the Polish tax office;
  5. We offer legal support in the organization and holding of the company’s shareholders’ meeting;
  6. We provide legal support in adopting resolutions of the shareholders’ meeting;
  7. We assist in advising on the submission of company’s documents to the Polish registry court;
  8. We assist in legal support in keeping accounting books;
  9. Our law firm provides legal support in managing the company’s employment and accounting principles;
  10. We offer legal advice on the liquidation of a limited liability company; support in the entire process of transformation and restructuring of a Polish limited liability company.

Therefore, legal advice from KIELTYKA GLADKOWSKI regarding the legal form of running a business in Poland in the form of a Polish limited liability company includes:

LEGAL PROCESS OF ESTABLISHING AND SETTING UP A NEW COMPANY (SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ) IN POLAND, INCLUDING FORMATION OF A COMPANY WITH LIMITED LIABILITY (SPÓŁKA Z O.O.) AND NEGOTIATION OF ARTICLES OF ASSOCIATION

The first step in creating a limited liability company in Poland is to conclude a limited liability company agreement. KIELTYKA GLADKOWSKI offers legal advice in the preparation and editing of the content of a limited liability company agreement, which can be established in Poland both online via a special portal of registration courts of the Polish Ministry of Justice, and by the conventional method before a Polish notary public.

As part of consultancy, KIELTYKA GLADKOWSKI analyzes the following legal issues with a foreign client:

  • Many legal companies recommend establishing a company using the electronic method via an online portal; the method of establishing a company online is the cheapest and fastest solution compared to the classic form of establishing a limited liability company by way of an agreement in the form of a notarial deed. An online limited liability company agreement is concluded using the template agreement available by the Polish Ministry of Justice. Unfortunately, the online procedure does not always meet the expectations of foreign customers, especially in the case of large corporations. When setting up an online company, a foreign client agrees to a rigid AoA template that contains ONLY BASIC elements and the mandatory content of the company’s agreement. A simple online contract template is designed to create very general and basic principles of operation of shareholders in the company, without additional security of interests;
  • Therefore, with large investment projects in Poland and the immediate involvement of a very large amount of financial resources, KIELTYKA GLADKOWSKI recommends from the very beginning to draft the appropriate AoA individually, which, for example, take into account:
    • tax optimization of the company’s income for the shareholders;
    • spreading the shareholders’ responsibility for decisions in the company;
    • proper protection of the shareholders against hostile takeover of the company;
    • legal regulation of the contribution in kind in the form of non-cash coverage of shares.
  • By creating individual articles of association, from the very beginning of the limited liability company, additional actions to amend the AoA are avoided, and this significantly accelerates the process of the final shape of the shareholders’ control over the company.
  • Properly prepared AoA significantly facilitate running a business, while errors in the articles of association will translate into an unnecessary extension of the process of establishing a company.
  • In order to avoid unnecessary complications, it is worth using the experience of KIELTYKA GLADKOWSKI. When drawing up AoA, attention should be paid to what contractual clauses can be included in it. The Client also needs to consider which provisions will be needed or useful, taking into account the specificity of the company, its size or the scope of activity. KIELTYKA GLADKOWSKI offers advice on the optimal selection of optional AoA records and the consequences of their placement. We advise on what solutions to choose, taking into account the individual needs of the client.
  • In a limited liability company, the articles of association are similar to the articles of association of a joint-stock company, because the AoAs define the internal structure of the company and the rules of its operation.
  • The key element of the articles of association which has a huge impact on its functioning, is the distribution of shares in the company. Therefore, KIELTYKA GLADKOWSKI, when drawing up the above-mentioned articles of association, takes into account, first of all, the determination of their number and nominal value as well as the shareholders they are entitled to. It is also necessary to indicate whether a shareholder may have more than one share, and thus whether the shares are equal or not. It should be remembered that when it is stipulated in the articles of association that a shareholder may have more than one share, all shares in the share capital must be equal and indivisible. The regulations of the Polish Commercial Companies Code also open up other possibilities. There can be, among others, established preference shares.
  • KIELTYKA GLADKOWSKI offers advice on the regulation of the sale of shares in AoA – a well-structured company agreement should define the rules for the sale of shares. Moreover, AoA may impose restrictions on shareholders in disposing of their shares by requiring approval by the company’s management board or by creating other restrictions.
  • KIELTYKA GLADKOWSKI offers advice on the AoA regulation of the issue of subsidizing shares and other methods of “adding money” by shareholders to the company; therefore, in the AoAs, shareholders may be required to pay additional payments for each share. They make it possible to increase the company’s own funds without changing the shareholders’ shares. Such a provision must therefore be included in the contract.
  • KIELTYKA GLADKOWSKI also advises on the limitation of joining the company – we advise on legal problems in the event of joining the company by other entities by operation of law. Therefore, when drafting the articles of association, the client should consider limiting or excluding this possibility.
  • KIELTYKA GLADKOWSKI has ready-made legal solutions and proven proprietary contractual clauses regarding legal problems related to profit distribution in the company and profit distribution or loss problem for a given financial year – as a rule, a shareholder has the right to a share in the profit corresponding to his share in the company. However, the AoA may provide for a different method of profit distribution. The AoA may also authorize the management board to pay an advance on the expected dividend.
  • KIELTYKA GLADKOWSKI also offers legal support in the event of an in-kind contribution. In the event that such a contribution is to be made to the company, it must be clearly stated in the AoAs, together with the shareholder who is to take up shares in return for it. It is necessary to prepare a valuation of the in-kind contribution according to the transfer value as of the date of concluding the articles of association, when a new company is established, or on the day of making the contribution, when the contribution is contributed to an existing company.

