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INTRODUCTION If you’re looking to form an offshore company, one of the biggest decisions you’ll need to make is which jurisdiction you would like to set it up in.
Japan’s food self-sufficiency rate was 73% in 1965 falling to 37% in 1993. The rate held around 40% from 1998 to 2007 and slowly crept up to 41% in 2008 (compare this with 128% for the United States and 70% for Britain in 2003). At the national level, the goal is to return to 70% self-sufficiency. Add to this heightened consumer demand in Japan for ‘safer’ food and greater uniformity in appearance of the food and you have the start of a trend in food production.
Despite its crowds and fast pace of life, Japanese society retains an air of politeness, ongoing respect for traditional values and a low crime rate. On this last point, a recent report by the Japan Times showed a 40% drop in crimes from 2,800,000 in 2002 to 1,700,000 a decade later. Putting this in perspective, this is about 1,360 crimes per 100,000 Japanese residents compared to 3.466 per 100,000 in the United States.
In July 2010 police found the body of an 111 year-old, nominally Japan’s oldest man, lying in bed. The problem was that he had died 30 years earlier. By the time he was discovered, his 81 year-old daughter had collected JPY9M (about US$109,000) in pension payments. Subsequent investigations showed that this was not an isolated incident:
Debt Japan's government debt exceeds that of other industrialised nations while gross debt is around 200% of GDP (in the US, UK and Germany the ratio is below 100%). While the financial markets are punishing Ireland, Greece and Portugal for their high public borrowings, Japan stands largely immune.
Poland: Company Formation Update
N&W have put together a comprehensive update outlining everything you need to know.
Incorporation needn't be complex. Providing you know what to do, and have the necessary documents, fees and forms, there should be no reason for delay or confusion. Company formation is Poland has been changing, so N&W have kindly put together a comprehensive update outlining everything you need to know.
The following documents are required by Polish law for purposes of incorporation:
- Articles of association, which should determine at least: the name and seat of the company, the object of the companys activities (as specified in Polish Classification of Activities PKD), the amount of the share capital, whether or not a shareholder is entitled to more than one share, number and nominal value of the shares subscribed for by individual shareholders, the term of the company, if it is defined;
- Statements of the shareholders on taking up shares (usually contained in the articles of incorporation);
- The appointment of the management board (usually contained in the articles of incorporation);
- If there is only one shareholder, an excerpt from National Court Register is required, since Polish law prohibits the incorporation of a single-shareholder company by another single-shareholder company;
More detailed documents are required in relation to the registration with different offices.
Having concluded the articles of association, the limited liability company in organisation is created. It is represented by the management board or by an attorney in fact appointed by a unanimous resolution of the shareholders. In a single-shareholder company in organisation, the single shareholder does not have the right to represent the company (except for filing for registration with the registry court).
Further on, the contributions to finance the entire share capital (and, where the share is subscribed for a price higher than the nominal value, also contributing the balance) are required, as well as the constitution of the supervisory board or the audit committee (if any,) and the registration with the register within the deadline of six months of the date of conclusion of the articles of association.
Following registration of the company, the management board shall, within two weeks, file a copy of the articles of association, certified by the management board, with the appropriate tax office, and indicate the court where the company has been registered, as well as the date and the registration number.
Subsequently, the registration with the National Statistics Agency (GUS) and the Social Security Agency (ZUS) are required.
Prior to the General Meeting of Shareholders
Firstly, the draft of articles of association issued by N&W should be accepted by the Client. In addition to the documents above, we should receive the power of attorney relating to the incorporation, since the articles of association must be concluded in a notarial deed form before a notary public in Poland. The form of this power of attorney needs to comply with the provisions of the law governing the incorporation of the company in Poland. It should above all be signed before a notary public and be certificated by apostille.
What documents will be needed to complete the application to enter the Company on the National Court Register?
