Błażej Sarzalski

attorney-at-law

Attorney, registered in the Regional Bar in Katowice, CEO at Sarzalski Consulting Sp. z o.o., an expert in a field of formation of commercial companies, corporate law, promissory notes and litigation.
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Recurring benefits in kind

Błażej Sarzalski27 March 2023Komentarze (4)

What are recurring benefits in kind in a limited liability company?

Recurring benefits in kind in a limited liability company is an institution described in art. 176 of the Code of Commercial Companies. It consists in the fact that pursuant to the articles of association of the Polish limited liability company part or all of the shareholder’s shares in the limited liability company is encumbered with the obligation of the partner to perform various services for or in the interest of the company. These benefits cannot be of a monetary nature. In human terms: it’s about different kinds of “works” or deliveries. These benefits are to be repetitive. In small companies, based on the partners’ own work, it will most often be their additional personal contribution, consisting in repetitive performance of certain activities for the company.

What is the purpose of recurring non-cash benefits in a limited liability company?

The purpose of the provision of Art. 176 of the Commercial Companies Code is to protect the interests of the company in the event of imposing additional obligations on the shareholders other than making contributions and establishing permanent economic links between the company and the shareholders, on the one hand, to ensure that the company obtains on favorable terms raw materials, goods or services necessary for the company’s operation, on the other on the other hand, to provide partners with a relatively constant demand for their own products or services. Historically, the idea of ​​recurring non-cash benefits originated in Germany, and the prototype for Art. 176 of the Code of Commercial Companies was §55 Aktiengesetz (Law on joint-stock companies), the purpose of which was to meet the economic needs of a joint-stock sugar company.

Recurring non-cash benefits and ZUS

Recurring non-cash benefits in the context of ZUS are not an entitlement to cover the partner with ZUS contributions and NFZ contributions. They do not appear in the act on the social insurance system as an entitlement to contributions. So I am not surprised that they became in 2022 and are still the most popular way of not paying NFZ and ZUS in a limited liability company.

How should recurring non-cash benefits in a limited liability company be formulated?

As stipulated in Art. 176 of the Commercial Companies Code, if a partner is to be obliged to make recurring non-cash benefits, the articles of association should indicate the type and scope of such benefits. Recurring non-cash benefits (Polish: powtarzające się świadczenia niepieniężne) can therefore be introduced only in the notarial articles of association. As for the type, it is the subject of the benefit, an indication of what the partner’s benefit will consist of. The scope is an indication, first of all, of the size and period in which the benefit is to be provided. If the performance is to be “repeated”, it is necessary to at least indicate this repetition. If the company deed does not specify the performance period, the obligations of the partner are indefinite and expire at the latest upon completion of liquidation and deletion of the company from the register of entrepreneurs. As for the scope, I usually indicate in the articles of association the maximum weekly/monthly range counted in hours, while indicating that the details will be clarified in the agreement between the company and the shareholder or the resolution of the shareholders. No registry court has ever challenged such provisions as invalid or ineffective. Some indicate that a given benefit will also be provided a certain number of times a week, month or year.

What is PESEL numer?

PESEL (Polish: Powszechny Elektroniczny System Ewidencji Ludności, Universal Electronic System for Registration of the Population) is the national identification number in Poland. It consists of 11 digits that are unique for every registered person.

Why do I need PESEL for Polish company management?

Since end of 2019 every Polish company needs to register itself in a new registry called Central Registry for Benefitiary Owners. If your company fails to meet this obligation it may be fined. In order to make registry entry you will be required to apply by electronic means using e-signature. The most popular e-signature in Poland: EPUAP (electronic trusted profile) is free of charge, but in order to get it, you will need PESEL number.

Electronic profile EPUAP will be also useful to sign financial statements and make amendments in National Court Registry.

How to get PESEL?

If you are foreigner living in Poland, you can register your residence – in such a situation, you will automatically obtain a PESEL Number. If you cannot register your residence, and any agency requires a PESEL Number from you – submit an application by yourself or by using attorney services.

The procedure is described on a Gov site.

With our help you will be able to do it remotely.

Just contact me.

If you ask yourself where to set up your business in Poland I have some good choices for you. Just check.