All the above legal issues are regulated in the articles of association of a limited liability company, even if the AoA does not directly regulate such legal structures, because in this case the standard solutions provided for in the Code of Commercial Companies will apply.

The regulations of the Polish Commercial Companies Code provide entrepreneurs with numerous opportunities to shape the internal operation of their companies. However, the legal consequences of placing individual provisions or their lack are not always known to entrepreneurs beforehand. Legal support on how to structure a limited liability company to ensure its optimal operation may prove decisive for its effectiveness on the market as well as protection of the shareholders’ assets and position in the company.

LEGAL AND OPERATING ADVICE IN AN EXISTING LIMITED LIABILITY COMPANY

KIELTYKA GLADKOWSKI advises its foreign clients on issues related to the company’s existence. Examples of legal issues that KIELTYKA GLADKOWSKI renders current legal assistance include:

  • CHANGES IN THE ORGANIZATIONAL STRUCTURE OF POLISH LIMITED LIABILITY COMPANY; KIELTYKA GLADKOWSKI supports its foreign clients in the procedure of changing the AoAs. We offer comprehensive advice on the restructuring of a limited liability company and, consequently, any changes to the provisions of the existing AoAs;
  • legal advice on all issues related to the value of shares in the company and on the valuation of shares equal and unequal to the nominal value; legal advice on the legal framework for the number of shares per shareholder;
  • KIELTYKA GLADKOWSKI advises on all issues of share capital, the procedure of increasing or reducing the share capital in a capital company; our law firm advises on legal problems of the nominal value of shares;
  • acquisition of shares by a foreign capital company in a Polish limited liability company;
  • We advise on legal structures of changing the ownership structure and its changes;
  • Our legal support also applies to situations where the ownership structure may change as a result of various operations, and which changes may result from:
    • sale of shares;
    • share capital increases, which in principle require changes to the articles of association. This can happen in two ways:
      • establishing new shares and taking them up by existing or new shareholders;
      • increasing the nominal value of existing shares.
  • KIELTYKA GLADKOWSKI advises on increasing the share capital from company’s own funds. We advise especially in situations where the shareholders are entitled to new shares in relation to their existing shares, or the nominal value is increased accordingly.

LEGAL ADVICE ON MAKING IN-KIND CONTRIBUTION TO A LIMITED LIABILITY COMPANY

If the contribution to the company in order to cover the shares is to be in whole or in part a non-cash contribution (in-kind contribution), the articles of association should specify in detail the subject of the contribution and the person of the shareholder making the in-kind contribution, as well as the number and nominal value of the shares taken up in exchange.

KIELTYKA GLADKOWSKI advises on all issues of a practical approach to contributing non-monetary assets to the company:

  • we deal with the valuation and the problem of transfer of cross-border assets from abroad to a Polish limited liability company;
  • we advise on entries in the books of accounts and accounting of non-monetary property transferred to a Polish limited liability company in return for taking up shares by a foreign shareholder.

