Increasing the Share Capital of a Polish sp. z o.o. Without Amending the Articles

When Can the Share Capital Be Increased Without Amending the Articles of Association?

The main condition is that the articles of association must clearly specify:

• the maximum amount up to which the share capital may be increased;
• the deadline by which the increase may be carried out.

If the articles of association do not contain such provisions, they must first be amended, which will generally require a notarial deed.

How Can the Share Capital of a Polish sp. z o.o. Be Increased?

The share capital may be increased in two ways:

• by creating new shares;
• by increasing the nominal value of the existing shares.

If the share capital is increased without amending the articles of association by creating new shares, those shares may be taken up only by the existing shareholders in proportion to the shares they already hold. This means that a new investor cannot join the company under this procedure.

If a new shareholder is to join the company, the increase will generally need to be carried out by amending the articles of association and following the relevant legal requirements.

What Does the Procedure for Increasing the Share Capital of a Polish sp. z o.o. Involve?

To increase the share capital without amending the articles of association, the following steps are required:

1. Adopt a shareholders’ resolution on the increase in the share capital.
2. Decide whether new shares will be created or the nominal value of the existing shares will be increased.
3. Make the cash or in-kind contributions before submitting the registration documents.
4. File an application with the KRS together with the required documents.

The resolution should specify the new amount of the share capital, the method of increase, the number and nominal value of the new shares or the increase in the value of the existing shares, as well as the amount of the contributions and the manner in which they are to be made.

If the company was incorporated using the standard articles available in the S24 system, its share capital may be increased in one of two ways: electronically through the S24 system or by means of a notarial deed. When the capital is increased through S24, only cash contributions are permitted and the application must be filed with the KRS within seven days of adopting the resolution. Please note that if the articles of association have been amended by notarial deed at least once and no longer correspond to the standard form, the S24 system can generally no longer be used.

Which Documents Must Be Filed with the KRS?

Depending on the company’s circumstances and the chosen method of increasing the share capital, the following documents are generally required to register the change:

• the shareholders’ resolution on the increase in the share capital;
• the shareholders’ declarations on taking up the shares;
• a statement by all members of the management board confirming that the contributions towards the increased share capital have been made in full;
• an updated list of shareholders;
• an application to register the change with the KRS;
• any other documents required for the particular procedure.

The application to the KRS must be filed by the company’s management board. It is submitted electronically through the Polish Court Registers Portal or, if the relevant conditions are met, through the S24 system. A lawyer may also be authorised to file the documents with the registry court on behalf of the management board.

The share capital increase must be submitted for registration within six months of the date on which the relevant shareholders’ resolution was adopted, or within seven days of a resolution adopted through the S24 system. If the applicable deadline is missed, the registry court may refuse to register the change.

The increase in the share capital becomes effective only upon registration with the KRS.

Is an Increase in Share Capital Subject to Tax?

An increase in share capital in Poland is generally subject to the tax on civil law transactions (PCC). The standard rate is 0.5% of the amount by which the share capital is increased, less certain costs connected with the procedure.

If the resolution on the increase in share capital is executed in the form of a notarial deed, the notary calculates and collects the PCC. In that case, the company does not need to file a PCC-3 return and pays the tax directly to the notary. If the share capital is increased without amending the articles of association and without a notary, the company must file the PCC-3 return and pay the tax within 14 days from the date on which the tax liability arises. The applicable tax base, deadline and any available exemptions should nevertheless be verified in light of the circumstances of the particular transaction.

Why Is It Worth Consulting a Lawyer?

Although increasing the share capital without amending the articles of association is simpler than amending them, even minor errors in the documents may result in the KRS refusing to register the change.

If you are planning to:

• increase the share capital of a Polish sp. z o.o.;
• amend the company’s articles of association;
• admit a new shareholder;
• or establish a limited liability company in Poland,

it is worth ensuring that all documents are prepared correctly.

Need Assistance?

We can prepare the shareholders’ resolutions and other required documents and file the application with the KRS. We will help you increase the share capital of a Polish sp. z o.o. efficiently and ensure that the procedure proceeds without unnecessary obstacles. We can also review the company’s articles of association, select the appropriate method of increasing the share capital and determine whether the involvement of a notary is required.