The shareholders of a Polish limited liability
company (spółka z ograniczoną odpowiedzialnością)
have several ways they can use to inject the company
with additional capital. The most frequent of these
comprise: increasing the initial capital, additional
payments (dopłaty), and loans.
An increase of the initial capital is effected by
increasing the nominal value of existing shares or by
issuing fresh ones. Importantly, an increase of the
initial capital requires that the shareholders adopt an
appropriate resolution and subscribe for (acquire)
shares in the increased initial capital. The shares can
be acquired in exchange for both cash and non-cash
(in-kind) contributions. If the company’s articles of
association set the ceiling for the value of the initial
capital and a lime limit for its increase, there is no
need to amend the articles of association to increase
the capital. The increase of the initial capital can also
be based on the supplementary capital or reserve
capital (funds) established from the company’s
profit. Such manner of initial capital increase
requires a shareholders’ resolution to amend the
company’s articles of association, the fresh shares
are vested in the shareholders pro rata to the shares
held, and do not required to be subscribed for
(acquired). Unless the company’s articles of
association or the resolution to increase the initial
capital provide otherwise, the existing shareholders
have the right of pre-emption to acquire fresh shares
in the increased initial capital, pro rata to the shares
held. An increase of the share capital is subject to the
transfer tax. The additional costs for the company
comprise, if its articles of association need
amending, the notarial fee.
As regards additional payments, the company’s
articles of association may obligate shareholders to
make additional payments up to a numerically
specified ceiling, relative to the shares held.
Additional payments are imposed and paid by
shareholders evenly in proportion to their shares.
The Commercial Companies Code provides a
possibility of refunding additional payments to the
shareholders. Pursuant to Article 179 of the
Commercial Companies Code, additional payments
may be refunded to the shareholders if they are not
required to cover a loss reported in the financial
statements. The refund itself may be effected
following expiry of one month after the date of
announcement of the intended refund in the journal
designated
for
the
company’s
corporate
announcements and is made equally to all the
shareholders. Additional payments are subject to the
transfer tax that the company is required to pay, at
0.5 percent of the amount contributed on account of
the additional payments. Importantly, tax authorities
have developed an interpretation according to which,
if the company’s articles of association do not
include provisions permitting additional payments,
additional payments contributed to the company are
treated as revenues subject in their full amount to the
corporate income tax.
The last of the ways used most frequently to increase
capitalization of a limited liability company by its
shareholders are loans extended to the company. It
must be stressed that the loan should bear a standard
market interest rate, as an interest-free loan may be
treated as a value contributed to the company free of
charge and consequently as constituting taxable
income. Loans granted by the shareholders are not
subject to the transfer tax, and the very loan
agreement must meet the requirements laid down
under provisions of the Civil Code.
As has already been noted at the beginning, while
the above ways of injecting capital into a limited
liability company are those applied most often, they
do not exhaust the list of possible methods of
increasing company capitalization. When selecting
the most beneficial solution, one should thoroughly
examine all its legal facets as well as tax
consequences.
MILLER, CANFIELD,
W. BABICKI, A. CHEŁCHOWSKI I WSPÓLNICY SP.K.
ul. Batorego 28-32
81-366 Gdynia
Tel. +48 58 782-0050
Fax +48 58 782-0060
gdynia@pl.millercanfield.com
ul. Nowogrodzka 11
00-513 Warszawa
Tel. +48 22 447-4300
Fax +48 22 447-4301
warszawa@pl.millercanfield.com
ul. Skarbowców 23a
53-125 Wrocław
Tel. +48 71 780-3100
Fax +48 71 780-3101
wroclaw@pl.millercanfield.com
Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield. It is intended to provide only a summary
of certain recent legal developments of selected areas of law. For this reason the information contained in this publication should not form the
basis of any decision as to a particular course of action; nor should it be relied on as legal advice or regarded as a substitute for detailed advice in
individual cases. The services of a competent professional adviser should be obtained in each instance so that the applicability of the relevant
legislation or other legal development to the particular facts can be verified.