LEGAL ADVICE RELATING TO THE RIGHTS OF THE COMPANY’S SHAREHOLDERS

KIELTYKA GLADKOWSKI advises on the basis of the principle of equal rights of shareholders and on the issues of preference shares in a limited liability company.

We advise on all legal problems concerning shareholders in situations where the law (the legal provisions) or the articles of association give to the shareholders specific rights and obligations in the company.

If the articles of association provide for shares with special rights, these rights should be specified in the AoA (preference shares). KIELTYKA GLADKOWSKI has ready-made solutions related to the rights of shareholders in a limited liability company.

KIELTYKA GLADKOWSKI advises foreign clients on privileging shares in a limited liability company, which may relate, in particular, to voting rights, the right to dividends or the method of participation in the division of property in the event of liquidation of the company. Preference in terms of voting rights may only apply to shares with an equal nominal value.

KIELTYKA GLADKOWSKI also advises on legal issues of in-kind revaluation.

KIELTYKA GLADKOWSKI renders experienced support in respect of the decision-making processes in the company’s bodies

As a rule, in a Polish limited liability company, the management board is entitled to represent and manage the company’s affairs. This applies to all court and out-of-court activities of the company. The AoA must specify the manner of representing the company, especially if the management board is composed of more than one person.

KIELTYKA GLADKOWSKI has ready-made legal solutions based on many years of legal experience regulating the issues of the decisive vote of the president of the management board in voting on the resolutions of the management board of a limited liability company. The AoA may define the decisive power of the vote of the president of the management board, and such solutions are used by our law firm for the benefit of our foreign clients.

KIELTYKA GLADKOWSKI supports foreign clients in decisions regarding the company’s direction of operations, which are taken by the shareholders’ meeting. The resolutions of this body require one of the most important matters of the company. Shareholders’ meeting, among others, approves the management board’s report on the company’s operations for the financial year, decides on the sale or lease of the enterprise, as well as on the purchase and sale of real estate, or on the return of subsidies.

KIELTYKA GLADKOWSKI prepares a decision – making procedure in a limited liability company when disposing of the right or incurring an obligation to provide a benefit exceeding the amount of the share capital.

ADAPTING CORPORATE LAW TO THE REMOTE MANAGEMENT OF THE COMPANY

Our offer also covers legal services for companies established via the Internet in the S24 system. KIELTYKA GLADKOWSKI organizes all formalities for its clients through the ICT system, including the creation of interactive forms for all necessary documents on the website of the Polish Ministry of Justice S24 website.

Also in the case of an interactive online procedure, there are many possibilities for creating internal relations of the company, for example:

  • modification of the financial year;
  • the issue of cash contribution to the company.

REMOTE DECISIONS AND RESOLUTIONS IN THE COMPANY

KIELTYKA GLADKOWSKI advises on all issues of virtual (remote) board meetings, which can be held online, using means of distance communication, unless the AoAs provide otherwise. The Management Board may adopt resolutions remotely in this manner or in writing.

Our law firm advises foreign clients on creating virtual decision-making environment for the company’s shareholders’ meeting.

It is also possible to take part in the shareholders’ meeting online via electronic means of communication. However, the notification must provide information on the manner of participation and expression at such a meeting. In addition, the Supervisory Board, or if there is no such Supervisory Board, the shareholders are required to adopt regulations specifying the rules of the online meeting.

We advise on all legal aspects of the circular procedure of written meetings of shareholders; we advise on shareholders’ resolutions which may also be adopted without convening a meeting. All shareholders must then agree in writing to the decision or to vote in writing.

TAX OPTIMIZATION OF SHAREHOLDERS OF A CAPITAL COMPANY

Despite many benefits, running a business as a limited liability company is associated with double taxation. The company must pay CIT on the income earned, and the shareholders pay PIT on the dividend paid.

One of the ways to reduce the costs incurred in this way consists in establishing two companies, a limited liability company and a general partnership. The general partnership would transfer the assets to the limited liability company or conclude agreements with its shareholders. In this way, the limited liability company will obtain lower income, which will result in lower CIT settlements. The partners of a general partnership will only settle the PIT tax return on their shares.

