How “Polish” are Polish limited liability companies?
Limited liability company is by far one of the most popular organizational and legal forms of business. Quite safe for shareholders, requiring little investment and relatively simple to set up (especially since it is possible with the help of the Ministry of Justice’s S24 portal). It makes it easy to sell shares to third parties and thus attracts investors who can support our business idea.
Limited liability companies in Poland are also created by a great number of foreigners, which is facilitated by the provision of Article 4(3) of the Act of March 6, 2018 on the principles of participation of foreign entrepreneurs and other foreign persons in the course of business in the territory of the Republic of Poland (i.e. Journal of Laws 2025, item 89). Also for this reason
it is not uncommon to find a situation in which to dispose of the shares of a
of a company established and operating in Poland occurs in another country.
Is this even possible? After all, the company should have (and, in principle, also maintain after incorporation) its headquarters in Poland. So it seems logical that all significant events related to its development and share transactions should take place in our country.
International company law
Contrary to appearances, the establishment of a business in one country does not at all mean that it must be closed within its borders. A branch of law known as “international company law” is developing dynamically. It encompasses both so-called “conflict of laws” and substantive norms regarding the creation of investment vehicles designed to operate in business on different markets. It involves regulations:
- resolving the jurisdiction of the law for companies and other economic organizational units (such as family foundations);
- cross-border transfer of registered offices;
- international mergers and acquisitions;
- establishment of representative offices and branches abroad.
Under Polish conditions, central to companies and other economic entities is Article 17 of the Law of February 4, 2011. – Private International Law (Journal of Laws 2023, item 503). It stipulates that
a juridical person is subject to the laws of the country
in which it has its registered office.
However, according to the conflict-of-law rules of that country’s law, there may be a return or further reference to the law of the country under which the legal person was established (Article 17(2) of the PPM).
Disposition of share rights in limited liability companies.
Shares in a limited liability company often represent a very high property value. According to Article 180 § 1 of the Law of September 15, 2000. – Commercial Companies Code (i.e., Journal of Laws of 2024, item 18, as amended):
Sale of a share, a part thereof or a fractional part of a share
and its pledge should be made in writing
with notarized signatures.
It is this last part of the provision that can raise quite a few questions. What does “notarization” actually mean? Does it refer only to the act of a Polish notary? Can it be a foreign notary?
The indicated issue raises no small number of practical doubts. In the extreme variant of interpretation (however, shared by few representatives of the doctrine), only a Polish notary can certify signatures. Otherwise, the contract would be invalid for failure to observe the form. Some (S. Soltysinski) even believe that Article 180 § 1 of the Companies Act is a “rule that compels its application,” so it must be applied without looking at the norms of conflict of laws. However, this is an impractical – and increasingly isolated – view.
An intermediate option is that if a foreign notary performs such a role as in Poland (this applies to the so-called “Latin notary”), he too can effectively certify the signatures. This is because the so-called substitution of form occurs here.
And what if a notary in a given country… cannot be found?
Contrary to appearances, however , there are also countries where the notary does not work. The United States is a model example: the notary public there does not have to be a lawyer at all and does not draw up any notarial deeds. On the other hand, he certifies signatures to documents – and this is the essence of his function.
In the practice of our law firm, we served a client who happened to sell shares in a Polish company in one of the American states. And we successfully convinced the registry court that the share transaction was carried out in a valid manner!
The ratio legis of Article 180 § 1 of the Companies Act is to verify the identity of the persons trading in share rights. With this assumption, there is no need to “throw the baby out with the bathwater” and demand that the certification of signatures be done by a Polish notary public or its close equivalent. The important thing is that it should be a person of public trust, authorized by public authorities, equipped by local law with the appropriate instrumentality and responsible for verifying who sells, donates or pledges a share – and for whose benefit.
