Currently, the final incorporation of an LLC (submission of an application to the registrar) is carried out online. However, the process of collecting and submitting documents to the National Court Register (orig. Krajowy Rejestr Sądowy; “KRS”) can be carried out in two ways:
- traditionally, by visiting a Polish notary in Poland to conclude a notarized deed. Then upload the documents to the Portal of Judicial Registers (orig. Portal Rejestru Sądowego; “PRS”) and submit the application with the necessary attachments through the PRS portal to the KRS; or
- completely remotely – through the S24 portal operated by the Ministry of Justice of Poland. Once the documents are completed on the S24 portal, they are automatically sent to the KRS.
Understanding the share capital and its structure
The share capital is a key element of the financial stability of any company and performs several important functions. It is the basis for the initial financing of the company’s activities, serves as a guarantee for creditors and ensures the trust of partners. According to Polish law, the following types of capital are defined:
- Share capital (orig. kapitał zakładowy) – is the main component of the company’s equity capital and is a guarantee for the company’s creditors. This is the amount that the founders of the company deposit into its initial account to cover expenses that may arise in the course of its activities. The amount of share capital is determined by the type of company and its legal requirements in KSH.
- Additional (reserve) capital (orig. kapitał zapasowy) – a reserve fund created to cover losses – is not required for LLCs (chapters 1-3, 5 KSH).
- Other reserve capitals (orig. kapitały rezerwowe) – the articles of association may provide for the establishment of other capitals to cover special losses or expenses (reserve capitals) (Article 396(4) of the KSH).
Shareholders’ equity is recorded in the books of accounts in accordance with the requirements of the law and the articles of association (Article 36(1), (2) of the Accounting Act).
Minimum capital requirements under MiCA
In accordance with Annex IV to Regulation (EU) 2023/1114 on the market in cryptoassets (“MiCA”), minimum capital requirements for cryptoasset service providers (“CASPs”) are established:
- Class 1: EUR 50,000.
- Class 2: EUR 125,000.
- Class 3: EUR 150,000.
Polish law does not currently have any additional capital provisions for cryptocurrency companies, so they are required to comply with the MiCA regulations.
When contributing capital to an LLC in Poland, monetary contributions must be made in the national currency, Polish zloty (“PLN”). If the contributions are made in foreign currency, they must be converted into PLN in accordance with the provisions of the Accounting Act.
Requirements for the share capital of an LLC in Poland
A limited liability company can be established by one or more persons, but it is important to note that it cannot be established by another sole proprietorship.
Pursuant to Article 152(1) of the KSH, the share capital of the company is divided into shares of equal or unequal nominal value. The charter must also specify whether a shareholder may hold only one share or more. If a shareholder can have several shares, all shares in the share capital are equal and indivisible (Article 153 of the KSH).
The law sets the minimum amount of the share capital at PLN 5,000 (approx. EUR 1,200), and the minimum nominal value of a share must be at least PLN 50. Shares may not be subscribed for at a price lower than their nominal value. If a share is purchased at a price higher than its nominal value, the excess is transferred to additional paid-in capital.
Sources and procedure for forming the share capital (formation of the share capital with cryptocurrency)
According to Polish law, the share capital of companies may be formed both by monetary contributions and non-monetary contributions. Non-monetary contributions may include property rights, property rights, and other assets that have a definite property value.
Although the share capital may be covered by both monetary and non-monetary contributions (contributions in kind), if the company is established through the S-24 system, only monetary contributions may be made to cover the share capital (Article 158 § 1-1 KSH).
If the contribution to the company to cover the value of shares is fully or partially in-kind, the articles of association must specify in detail the subject of the contribution and the identity of the contributor, as well as the number and nominal value of the shares to be accepted in exchange for it (Article 158 § 1 KSH).
An increase in the share capital made after an entry is made in the register of a company whose articles of association were concluded on the basis of a model agreement (via the S-24 system) may be covered only by monetary contributions if the change in the articles of association was made on the basis of a model decision to amend the articles of association of a limited liability company, and if the change in the articles of association was made in the form of a notarial deed, then also by non-monetary contributions (Article 158 § 1-2 KSH).
Taking into account the definition of virtual currency (orig. walucie wirtualnej) provided in paragraph 26, part 1, Article 2 of the Polish Act on Counteraction to Legalization of the Proceeds of Crime and Terrorist Financing (orig. Ustawa z dnia 1 marca 2018 r. o przeciwdziałaniu praniu pieniędzy oraz finansowaniu terroryzmu), the latter is not an official means of payment of the state currency system of Poland. Therefore, cryptocurrency cannot be used as a monetary contribution to form the share capital.
However, this does not exclude the possibility of using cryptocurrency as a non-monetary contribution. Virtual currency can be used as a tool for measuring value, for example, when exchanging cryptocurrency for zlotys, euros or dollars, and in this context can be accepted for the formation of charter capital in the form of a non-monetary contribution.
