4 September 2020
Who may be a shareholder and a Management Board Member in an LLC in Poland?All
A Limited Liability Company in Poland may be established by one or more shareholders. They may be both individuals or legal entities, Polish or foreign. No permit is required for the foreign entities or individuals who want to create a limited liability company in Poland.
There is, however, one important limitation: an LLC which would have only one shareholder cannot be created solely by another LLC which has only one shareholder.
John Brown owns 100% shares in a Limited Liability Company “Brown Horse” seated in the UK.
“Brown Horse” LLC cannot establish a limited liability company in Poland where it would take up 100% shares.
This limitation does not represent a real obstacle though: usually the beneficial owner takes up a small part of the shares and the mother company takes up the rest. As soon as the company is entered in the commercial register these shares may be subject to a transfer. If necessary the beneficial owner may transfer them to the mother company.
“Brown Horse” LLC and John Brown set up a limited liability company in Poland named “Orange Horse”. “Brown Horse” LLC takes up 90% of shares, John Brown takes up 10% of shares. At any time after the registration of the Polish LLC i=in the commercial register John is entitled to transfer 10% of shares to “Brown Horse”. Consequently “Brown Horse” LLC becomes the sole shareholder of “Orange Horse” LLC.
Beware of real property!
It is necessary to underline that a transfer of shares in an LLC who owns real property in some cases is subject to important limitations. If the formalities are not properly fulfilled the transaction may be null and void. I will elaborate on this topic in one of my next articles.
Who can be the Management Board Members?
The members of the Management Board must be individuals. Unlike in other jurisdictions, under Polish law it is not admissible that the position of the Management Board Member is held by a legal person.
The individuals may be either Polish or foreign citizens – no restrictions exist in this regard. It is necessary that the Management Board Members have the qualified electronic signature recognized in Poland. Such signatures are indispensable for filing the financial statement with the registry court and for filing the notification to the register of ultimate beneficial owners. These obligations rest on the Management Board Members and a lawyer cannot do it on their behalf using his/her own electronic signature.
Therefore it is necessary to get the electronic signature for the future Management Board Member before you create an LLC.
4 September 2020 | Agata Adamczyk LL.M
Agata Adamczyk LL.M
Legal CounselWho may be a shareholder and a Management Board Member in an LLC in Poland?