Transfering personal money into company in Poland

The minimum value of the share capital in a limited liability company in Poland is PLN 5.000. This amount covers only the initial operating costs of Polish company. The share capital money runs out very quickly. This raises the question how to finance companies activities? What to do if you run out of money in a Polish company?

You can not simply transfer money to your Polish company’s bank account. You have to select appropriate finance method from the very beginning as there is always a need to assign a specific legal basis to a given payment.

1. Loan between shareholder and company in Poland

The most popular form of financing the Polish company is granting of a loan by its shareholder or shareholders.  

Advantages:

  1. funds obtained upon loan can be immediately used for current operations by Polish company;
  2. loan does not require registration in the National Court Register;
  3. funds are not subject to tax on civil law transactions.

Disadvantages:

  1. in order to avoid charging income tax for a company for free benefits, the loan should bear interest and include a commission, which should be on market value level;
  2. if the shareholders (lender) is also member of the management board additional formalities has to be performed.

2. Extra contributions paid by the shareholders equally in proportion to their respective shares

The Articles of Association of company in Poland may obligate its shareholders to make additional payments, i.e. increase their benefits to the company. Additional payments should be made by shareholders in proportion to amount of their shares. Additional contributions are a form of money benefit to the company and are paid to increase its assets. They neither increase shares nor share capital, but they are included in supplementary capital of the Polish company.

Advantages:

  1. in case of multi-shareholders company additional contributions assure joint financing and responsibility for companies operations;

Disadvantages:

  1. extra contributions, unlike loans, are subject to a tax on civil law transactions in the 0.5% rate of the amount of additional payments, which must be paid within 14 days of the shareholders resolution on making additional payments;
  2. possibility of extra contributions has to be stipulated in the Articles of Association;

3. Increase of the share capital in Poland

Advantages:

  1. invested by shareholder/s amounts are reflected in the official amount of share capital of the company;

Disadvantages:

  1. formalized procedure, requires notification of National Court Register and may require amendments to Articles of Association;
  2. subject to a tax on civil law transactions in the 0.5% rate of the amount of increase, which must be paid within 14 days of the shareholders resolution on increasing share capital;

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