The minimum share capital in a limited liability company is PLN 5,000. This amount is only used to cover initial operating expenses, which forces most companies to seek additional sources of funding. After the initial contribution for the acquisition of shares in the share capital, shareholders cannot make free payments into the company’s account, they always have to be based on an appropriate legal basis.
Before deciding to raise the capital of a limited liability company, it is important to thoroughly understand the potential consequences of a particular form of financial support. For company shareholders who share both profits and losses, understanding these mechanisms will be crucial.
Loan
A common way of financing a company is through a shareholder’s loan. The advantage of this solution is that the funds can be used immediately for the current needs of the business, and the granting of the loan itself does not require registration with the National Court Register. However, it is worth mentioning that such funds do not increase the company’s share capital, and the shareholder retains only a claim for repayment with contractually agreed interest.
When concluding a loan agreement with a partner who is also a member of the management board of a limited liability company, it is important to remember:
- resolution of the shareholders giving their consent to incur an obligation to provide a service with a value twice the amount of the share capital, unless the articles of association exclude the application of Article 230 of the Code of Commercial Companies,
- appointment, in the form of a resolution of the shareholders’ meeting, of a company representative to conclude a loan agreement if the shareholder is also a member of the management board or representation of the company by the supervisory board,
- in the case of a sole shareholder who is also a member of the board of directors, to maintain the form of a notarial deed of the loan agreement.
Additional contributions
The Articles of Association may impose on shareholders an obligation to make additional contributions, which consist of increasing their benefits to the company. These additional contributions should be made by the shareholders in proportion to their shares. If the introduction of additional contributions was not specified at the time of the company’s incorporation, their subsequent introduction requires a unanimous amendment to the articles of association. As in the case of loans, additional contributions do not have to be registered with the National Court Register and constitute funds that the board of directors may freely dispose of. Once the additional contributions are made, they become part of the company’s capital reserve, without increasing the share capital. They are often used as a remedy in situations requiring immediate financing of investments. This action does not generate income for the company. However, as in the case of an increase in share capital – additional contributions are subject to PCC. The tax rate is 0.5% and is charged on the value of the additional contributions made.
Share capital increase
An increase in share capital may consist of either an increase in the number of shares or an increase in their nominal value. The capital increase takes place on the basis of the existing provisions of the articles of association, which specify the maximum amount of the increase and its timing. The absence of such provisions in the articles of association results in the fact that the increase requires a resolution of the shareholders’ meeting amending the articles of association in the form of a notarial deed and the subscription of shares in the increased capital by the shareholders. Shareholders take up the shares for cash or in-kind contributions. The increase in share capital must be registered with the National Court Register. An increase in share capital is subject to a civil law transaction tax of 0.5% on the amount of the increase.
Shareholders may also contribute funds to the company in the form of share capital (agio). If a shareholder takes up a share at a price higher than the nominal value, the excess funds are transferred to the capital reserve. Capital in the form of agio is tax-neutral, since under tax regulations the tax base is the value by which the share capital is increased, not the amount of the surplus.
SKLAW comprehensively supports Polish and foreign entrepreneurs in choosing the way to capitalize a limited liability company in Poland. We provide an individual approach to the entrepreneur’s needs and a comprehensive service when choosing the type of financing of a limited liability company.