REMUNERATION AGREEMENTS BETWEEN THE COMPANY AND ITS MANAGER AND SHAREHOLDER

A popular solution in limited liability companies is the employment of a manager as a board member. Discrepancies appear on the basis of what contract should be between such a person and the company.

The employment contract means relatively high employment costs for the company; from the perspective of a shareholder employed in the company, however, such a solution creates many positive opportunities to derive profits from a limited liability company. KIELTYKA GLADKOWSKI advises on the employment processes in a limited liability company, such as: paid leave, sickness benefit, maternity benefit, permanent social protection, regardless of the source of income generated in the company.

KIELTYKA GLADKOWSKI has ready-made legal structures for the circulation of documentation in a limited liability company related to employment, because remuneration is tax deductible cost in the company. Conclusion of an employment contract between a Polish limited liability company and a shareholder as the managing director of this company creates the necessity to report such employment of a manager as an employee to the Polish social insurance system.

KIELTYKA GLADKOWSKI has ready-made legal structures for the circulation of documentation in a limited liability company related to a different form of paying remuneration to the managers in the company than employment under the Polish Labor Code, in the form – for example – of a mandate contract – such a contract differs from an employment contract mainly in that it can be terminated at any time, without having to indicate the cause, as a rule. In addition, claims for the payment of remuneration expire after 2 years, as opposed to the 3-year period under the employment contract. Above all, however, the principal does not have to grant holiday leave or pay remuneration for the period of illness.

The company often concludes civil law contracts with shareholders performing functions in the company’s management bodies. The management board is, as a rule, a body authorized to representation of the company. In some cases a situation may arise where a management board member concludes a contract with himself – such situation is not allowed. The provisions of the Polish Commercial Companies Code provide that in the conclusion of such an agreement, the company shall be represented by the supervisory board or an appointed attorney (proxy). It can only be an attorney (proxy) who has been granted a generic or specific power of attorney. The power of attorney must be in the form of a shareholders’ resolution.

COMPANY’S PUBLICATIONS IN THE ECONOMIC JOURNAL

KIELTYKA GLADKOWSKI cares about due diligence in the performance by foreign clients of all general information obligations regarding mandatory publications in the official judicial and economic journals. The court and economic journal includes all data entries about the limited liability company, including:

  • detailed information related to the division of companies, such as the publication of a division plan for a limited liability company in distributed capital;
  • other entries.

CRITICAL CURRENTLY ENCOUNTERED MATTERS OF A LIMITED LIABILITY COMPANY

We offer day-to-day legal services for the company in the course of its operations, including in particular the MOST COMMONLY REPORTED PROBLEMS:

  1. Preparation and evaluation of AoA drafts; We also provide opinions on employment contracts and various civil law contracts. The most common are: share sale agreement, management contract, assignment agreement, set-off, outsourcing agreement, sale, specific task, lease or rental agreement;
  2. The share sale agreement is of the greatest importance for the distribution of shares in the company. A shareholder may sell shares to another shareholder or to a person from outside the company, who then becomes a shareholder. The articles of association may impose restrictions on the sale of shares, or make the effectiveness of the sale dependent on the consent of the company;
  3. Management contract – it is an unnamed contract, it takes a form similar to a mandate or an employment contract. The company entrusts the administrator with running its affairs;
  4. Outsourcing agreement – it is an unnamed contract, for the use of external sources; it consists in transferring tasks to another enterprise;
  5. Legal assistance for the shareholders’ meetings and meetings of the management board, supervisory board or audit committee;
  6. Representing shareholders, also as attorneys in Polish courts in matters of shares-related property and power in a company;
  7. Drafting and issuing opinions on draft resolutions of the bodies of a limited liability company, mainly in the following matters:
    • Increasing and reducing the share capital;
    • Additional payments to shares and share capital;
    • Approval of the financial statements for the company’s financial year;
    • Granting discharge to members of the governing bodies of a limited liability company;
    • Payment of a dividend or a dividend advance for a shareholder from the company’s assets and the company’s profits in a given financial year;
  8. We advise on the procedure of redemption of shareholders’ shares in a limited liability company;
  9. We advise on problems with personnel changes in the company, such as dismissal of management board members;
  10. Preparation and analysis of internal corporate acts, in particular by-laws of the company’s bodies;
  11. Preparation and editing of pleadings, in particular:
    • Demand for payment;
    • Application for exemption from court fees;
    • Statement of claim in writ of payment proceedings;
    • A claim in a writ of payment proceedings;
    • The defendant’s objection to the payment order;
    • Appeal;
    • Opposition to the default judgment;
    • Declaration of bankruptcy;
  12. Preparation and editing of letters of execution, such as:
    • the debtor’s appeal against the decision granting the enforcement clause;
    • the debtor’s complaint against the bailiff’s actions;
    • suspension of enforcement;
    • e-sale of real estate belonging to the company.