This statement is in line with the Decision of the Voivodeship Administrative Court in Warsaw dated June 13, 2018 (registration number III SA/Wa 2597/17) (orig. Wyrok WSA w Warszawie z 13 czerwca 2018 roku):
“A monetary contribution is a specified amount of money deposited in cash or in the form of a bank or postal order. Contributions must be made in Polish currency (just as non-cash contributions are converted into Polish currency).
Monetary contributions are made by depositing money into the company’s bank account or cash desk. The partner transfers the appropriate amount of currency to the company and gives it to the company for possession.
A non-monetary contribution, i.e. a contribution in kind, is, in turn, a right that has a specific property value, is real, can be separated from the partner’s assets and can be transferred to the company to cover the value of the partner’s shares, which, together with the contributions of other persons, will form the share capital.
The following criteria for contribution capacity should be noted: the ability to determine the property value of the right, the ability to value it and put it on the balance sheet (balance sheet capacity), the transferability of the right, the ability to establish the right, and the ability to seek enforcement. This latter element has become one of the most important, primarily due to the factors specified in part 1 of Article 4 of the KSH, which provides for negative criteria for recognizing a contribution in kind.
According to this provision, the following cannot be considered non-monetary contributions: inalienable rights, provision of works or services.
We can assume that non-monetary contributions to a company may include property rights, obligatory rights and ownership rights to intangible assets.
Property rights include: ownership of an enterprise, but it is not permissible for a cooperative to make an non-monetary contribution to a limited liability company in the form of its enterprise (Article 55 of the Civil Code) if this excludes the cooperative from carrying out its statutory business activities) or its organized part, ownership of movable property, ownership of immovable property, a share in partial or joint partial ownership, and perpetual use.
Among the bond rights are: shares, bonds, shareholders’ receivables, in particular, it is possible to convert shareholders’ receivables under a loan granted to a capital company in case it is declared bankrupt within 2 years from the date of the loan agreement (Article 14(3) of the KSH).”
In addition, from the analysis of the KSH provisions, it becomes clear that the share capital may be covered by both monetary contributions and non-monetary contributions.”
Cryptocurrencies cannot be used as a monetary contribution to form the share capital in accordance with Polish law.
Cryptocurrencies may be accepted as non-monetary contributions provided that their value is accurately determined in Polish zlotys, which, given their volatility, requires careful assessment.
For non-monetary contributions, property rights that have a definite value and can be transferred to the company, such as ownership of property or assets, may be used.
Polish law does not impose any restrictions (there is no explicit prohibition or authorization in the law) on the use of cryptocurrency as a non-monetary contribution. However, this requires a mandatory audit, and in such a case, it is necessary to ensure its accurate valuation in Polish zlotys at the time of the contribution. Determining the value of cryptocurrency requires the involvement of independent experts, as its price is unstable. Despite the possibility of contributing to cryptocurrency as a non-monetary asset, companies operating in the field of crypto assets should take into account regulatory risks and possible changes in legislation.
Prudential guarantees and minimum equity capital requirements
Prudential guarantees are important mechanisms designed to protect the financial stability and assets of clients. They may take the form of their own funds, insurance policies, or a combination of the two and are aimed at minimizing financial and operational risks.
According to Article 67(1) and (2) of the MiSA, CASPs must always have prudential guarantees equal to at least the higher of the following amounts:
- the sum of the standing minimum capital requirements set out in Annex IV, depending on the type of services provided using crypto assets;
- one quarter of the previous year’s fixed overhead costs, reviewed annually.
For companies that have not been in operation for a year since the start of service provision, it is necessary to use the projected overhead costs for the first year of their operation, which are provided with the application for authorization.
The calculation of fixed overhead costs is based on the provisions of Article 67(3) of the MCA.
As stated in Article 67(4) of the MiSA, prudential guarantees referred to in Article 67(1) of the MiSA may take any of the following forms or a combination thereof:
- own funds, consisting of the items and instruments of the first tier of common equity referred to in Articles 26 to 30 of Regulation (EU) № 575/2013 (“Prudential Requirements Regulation”), after full deductions in accordance with Article 36 of this Regulation, without applying the threshold exceptions in accordance with Articles 46 and 48 of this Regulation (note: this refers to Tier 1);
- an insurance policy covering the territories of the Union in which cryptoasset services are provided, or a similar guarantee.
1.1. Own funds (capital)
According to Article 26(1) of the MiSA Prudential Requirements Regulation, the elements of Tier 1 capital include:
- Capital instruments that meet the conditions specified in Articles 28 or 29 of the MiSA on Prudential Requirements;
- Share premium accounts related to capital instruments.