The following documents will be required (apart from the filing):
- The articles of association;
- The representation of all members of the management board that the contribution towards the share capital have been made by all shareholders in full;
- A proof of the appointment of the members of the company governing bodies with details of their memberships, if the notarial deed which includes the articles of association does not provide this information. The list of the members of the management board should also include their addresses;
- A list of shareholders signed by all members of the management board, including the surname and the first name or the business name and the number and the nominal value of the shares of each shareholder. The fact if there is only one shareholder, needs to be underlined;
- Sample signatures of members of the management board put before the court or certified by a notary (by apostille);
- The evidence of payment of fees for court registration and publication in Monitor Sądowy i Gospodarczy (Official Commercial Court Journal).
- The application for registration shall be signed by all the members of the management board or by our lawyer acting within the power of attorney issued by the management board of the company.
All taxpaying entrepreneurs are under the obligation to register into tax filling system upon which they are awarded a Taxpayer's Identification Number (NIP). Taxpayers can apply for the tax identification while submitting:
- an excerpt from National Court Register;
- the articles of association;
- certified document authorizing the use of the premises or real estate, constituting the registered seat of the company (i.e. rental agreement);
- certificate of the REGON (GUS) item;
- a bank account agreement;
- the evidence of payment of fees for VAT registration.
The above documents do not need to be filed in original, however the copies need to be officially certified. However, the catalogue of the documentation required is not closed, and therefore additional documents may be requested, i.e. powers of attorney, contracts concluded with the accounting office, if any.
The VAT registration shall be completed before a first income activity which results in tax obligation is undertaken concerning the VAT taxpayers or before the first submission of the corporate income tax declaration whichever occurs earlier.
For purpose of the GUS registration, in addition to filling the form, simply a copy of the registration certificate or a statutory declaration confirming incorporation of an enterprise and that its activity has been already commenced are required.
REGON statistical number can be also obtained by a limited liability company "in organization", i.e. before its registration by the court is completed. Then, the application need to be appended with a notarial deed incorporating a company while obtaining the REGON.
No documents are required apart from filling the relevant forms. The ZUS registration must be completed within 7 days from the start of the business activity.
The above documents will be prepared by our lawyers and sent to you for the purpose of acceptance by the Client. Having received the acceptance, the documents will be filed by our lawyers. On your request we can also provide the certified translations.
There are some restrictions posed by Polish law to all the forms of the companies. Namely, there is a requirement for licenses in case of activities relating to: search and discernment of mineral deposits, production of explosive products, production, processing of motor fuel, security service, broadcasting of TV and radio program, etc.
For some other activities, an authorisation is required, for example for conducting of activities in special economic zones. The Regulation of the Council of Ministers on the Katowicka Special Economic Zone of the 14 September 2004 (further referred as to the Regulation) enumerates the business operations for which the permit shall not be granted.
Below, you will find the fees, which have to be paid on incorporation provided that the share capital has a minimum required value of PLN 50,000. However, additional fees may incur during the process of incorporation.
- registration with National Court Register including the Official Commercial Court Journal fee PLN 1,500,-
- notarial fee for the conclusion of the articles of association: about PLN 1000,-
- tax on civil and legal proceedings (with respect to a companys deed of formation amounts to 0.5% of the companys initial capital): 0,5% of PLN 50,000 = PLN 250,-
- VAT registration PLN 170,-
- GUS registration no charge;
- ZUS registration no charge.
In addition the costs of certified translations of documents, certifications by the public notary of various documents, and other if necessary or requested by the Client, will have to be borne by the Client.
Minimum share capital
The minimum share capital for a limited liability company is PLN 5,000. (The nominal value of a share may not be lower than PLN 50).
Effects of share capital on the running of the Company
The share capital has impact on the dimension of the company and consequently on its investments only.
How much of this must be issued or paid-up?
In the event of a limited liability company the entire share capital must be paid-up in full prior to the registration.
Who is responsible for the daily running of the company?
It is the management board, which manages the affairs of the company and represents the company.
How do they take decisions?
The rule of taking decisions is as follows: each member of the management board may, without a prior resolution of the management board, manage the affairs, which do not exceed the ordinary affairs of the company. However, adoption of a resolution on the meeting of the members of the management board is required, if at least one of the remaining members of the management board objects to the conclusion of a matter or if the matter falls outside the ordinary affairs of the company. The resolution is to be adopted by an absolute majority of votes.
This matter can be established otherwise in the articles of association or in the internal Management Board Rules, concluded by the resolution of the shareholders.