COURT PROCEEDINGS RELATED TO SHAREHOLDERS’ DISPUTES IN POLISH LLC

An important aspect of the operation of a limited liability company, which usually requires legal service, are disputes within the company. Sometimes conflicts between shareholders are inevitable, which can paralyze the effectiveness of the company’s operations.

We offer support in resolving such conflicts.

PROCEDURE INITIATED BY A SHAREHOLDER’S APPLICATION FOR REVOKING A CORPORATE RESOLUTION BY A POLISH COURT

The Commercial Companies Code provides for the possibility of appealing against shareholder’s resolution if it is inconsistent with the articles of association or good practice and is detrimental to the interests of the company or is intended to harm a shareholder.

Such an action may be brought by the management board, the supervisory board or the audit committee and their individual members, a shareholder who voted against the resolution, a shareholder unjustifiably prevented from voting, a shareholder who was not present at the meeting, in the event of a defective convocation or adoption of a resolution on an issue not included in the agenda. In the event of a written vote, a shareholder who was omitted during the vote or who did not agree to a written vote or who voted against the resolution and raised an objection may also lodge the claim upon receipt of the information about the said resolution.

The action shall be brought within one month from the date of receipt of the information on the resolution, but not later than within 6 months.

PROCEEDINGS FOR DECLARING THE INVALIDITY OF A CORPORATE RESOLUTION

The same entities as mentioned above have the right to bring an action for the declaration of invalidity of a resolution that is inconsistent with the law. It should be noted that this is not about the content of the resolution being inconsistent with the articles of association, but with a generally applicable law. Violation of the law by a company’s resolution applies to both substantive and formal regulations. Often the subject of an appeal for the invalidation of a resolution is the defectiveness of an entry in the share ledger (register). Non-compliance with the law may also concern not only the content of the legal transaction, but also failure to comply with other statutory requirements, such as the deadline. Likewise, convening a shareholders’ meeting by incorrectly appointed persons is qualified as a violation. However, formal deficiencies may be the grounds for appeal only if they had an impact on the content of the resolution.

In proceedings for the repeal of a resolution and declaration of invalidity, the company is represented by the management board or an attorney (proxy), if appointed for this purpose. If the management board cannot act for the company, the court appoints a curator.

A final judgment on this resolution is binding between the company and the shareholders, as well as between the company and the members of the governing bodies. However, when the company has performed a legal action dependent on this resolution, its revocation has no effect on third parties acting in good faith. The judgment on revocation must be reported to the registry court.

In practice, the most frequently challenged resolutions are additional payments, redemption or sale of shares for profit distribution. To a lesser extent, these are conflicts in the company’s bodies, disputes over powers and matters of managing the company’s assets as well as resolutions approving the end of the financial year or granting discharge to members of the management board.

PROCEEDINGS FOR EXCLUSION OF A SHAREHOLDER FROM THE COMPANY

The Polish court may order the exclusion of a shareholder from the company for important reasons, at the request of all other shareholders, if they together constitute more than half of the share capital. The articles of association may grant this right to a smaller number of shareholders, if their shares constitute more than a half.

The excluded shareholder shall be paid the price with interest. The court sets an appropriate deadline. If the amount is not paid, the exclusion is ineffective. If this happens, the shareholder who was to be excluded will have a claim for damages against the others.

This solution is used primarily in the event of a conflict that paralyzes the operation of the company. Important reasons are not defined in the statute, but most often it is a conflict between the company’s bodies, disputes over powers, lack of agreement between shareholders in many areas and conflicts on the basis of profit distribution, additional payments and redemption or sale of shares.

