What are the implications of not applying for the entry of a limited liability company into the National Court Register in due time?

This article answers the following questions:

• When is a limited liability company in organisation created and does it have legal personality? 
• Who, when and how is obliged to apply for the entry of a limited liability company into the National Court Register?
• Can the time limit for applying for the entry of a limited liability company into the National Court Register be extended? 
• What are the implications of failure to observe the six-month time limit for applying for the entry of a limited liability company into the National Court Register?
• What is the difference between termination of articles of association and dissolution of a limited liability company?
• Is it always obligatory to liquidate a limited liability company in organisation which was not applied for the entry into the National Court Register in due time?
• When is liquidation of a limited liability company in organisation completed?

A limited liability company in organisation comes into being at the moment of adoption of its articles of association. This distinctive legal entity can operate (subject to certain limitations) "right away", i.e. prior to applying for entry of the company into the register of entrepreneurs of the National Court Register (Polish: Krajowy Rejestr Sądowy, KRS). However, the application must be made not later than within six months from the adoption of the articles of association. Even though it seems to be plenty of time, it is quite possible to miss the deadline to fulfil that obligation in the initial and intensive stage of business operation. This article explains the implications of failure to observe the said time limit for shareholders in a limited liability company.

What is meant by a limited liability company in organisation?

Setting up a limited liability company in Poland consists of many stages and may be lengthy due to the necessity to provide the authorities with a fair number of documents and amount of data.

To make it quicker for entrepreneurs to launch operations, it is stipulated in statutory provisions that at the moment of adoption of articles of association, a limited liability company in organisation comes into existence, which may carry on business even before being entered into KRS¹, and has corporate capacity, which gives the company the right to perform transactions and act in courts and before authorities in its own name.

A limited liability company in organisation is conferred legal personality at the moment of its registration in KRS. It then becomes a proper limited liability company, which gains legal personality and assumes the rights and obligations of the company in organisation².

Application for the entry of a limited liability company into KRS – who, when and how?

The corporate body responsible for applying for the entry of a limited liability company into KRS to the registration court having jurisdiction over the registered office of the company is its management board.

In the event of adoption of "traditional" articles of association – i.e. in the form of a notarial deed made before a notary – the management board of the company is obliged to apply for the registration of the entity into KRS within six months from the adoption of the articles of association (counting from the adoption of the original notarial document, not the last amendment)³. This time limit is calculated according to the civil law rules. Therefore, it expires on the day which corresponds (with its name or date) to the first day of the time limit (if a month does not have such a day, the time limit expires on the last day of the month). 

Importantly, the time limit for applying for the entry of the company into KRS arises from a mandatory provision, therefore, it cannot be modified in any way, e.g. under a shareholders' decision or court order⁴. To comply with the six-month time limit, it is sufficient to submit an application for the entry of the limited company into the National Court Register (KRS) via a dedicated Court Registers Portal (Polish: Portal Rejestrów Sądowych, PRS). 

A step-by-step description of setting up a limited liability company (and of additional obligations to be fulfilled after its incorporation) is presented in our article "How to set up a limited liability company? Incorporating a company and launching operations in practice".

Importantly, the provisions stipulate that the obligation is fulfilled at the moment the application to the court is submitted. The registration court may examine the application after the said 6-month time limit has expired.

The implications of exceeding the six-month time limit for the entry of the company into KRS: Termination of the articles of association and dissolution of the company

Failure to apply for the entry of a limited liability company into the National Court Register within six months from adoption of articles of association terminates the articles of association by operation of law. 

Termination of the articles of association is not equivalent to dissolution of the company (which occurs after the actions specified below are performed⁵).