Is there a minimum number of people?
The management board shall include at least one person.
Is there any requirement for any director(s) to be Polish national or Polish resident?
No, there are no such requirements.
How is the company represented to third parties?
If the management board comprises of several members and the articles of association do not stipulate other rules for representation, then the representations in the name of the company may be made by two members of the management board acting jointly or by one member of the management board acting together with a holder of the commercial power of attorney (a proxy).
The representations addressed to the company may be made and written communications to the company may be served on one member of the management board or on a proxy. Moreover, a creation of a single-person or a joint commercial power of attorney is not excluded.Furthermore, the right of a member of the management board to represent the company may not be restricted with a legal effect vis--vis third parties.
What is the relationship between the shareholders and the board?
The management board is fully controlled by the shareholders. Each shareholder is entitled to control the company at any time by inspecting the books and documents of the company, drawing up a balance sheet for his use or request explanations from the management board. Moreover, some companys actions require the prior consent of the shareholders (for details see points 21 and 25).
What regulations or guidelines control the Companys actions?
For controlling purposes some companys action shall be regulated directly in the articles of association. Polish law only refers to few matters requiring a resolution of the shareholders, namely:
- consideration and approval of the management board report on the operations of the company, the financial report for the previous financial year and the granting of approval of the performance of duties by the company governing bodies;
- decision on claims for redress of damage caused upon formation of the company or its management or supervision;
- disposal of or tenancy of the enterprise or its organised part and the creation of a limited right in rem over them;
- acquisition and disposal of real estate, the right of perpetual usufruct, or a share in real estate, unless the articles of association provide otherwise;
- repayment of additional contributions;
- conclusion of an agreement for management of dependent company;
- a disposal of a right or contracting of an obligation to provide performance of a value exceeding twice the amount of the share capital, unless the articles of association provide otherwise;
Apart from the said above, in the event of a limited liability company, the articles of association may create a supervisory board or an audit committee, or both. However, the creation of at least one of those bodies is only compulsory in companies whose share capital exceeds PLN 500,000 and where there are more than twenty-five shareholders.
There is also a possibility of establishing the management board rules of conduct.
Are there any rules or special restrictions, which apply to a foreign company operating in Poland?
According to the Act on freedom of the business activity the foreign companies are entitled to operate in Poland under the same conditions as the Polish companies do. However, non-EU and non-EFTA companies can conduct their business activities in Poland in certain legal forms only. Limited liability partnership is one of them.
Does the company need to have a separate bank account in Poland?
A foreign company does not need a separate bank account, if he acts only as a shareholder in a Polish company, unlike the incorporated company. It is obligatory for the entrepreneurs operating in Poland to open the bank account. The entrepreneurs are required to make or accept payments through the bank account whenever:
- the other party to a transaction is another entrepreneur;
- once-off value of receivables or payables, notwithstanding of the number of payments it is constituted of, exceeds the equivalent of € 15,000.00, converted into the PLN at the average exchange rate announced by the National Bank of Poland on the last day of the month preceding the month of transaction.
How often must the General Meeting be held?
The ordinary general meeting must be held at least once a year it shall be held within six months of the end of each financial year, that is before the end of June provided that the financial year of the company shall overlap with the calendar year.
What types of decisions must be taken at General Meetings?
The ordinary general meeting shall have on its agenda:
- consideration and approval of the management board report on the operations of the company and on the financial report for the previous financial year;
- adoption of a resolution on division of profits or financing of losses if such matters have not been excluded from the competence of the general meeting by articles of association;
- granting approval of the performance of duties by the members of the company governing bodies.
In the cases above a written vote is excluded, which means that those matters have to be issued at the general meeting.
The ordinary general meeting may also consider and approve the financial report of a capital group and other matters, usually specified in the articles of association.
In the event of an extraordinary general meeting, it shall be convened in the cases stipulated in Polish law or in the articles of association, or as well when the governing bodies or persons authorized to convene the general meeting consider this desirable, i.e. a mandatory convocation takes place, where the balance sheet drawn up by the management board shows a loss exceeding the aggregated supplementary and reserve capitals and half of the share capital.
The shareholder may be represented by our lawyer at each of the meetings.
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