Polish limited liability company (pol. spółka z ograniczoną odpowiedzialnością) can be be closed and deleted from the register of entrepreneurs. From a legal point of view, closing down a company is a multi-stage process, which consists of the following steps:
1. company dissolution
2. appointing liquidator(s)
3. notifying registration court and publishing an announcement about liquidation
4. liquidation actions
5. dividing the company’s assets remaining after liquidation
6. preparation and approval of a final liquidation statements
7. striking off the company from the register of entrepreneurs
During the liquidation process it is also required to comply with accounting regulations. The details of Polish company winding-up process are described below.
The whole liquidation process usually takes at least 7-8 months.
First two steps of limited liability company liquidation process in Poland are usually completed at the same time – during one meeting of shareholders, and are contained in a single document signed in the form of notarial deed.
The resolution on company dissolution must be adopted by the company’s shareholders, which requires a 2/3 majority of votes. Shareholders may vote on the resolutions personally (by way of signing documents in the presence of public notary in Poland) or by representatives.
As from the moment of adopting a resolution on the dissolution of the company, liquidation is opened. Henceforth, the company must use its business name in modified version - with addition of the designation “w likwidacji” which means “in liquidation”. The existing management board (board of directors) of the company loses the right to represent it and is replaced by liquidators. As liquidators may be appointment former management board members or other persons.
The newly appointed liquidators are obliged to draw up a liquidation opening balance sheet. This document is in practice usually drafted by the company's accountants and signed by the liquidators. The balance must be approved by shareholders.
As a next step, the liquidators are required to notify the company registration court (KRS) about taken actions. Among others, it is required to file with the court the documents specified above, such as the notarial deed containing resolutions of company dissolution and appointing liquidator(s), opening balance sheet etc.
After examining documents, the company court shall update the company’s data in register of entrepreneurs.
Additional obligation of liquidators is publishing announcement in the Polish company gazette (MSiG) on opening liquidation and summoning creditors to report their claims within 3 months.
Liquidation is a set of actions taken by liquidators in order to terminate the company's operations. Liquidators should close the current business of the company, collect receivables, fulfil obligation and dispose of the company's assets. New business may be undertaken only when this is necessary in order to close the current business.
The assets remaining after satisfying or securing the company’s creditors may be distributed among shareholders no sooner than six months after the announcement of the opening of liquidation and summoning the creditors in proportion to the shares held by each shareholder.
After dividing the remaining company’s assets among shareholders, the liquidators shall draw up a final liquidation financial statements (liquidation statements) and announce them at the company's registered office. In addition, the liquidation statements must be approved by shareholders.
As last step, the liquidators are obliged to file with the registration court an application to strike the company off the register of entrepreneurs together with the liquidation statements. After examining documents, the registration court shall strike the company off the register. From this date, the company shall cease to exist.
After striking the company off the register, the company accounting books must be kept by a designated person for a period which, in principle, is 5 years.
Liquidation of Polish limited liability company results in striking the company off the register of entrepreneurs. Restoration of the company registration at a later date is not possible.
Therefore, if the shareholders are only interested in temporary cessation of activity, they may consider suspending the company instead of liquidating it. Suspension allows for significant reduction of formalities and costs connected with the company's operation.
LF LEGAL provides comprehensive services on Polish company liquidation and suspension in particular to companies with participation of forigners.