Dissolution of a limited liability company in organisation whose articles of association have been terminated may be effected under one of the following procedures^6,7:

1. a simplified procedure, without liquidation – which may be applied if the company is able to immediately return all the contributions to the shareholders and fully satisfy third-party claims. In such a scenario, the shareholders have to undertake relevant activities themselves: first they must satisfy any third-party claims, then return the contributions⁸ and distribute other assets, if any; or
2. a complete procedure, with liquidation carried out by the management board or, in the absence of a management board, a liquidator or liquidators (appointed by the general meeting or the registration court) – if the company is not able to immediately return all the contributions to the shareholders or fully satisfy third-party claims. 

In the latter case, the regulations on company liquidation apply to the liquidation of a limited liability company in organisation. The management board (liquidator) makes a single announcement about the opening of the liquidation, calling creditors to file their claims within one month from the publication of the announcement. The company then goes through the liquidation process executed by the management board (liquidator), the purpose of which is to wind up the current affairs of the company.

During the liquidation of a limited liability company in organisation, the inscription "w likwidacji" (in liquidation) is added to its name⁹.

The subject-matter jurisdiction over registration matters related to the liquidation of a company in organisation is vested in the registration court. Territorial jurisdiction is decided on the basis of the registered office of the company¹⁰.

The dissolution of a limited liability company in organisation and the discontinuance of its legal existence is effected after a certain time, depending on the type of operations carried out¹¹:

1. if the company is not placed in liquidation (summary procedure) – at the moment of the final repayment or the decision on the satisfaction or security of claims;
2. if the company is placed in liquidation (complete procedure) – at the moment of approval of the liquidation report by the general meeting. 

Subsequently, the documents and records of the dissolved company should be put in the custody of the person designated in the articles of association or shareholders' resolution, or given to a custodian appointed by the registration court.

As you can see, failure to observe the six-month time limit for applying for the entry of a limited liability company into the National Court Register involves not only termination of the articles of association, but also the duty to undertake specific, often time-consuming activities associated with liquidation of the company. To make sure that the application to the National Court Register is submitted in due time, and the whole process goes smoothly, it is advisable to take advantage of professional support offered by RSM Poland. 

¹ Judgment of the Provincial Administrative Court in Kraków of 10 March 2016, file no. III SA/Kr 836/15, LEX no. 2014848.
² Judgment of the Provincial Administrative Court in Kraków of 10 March 2016, file no. III SA/Kr 836/15, LEX no. 2014848.
³ J. Sarkowicz, BD12. Procedura rejestracyjna spółki z ograniczoną odpowiedzialnością, której umowa spółki została zawarta w formie aktu notarialnego, Legalis.
⁴ Z. Jara (ed.), Kodeks spółek handlowych. Komentarz. 5th edition, Warszawa 2024.
⁵ A. Kidyba [in:] M. Dumkiewicz, A. Kidyba, Komentarz aktualizowany do art. 1-300 Kodeksu spółek handlowych, LEX/el. 2024, Article 170.
⁶ Z. Jara (ed.), Kodeks spółek handlowych. Komentarz. 5th edition, Warszawa 2024.
⁷ Z. Jara (ed.), Kodeks spółek handlowych. Komentarz. 5th edition, Warszawa 2024.
⁸ J. Bieniak, M. Bieniak, G. Nita-Jagielski, Kodeks spółek handlowych. Komentarz. 9th edition, Warszawa 2024.
⁹ M. Rodzynkiewicz [in:] Kodeks spółek handlowych. Komentarz. 7th edition, WKP 2018, Article 170.
¹⁰ A. Kidyba [in:] M. Dumkiewicz, A. Kidyba, Komentarz aktualizowany do art. 1-300 Kodeksu spółek handlowych, LEX/el. 2024, Article 170.
¹¹ Z. Jara (ed.), Kodeks spółek handlowych. Komentarz. 5th edition, Warszawa 2024, Judgment of the Supreme Administrative Court of 17 May 2023, file no. II GSK 582/20, LEX no. 3580005, Judgment of the Provincial Administrative Court in Kraków of 10 March 2016, file no. III SA/Kr 836/15, LEX no. 2014848.