A limited liability company is the second most frequently chosen form of business in Poland, after a sole proprietorship. If you plan to set up such a company, check what mistakes to avoid when registering it.
Formal errors in the application for registration of a limited liability company
An application for entry of a company into the National Court Register is just the beginning of the road. The application must be reviewed by the court, which may reject the application. Such cases are usually dealt with by a court referendary.
The application may specify an incorrect name for the company. This will be the case if the name is not unique. It is also a mistake to use terms reserved for business entities with special rights. Examples of such terms include:
- insurance company,
- tax advisor,
- bank.
If the company has such terms in its name, but does not have the authority to carry out such activity, the application for its registration will be rejected.
Another mistake is the incorrect determination of the court competent to hear the case. Admittedly, this will not result in the rejection of the application. The court to which the application has been submitted is obliged to refer such a case to the court with territorial jurisdiction. However, this will cause a delay in the registration of the company in the National Court Register, because such action requires additional time.
Selection of shareholders and the company’s management board
The shareholders must make contributions to the company. However, their role does not end there. They have a real impact on resolutions adopted at the general meeting. Pursuant to Article 236 § 1 of the CCC, the company’s shareholders who represent at least 10% of the company’s capital may request the convening of an extraordinary shareholders’ meeting.
If the individual partners cannot come to an agreement, it can negatively affect the company’s operations. Admittedly, they will not push through their solutions without a majority, but they may, for example, convene shareholders’ meetings too often.
It is also a common mistake to choose the wrong people for the company’s management board, which has quite a lot of powers. This is all the more so when the articles of association allow for single-person representation of the company by members of the management board.
Shareholders may dismiss a person in whom they have lost confidence from their position as a member of the management board. However, all contracts signed before the dismissal of such a person will remain in force.
Obligation to pay tax on civil law transactions on the articles of association of a limited liability company
A common mistake is late payment of tax on civil law transactions related to the establishment of a company. Such a tax should be paid by the company, not its shareholders. Its amount depends on the size of the share capital. The rate of this tax is 0.5%.
When calculating the amount of this tax, it is possible to subtract the costs of court fees charged for entry in the National Court Register and publication of this entry in the Court and Economic Monitor. In the case of a limited liability company with the lowest possible share capital of PLN 5,000 registered by S24, the tax on civil law transactions to be paid will amount to PLN 23. In this case, PLN 350 of court fees are subtracted from the entire value of the share capital and 0.5% tax should be calculated from the amount calculated in this way, rounding up to full zlotys.
It is worth remembering that the time to pay the tax on civil law transactions is only 14 days. The deadline for payment of this tax must be counted from the date of signing the articles of association, not from the date of its entry in the National Court Register. If this deadline is exceeded, you can file an active regret, which can protect against the consequences of such delay.