Warsaw (Warszawa)

Warsaw, the capital of Poland is also a capital of Polish business. With its 1,7 million inhabitants it is the largest city in Poland and well renown business center of Eastern Europe. You will find here well estabilished middle class with enough money to buy your strangest ideas. Warsaw produces 12% of Poland’s national income In 2012 the Economist Intelligence Unit ranked Warsaw as the 32nd most liveable city in the world. It was also ranked as one of the most liveable cities in Central Europe. If you run your business on a massive scale then this is city should be your first choice. Warsaw is easy accessible by air (two international airports), train (direct trains from Berlin/Vienna) and roads (A2 highway from Poznań and Berlin, A1 highway from Gdansk, S8 road from Katowice, Wrocław).

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Katowice

Katowice, the largest city in Silesia district is a center of 4 million people conurbation. During communist times it was important center of coal mining industry, the city is still characterized by its working class strength and attracts many people from neighbouring cities. As for now Katowice is trying to choose its new path as vivid cultural center, a place where you can go to a museum, gallery or theater but also enjoy nightlife and outdoor activities. Upper Silesia has the best road system in Poland, it is also very well connected with other major Polish cities and neighbouring countries with Katowice Airport being constantly modernised in order to meet the highest standards with the longest runway in Poland up to date. It has also very unusual sight in its city center for this place in Europe: date palms around the main market. Best place for logistic centers and heavy industry.  The unemployment rate is one of the lowest in Poland, at 2%. The city is still characterized by its working class strength and attracts many people from neighbouring cities.

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Cracow (Kraków)

Kraków, former Polish capital, placed 60 km east of Katowice is thriving multicultural city famous for its medieval architecture, thousand of restaurants, bars and shops and Jewish Culture Festival that has its place here every summer. You will find monumental churches, old synagogues and even one small mosque. Place worth to choose for all enterprises connected with science, computers, tourism, music, culture or food. It is also well communicated with neighbouring major cities and has international airport. ily. There are about 50 large multinational companies in the city, including Google, IBM, Royal Dutch Shell along with other British, German and Scandinavian-based firms.

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Poznań

When I first came to Poznań, during my studies I was amazed by the atmosphere of the city. Today Poznań is a mixture of its rich history and modern solutions, easily accessible from air nad ground it is a good base for all businesses wishing to commence trade with Germany.  Poznań had very low unemployment rate (about 2-3%). Many Western European companies have established their Polish headquarters in Poznań or in the nearby towns of Tarnowo Podgórne and Swarzędz. Most foreign investors are German and Dutch companies.

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Breslau (Wrocław)

Old German city of Wrocław have not lost its character under Polish rule. Another place where history meets modern era. Center of science and culture. It is also statistically the warmest major city in Poland. Wrocław’s industry manufactures buses, trams, railroad cars, home appliances, chemicals, and electronics. The city houses factories and development centers of many foreign and domestic corporations. It is major center of pharmaceutical industry.

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Tricity (Trójmiasto)

A metropolitan area in northern Poland consisting of three cities in Pomerania: Gdańsk, Gdynia and Sopot, as well as minor towns nearby them. They are situated adjacent to one other, in a row on the coast of  Baltic Sea. Nearly 35% taxpayers from Tricity are in the middle and high taxable income groups (average for Poland 10%). Approximately 12% of Tricity taxpayers are in highest taxable income group (Polish average 3%). Center of tourism and ship industry.

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There are many reasons to use a Limited Liability Company (LLC)  in Poland for your startup, and here are five of the best:

  1. Flat corporate tax rate. Altough Polish often complain on level of taxation in our country the fact is that effective corporate tax rate is below European and even world average. We have 19% flat corporate income tax (CIT) in Poland, whilst the effective taxation equals something about 17,5% (scientific source is here). Foreign corporations often use effective tax planning strategies to optimise taxes or transfer some of their profits abroad.
  2. 38,5 million people. Poland is one of the biggest markets in Europe. It is sixth biggest EU country by population and seventh in terms of territory. You will have plenty of customers, for sure!
  3. Stable economic growth. Even in times of world financial crisis Poland maintainted its stable economic growth which is one of the biggest in European Union (source is here).
  4. Membership in European Union. You will have access to whole Eurpean market as Poland is part of European Union and Polish companies enjoy freedom of trade and enterprise in whole EU. You will not have to pay any customs for sales to the other member states.
  5. Friendly and well educated people. If you come to Poland you will experience friendliness of Polish people and you will discover that many of them (about 34%)  are able to hold conversation in English (okey, it is not the Netherlands where almost whole population speaks English, but still better than Slovakia – 26%, Czech Republic – 27%,  Bulgaria – 25% or Spain – 22%) – not bad for former Soviet block country. Source is here.