RESTRUCTURING THE POLISH LIMITED LIABILITY COMPANY (SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ)

KIELTYKA GLADKOWSKI takes care about the interests of foreign clients in particularly complex matters related to mergers, dissolution and liquidation of limited liability companies.

We offer our legal support in the field of company mergers, including cross-border mergers. Our services include:

  • Choosing the most optimal method of transforming the company, taking into account the individual circumstances of the client. Choice between merger by acquisition, formation of a new company;
  • Preparing and giving opinions on the merger plan of companies along with all the necessary documents and submitting the plan to the registry court;
  • Preparation of a management report justifying the merger;
  • Preparation and editing of the resolution on the merger and submission of this resolution to the registry court;
  • Legal services for bringing an action to set aside or annul such a resolution of shareholders also in the procedure of cross-border mergers;
  • Creating an application for a certificate of compliance with Polish law of a cross-border merger.

KIELTYKA GLADKOWSKI ALSO PROVIDES LEGAL ASSISTANCE IN RESPECT OF THE DIVISION OF COMPANIES AND INCLUDES:

  • Choosing the best method of dividing the company. The following methods are allowed under Polish law: division of a Polish limited liability company by acquisition, division of a Polish limited liability company by establishment of new companies, division of a Polish limited liability company by acquisition and formation of a new company, division of a Polish limited liability company by spinning off parts of its enterprise;
  • Preparing and giving opinions on the division plan together with the necessary documents and submitting the plan to the company’s registry court;
  • Preparation and analysis of the management board report on the division procedure of the company;
  • Preparation and analysis of a resolution on division and submitting it to the company’s registry court;
  • If necessary, we provide legal services for bringing an action to set aside or annul the resolution on the division of a Polish limited liability company.

LEGAL SERVICES RENDERED IN RELATION TO TRANSFORMATIONS OF COMPANIES:

  • Choosing an appropriate method of transformation of company;
  • Preparation and editing of the transformation plan;
  • Preparation and analysis of the shareholders’ resolution on transformation;
  • Preparation and editing of an application for entry into the National Court Register of the transformed company;
  • Legal assistance in the event of an action to set aside or annul a resolution on the transformation of the company.

DISSOLUTION AND LIQUIDATION OF LIMITED LIABILITY COMPANIES

We also advise on the dissolution and liquidation of companies; we prepare complex and comprehensive documentation needed in the liquidation process, in particular:

  • We advise on the selection of the appropriate method of dissolution and liquidation of the company;
  • We prepare the notification of the opening of liquidation to the registry court;
  • We prepare resolutions on the dissolution of the company and putting it into liquidation as well as advise on resolutions regarding an announcement on the dissolution of the company and opening of liquidation in the registry court and commercial journal;
  • Preparation and editing of an application to remove a company from the register.

LEGAL ASSISTANCE IN REGISTRATION ISSUES

The legal offer of KIELTYKA GLADKOWSKI includes representing foreign clients before the Polish National Registry Court. As part of this service, we offer comprehensive legal services in the field of preparing, reviewing and submitting applications to the Polish National Court Register, and preparing as well as submitting entries made via the ICT system, which are currently held by three online portals, in particular operated by the Polish Ministry of Justice, the Court Registers Portal and the portal “S24”.

In particular, we prepare and analyze:

  • applications for entering the company into the register of entrepreneurs of the National Court Register, along with the necessary documents;
  • requests to amend the articles of association;
  • requests to enter changes to data in the share register;
  • pleadings to the registry court;
  • financial documents submitted to the Repository of Financial Documents.

ACCOUNTING, BOOKKEEPING AND TAX MATTERS AS WELL AS ARRANGING REGISTERED OFFICE (INCLUDING VIRTUAL OFFICE)

Our law firm also offers services in the field of accounting and bookkeeping matters. A limited liability company is obliged to keep full accounting. This means that the company must in particular:

•             have a special corporate bank account set up;

•             disclose entries in the books of accounts;

•             prepare financial statements at the end of the financial year;

•             keep records of all proceeds passing through the company.

When making a registration in the National Court Register, limited liability company in Poland needs to present a registered address (office) in Poland. As a rule, this office may be a virtual office, having address for registration and service of documents purposes. KIELTYKA GLADKOWSKI assists at all stages of choosing the office and signing the relevant rental agreement.

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