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Business liquidation
in Poland
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Regulation of business suspension and liquidation in Poland
In Poland, there are legislative mechanisms for temporary suspension or final termination of companies. In light of the fact that not every business project turns out to be successful, the possibility to temporarily stop or close a company is an important tool for entrepreneurs.
Polish law defines two main methods of business termination: suspension and liquidation.
Suspension of JDG activities
Suspension of operations JDG is a process that allows a business to be temporarily terminated without the need to liquidate it. This procedure is relevant for entrepreneurs who plan to restart their firm in the future.
Liquidation of JDG's operations
Liquidation of JDG - is the process of completely ceasing operations of a business. Liquidation can be caused by a variety of reasons, including a desire to end the business or a change in the owner's plans.
- Timeline: In Poland, business activities registered as Jednoosobowa Działalność Gospodarcza (JDG) may be suspended indefinitely. Polish law does not set a minimum or maximum period for the suspension of a JDG.
- Submitting an application: The process starts by submitting an application to CEIDG. This can be done online, which greatly simplifies the process for the entrepreneur.
- Duties during the period of suspension: Despite the suspension of the business, the entrepreneur is obliged to complete all current obligations to creditors, pay taxes for the period of activity, as well as retain accounting records pertaining to your firm.
- Filing a liquidation petition: An entrepreneur submits an application to the CEIDG for the termination of the business. The application must include information on the date of liquidation of the firm.
- Closing of liabilities: It is important to settle all financial obligations to tax authorities, banks and counterparties. The entrepreneur is obliged to file an annual tax return for the last fiscal year, even if it was incomplete.
Suspension of Sp. z o.o.
According to Polish law, temporary suspension of a company's activity (for Sp. z o.o.) is not foreseen for a period longer than 24 months. After the expiry of this period, the company must either resume operations or consider liquidating the business. If activities are not resumed and no decision is made to liquidate the firm, the registration authorities may take measures for compulsory liquidation. It is also important to take into account that despite the suspension of activity, the firm remains a legal entity and must comply with all mandatory requirements established by law.
- Making a decision on suspension of business: The decision to suspend must be taken at a general meeting of the firm's members. This decision shall be recorded in the minutes of the meeting and must be approved by a majority of votes, in accordance with the articles of association. The decision must state the specific date on which the suspension of the firm's activities is to begin.
- Preparing and submitting an application to the National Court Registry (KRS): Once the decision has been made, a notice must be filed with the National Court Registry (KRS). The application must contain information on the date on which the suspension of the firm's activities began. The application must be submitted through the KRS portal or to the relevant court.
- Notification of tax and insurance authorities: Before suspending the company, it is necessary to dismiss all employees and notify the Social Insurance Office (ZUS) of the termination of employment contracts in order to stop the assessment of social contributions. The tax authorities (Urząd Skarbowy) should also be notified of the suspension of business to avoid further assessment of taxes and fees related to the company's operating activities.
- Regulation of all current liabilities: Before suspending operations, a company should settle all current liabilities, including paying taxes, paying debts and finalising contractual obligations to counterparties. It is important to close all accounts, pay debts and ensure that all transactions are correctly recorded in the accounting department.
- Safeguarding of records
During the suspension period, all company documents such as books, contracts, reports and other legal documents must be secured. Access to these documents must be guaranteed in case of possible inspections or audits.
Liquidation of a company in Poland
Liquidation of Spółka (Spółka z o.o.) in Poland - is a more complex process than the liquidation of JDG. The liquidation procedure in this case requires compliance with strict legal regulations, which often makes it necessary to engage legal assistance.
- Decision on liquidation: The resolution must be adopted at a general meeting of the firm's members and recorded in the form of a notarial deed.
- Appointment of liquidators: Liquidators are appointed to manage the liquidation process. Their tasks include finalising the day-to-day affairs of the company, settling debts and distributing the remaining assets to the members.
- Submission of the application to the court and publication in MSiG: The liquidators file an application with the court to register the commencement of the liquidation of the firm and publish an announcement in the Monitor Sądowy i Gospodarczy. This publication is necessary to notify creditors.
- Drawing up a liquidation balance sheet: Liquidators are required to prepare and submit to the court a final balance sheet that reflects the financial position of the company at the time of liquidation.
Liquidation and suspension of a business in Poland are serious steps that require careful observance of all legal formalities. The liquidation process, be it JDG or Spółka z o.o.can be complex and costly, but following all the steps correctly will ensure its successful completion.
If you need assistance in suspending or liquidating your business, contact our experts. We offer comprehensive support at all stages of the process so that you can close your firm with minimal risks and costs.
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