The limited liability company has its roots in German law. It is a relatively new institution, as it was first introduced into the Polish legal order under Józef Piłsudski. It was regulated in 1919 by the Decree on Limited Liability Companies. Subsequently - in 1934 - in the The Commercial Code came into force, which It remained in force until 2001. After that, the lifeand the - currently in force - Commercial Companies Code came into force. It regulates extensively not only the rules of companies, but also that, how the limited liability company agreement should be drafted.
Read also: Changes to the Commercial Companies Code from 13 October. What will they cover?
Ltd. contract. - How to set up a company via the Internet (S24)
Starting with the basics, it is important to mentionthat limited liability company is a capital company. The partners - apart from a fixed contribution - are generally not liable for its obligations. The company is formed by a shareholders' agreement, which must be in the form of a notarial deed. In a situation where a limited liability company is established by a single entity (yes, it is possible with this type of company), the equivalent of the contract is the memorandum of association of the limited liability company.
Polish law allows incorporation of a limited liability company via the internet. The presence of a notary is then not required. Worth bearing in mind, that in such a case the contract must, however, be drawn up in accordance with the model company contract specified in the ICT system by the Ministry of Justice. This template contains only the basic elements that should be included in the articles of association - those without which the company cannot be formed at all. These elements are: the identification of the company's registered office, the partners, the type of business carried out or the method of representation.
Missing from the template prepared in this way are many other essential elements that will be indispensable in the future running of the business. Hence, we recommend communicating on this issue with an experienced lawyer who:
- will analyse the needs of the entrepreneur from the very beginning of the creation of the business entity,
- will implement other important contractual clauses that will safeguard the interests not only of the company itself, but also of the shareholders.
Defectsthey do notof using professional legal assistance for the incorporation of a company is that for each 'instalment' change, a single application will require another fee. This is because amending the articles of association entails not only a notarial fee, but also a court fee related to the entry of the changes into the National Court Register. In addition - time and more time... It should be remembered that the physical changes to the articles of association are not effective until they are entered into the court register.
Is S24 always the best solution?
S24 Company is therefore a good solution for those who intend to carry out undemanding activities, where standard and simple contractual provisions will suffice. If there are to be many more partners and the scope of the company's activities is to be more extensive - it is definitely a better idea to set up the company in the traditional form, i.e. with the help of a legal adviser/lawyer and in the form of a notarised contract.
A properly drafted contract at the formulation stage can allow theć avoid problems on many levels relating to the running of the company and the internal relations between the company bodies and even between the shareholders themselves.
The limited liability company contract and its elements
What elements can a limited liability company's articles of association contain in order to best protect the interests of its shareholders and the company?
This is a question that everyone asks themselves when setting up a company. At first glance, all these issues involved in setting up a company may seem very clear. However, the number of clauses that need to be taken into account in the context of the future business makes us feel very overwhelmed.
When drafting your limited liability company agreement, it is worth thinking about a number of important elements which, in addition to the standard ones, will significantly improve your position. We point them out below.
Preference shares
As a rule, it isthat shares in the company are equal. Shareholders in a company should be treated equally. However, it is possible to introduce preferential shares, which will mean that specific shares will mean 'more'. For example - pWhen voting, the share of one of the shareholders will give him three votes. A non-preference share, on the other hand, will have a simple value of one vote.
Disposal and pledging of shares
It is possible to limit the shareholders' power to sell or pledge a share. As a general rule, each shareholder is free to trade in the shares he holds. In particular - without consulting the company - he may sell them to someone else. It is, of course, possible to limit this freedom.
Inheritance of shares
One of the existing principles in the legislation is thatThe company's shares are hereditary, so the heirs take the place of the shareholder in the company. If company to have only certain persons as partners, it is possible to limit or exclude the entry of heirs into the company.
Redemption of shares
It is also possible to regulate the redemption of shares in the articles of association. There are three types of redemption:
- voluntary (with the consent of the partner),
- compulsory (without the consent of the shareholder),
- automatic (when an event specified in the articles of association occurs).
Power to convene a shareholders' meeting
As a general rule, the board of directors convenes the shareholders' meeting. However, it is possible to assign such a power to other persons as well.
Facilitating share capital increases
The share capital is issuesregulated in the articles of association. In order to increase it, an amendment to that agreement is required. However, provisions concerning the maximum amount of the share capital increase and the timing of the increase can already be introduced at the drafting stage of the agreement.
Ltd. contract and commissioning of its preparation. Assistance of legal advisor/attorney in drafting contracts
During the drafting of the agreement, the professional assistance of a solicitor or barrister can facilitate the constitution of the company and also speed up the registration process. Such a decision may additionally allowdo better Understanding the specifics of doing business in this form will also help dispel doubts about many other issues that may arise when building a company's strategy.
It is worthwhile to implement legal knowledge and experience at the very beginning in order to prevent future problems and the search for solutions in sub-optimal situations. The time gained, the optimisation of costs and the avoidance of unnecessary hassle and worry at a later stage of the business is something worth taking care of.
You have doubts or are not sure how toregister a company? Or perhaps you would like to discuss the issue of the completion of all requirements for its establishment? We are at your service from Monday to Friday from 9.00 a.m. to 5.00 p.m. Tel.