- Retained earnings;
- Accumulated other comprehensive income;
- Other reserves;
- Funds for general banking risk.
The elements referred to in paragraphs (C) through (F) are recognized as Tier 1 common equity only if they are available to the institution for unrestricted and immediate use to meet risks or losses as they arise.
In order to include interim or annual profits in Tier 1 core capital, prior authorization must be obtained from the competent authority, after the profits have been audited and all expenses or dividends have been deducted from the profits.
The competent authority will grant such permission if the following conditions are met:
- The profit has been audited by independent persons responsible for auditing the institution’s financial statements.
- The institution has demonstrated to the competent authority that any deemed expenses or dividends have been deducted from the profit.
The review of the institution’s interim or annual profit should provide an appropriate level of assurance that this profit has been measured in accordance with the principles set out in the applicable accounting framework.
It should be noted that Tier 1 must be consistently higher than the minimum threshold set forth in Articles 1 and 2 of Section 67 of the MiCA. Otherwise, it leads to a violation of prudential requirements.
1.2. Insurance policy
The requirements for an insurance policy to maintain prudential guarantees are set out in Article 67(5) and (6) of the MiCA. Such a policy must cover the risks associated with:
- Loss of documents;
- Distortions or misleading statements;
- Acts, errors or omissions that result in a breach:
- legal and regulatory obligations;
- obligations to act with honesty, integrity and professionalism towards clients;
- confidentiality obligations;
- Failure to establish, implement and maintain appropriate procedures to prevent conflicts of interest;
- Losses arising from operational or systemic failures;
- If it is related to the business model, gross negligence in the protection of crypto assets and client funds;
- CASP’s liability to clients in accordance with Art. 75(8) MiCA.
In order to ensure stability and protect the interests of clients, CASPs must constantly comply with prudential safeguards by maintaining a minimum amount of equity capital. Own funds (Tier 1) must be sufficient to cover potential risks and be available for immediate use. Taking into account the requirements for insurance coverage, policies should cover a wide range of risks, which provides protection for both the company and its customers.
The issue of inviolability of the share capital cannot be ignored. At least as conceived by the Polish legislator, the share capital should be a security for the company’s creditors, who, in the event of problems with the company’s solvency, could satisfy their claims at the expense of the share capital. Therefore, the share capital should be qualified as untouchable. A company should always have a minimum share capital in the amount specified in the company’s charter.
Where to form the share capital?
Formation of a company’s share capital is a mandatory procedure before registering a company in Poland. The funds or other assets used for this purpose must be properly documented and verified. The most common option is to deposit the capital into a company bank account, which ensures transparency of financial flows and compliance with regulatory requirements.
As a rule, an account for depositing share capital is opened in a bank registered in Poland. This ensures compliance with local financial control requirements and simplifies further management of the company’s funds. Using a Polish bank also facilitates interaction with state institutions, such as the National Court Register, tax authorities and other regulators. Most banks require that the founders of the company open an account in person, but some institutions provide the possibility of remote opening, especially for non-residents.
Although the legislation does not contain direct restrictions on the possibility of using bank accounts in other EU countries, in practice this may create additional difficulties. Polish regulators may require additional documents confirming the origin of funds and their compliance with Polish law. In addition, the use of a foreign bank account may complicate interaction with tax authorities and may require additional currency control.
In addition to banking institutions, the use of accounts with financial technology companies and electronic money institutions (“EMI”) has become increasingly popular in recent years. Polish law does not explicitly prohibit the formation of share capital in such institutions, however, their legal status with respect to share capital remains somewhat uncertain. In case of capital contribution through EMI, the company should make sure that the funds can be properly confirmed and are available for use in accordance with the law.
Thus, the best option for most companies is to deposit the share capital through a bank account in Poland. This minimizes regulatory risks, simplifies tax accounting and ensures compliance with legal requirements. The use of alternative financial institutions may be possible, but requires a thorough analysis of the legal implications and possible complications in interaction with government agencies.
However, the formation of share capital in a credit institution is not prohibited in the EU.
Conclusions
Formation of the share capital in Poland is an important process that determines the financial basis of the company. Contributions can be made both in cash and in kind, but registration through the S24 system only allows monetary contributions. Cryptocurrency can be used as an in-kind contribution, but its valuation requires an independent audit and documentation of the value.
For crypto asset service providers operating within the EU, it is necessary to ensure compliance with the MiCA’s minimum capital and prudential safeguards. Meeting these requirements is critical to the financial stability of companies. Opening a bank account with a traditional Polish bank is the best practice to avoid potential regulatory issues.
This is our opinion based solely on the provisions of Polish law. However, the Law on the Crypto Asset Market has not yet been adopted in Poland. It is possible that after the adoption of the Law, recommendations and clarifications from the regulator will appear.
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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.
