How to Set Up a Limited Liability Company (LLC) in Poland Step by Step?
A limited liability company (“spółka z ograniczoną odpowiedzialnością” in Polish) is one of the most popular forms of business organization in Poland. Thanks to the limited liability of shareholders and the possibility of tax optimization, it is an attractive option for both aspiring entrepreneurs and larger companies. This article provides a detailed guide to setting up an LLC, covering key steps, requirements, and benefits of choosing this legal form.
Key Steps to Prepare for Setting Up an LLC
Signing the Articles of Association
The first step is to sign the articles of association, which define the basic rules for the company’s operation. The articles can be signed:
- at a notary’s office in the form of a notarial deed – a more flexible option that allows for non-standard provisions,
- online via the S24 system – using a standard template.
The articles must include:
- the company name (with “spółka z ograniczoną odpowiedzialnością” or its abbreviation “sp. z o.o.” added),
- the company’s registered office,
- the scope of business activity (PKD code),
- the amount of share capital,
- the number and nominal value of shares.
Gathering Share Capital
The minimum share capital is PLN 5,000. It can be contributed in cash or in-kind (e.g., real estate, machinery). For online registration, contributions must be made exclusively in cash.
Appointing the Management Board
It is necessary to appoint members of the management board who will represent the company. Their details must be included in the registration documents.
Documents Required to Register an LLC
Registering an LLC requires preparing several key documents:
- Articles of Association – containing basic information about the company’s structure and operation.
- Statement on Share Capital Coverage – confirmation that shareholders have contributed their shares.
- PCC-3 Declaration – reporting civil law transaction tax to the tax office.
- NIP-8 Form – submitted to the tax office within 21 days of being entered into the National Court Register (KRS).
- VAT-R Form – submitted at least 7 days before the first transaction if the company will be a VAT taxpayer.
Registration can be completed online via S24 or traditionally through a court registry.
Requirements for LLC Share Capital
The share capital of an LLC must be at least PLN 5,000, with each share having a nominal value of no less than PLN 50. The capital can be contributed in cash or in-kind (e.g., real estate, equipment), but for online registration, only cash contributions are accepted.
Share capital serves as financial security for creditors and enhances the company’s credibility with business partners and financial institutions.
Differences Between LLC and Limited Partnership with Shares
An LLC differs from other legal forms, such as a limited partnership with shares (“spółka komandytowo-akcyjna”), in terms of structure, shareholder liability, and capital requirements:
| Feature | LLC | Limited Partnership with Shares |
|---|---|---|
| Type of Company | Corporate | Hybrid (combines features of personal and corporate entities) |
| Share Capital | Minimum PLN 5,000 | Minimum PLN 50,000 |
| Shareholder Liability | Limited to their contributions | Limited partners are liable up to their contribution; general partners are liable with their personal assets |
| Transferability of Shares | Easy transferability | Transferability restricted by partnership agreement |
| Business Formality | Highly formalized | Less formalized with greater management freedom |
Benefits of Setting Up an LLC Compared to Other Legal Forms
An LLC offers numerous advantages compared to other business forms, such as sole proprietorship or civil partnerships:
| Benefit | LLC | Sole Proprietorship (JDG) |
|---|---|---|
| Shareholder Liability | Limited to contributions – no risk of losing personal assets | Full liability with personal assets – high financial risk |
| Share Capital | Minimum PLN 5,000 – initial contribution required | No initial capital required – low entry barriers |
| Tax Optimization | Eligible for Estonian CIT or preferential CIT rate (9% for small companies) | PIT taxation – progressive or flat rate (17%, 32%) |
| Social Security Contributions | Possible avoidance of ZUS contributions when collaborating with another shareholder | Mandatory ZUS contributions – fixed financial burden |
| Professional Image | Enhanced reputation among investors and business partners | Perceived as less prestigious compared to corporate forms |
| Asset Separation | Personal assets separated from company assets – greater financial security | Personal assets tied to business operations – no protection from creditors |
Setting up an LLC in Poland is a relatively straightforward process, especially when using the S24 system, which allows quick online registration at minimal cost. This type of company offers numerous benefits, such as limited shareholder liability, tax optimization opportunities, and a professional market image.
For individuals planning larger-scale operations or seeking to protect their private assets from business risks, an LLC is one of the best options available on the Polish legal market. Do you need legal assistance? Join Innoglobal!
