Obligation to make a pecuniary contribution to a limited liability company — selected issues

Abstract

Polish law unequivocally states that contributions to a limited liability company should be made before the application for registration of the company is submitted to the register of entrepreneurs, but excluding from this obligation a limited liability company established in the ICT system due to their usually very short phase of the company’s organisation. Polish law also provides for severe consequences for the management board in the event of a false declaration with regard to shareholders’ contributions. In such a situation, the management board is exposed to joint and several liability with the company to the company’s creditors for all the company’s liabilities for three years from the date of the company’s registration. This liability is not relieved by the subsequent contribution by the shareholders. In addition, the submission by the management board of an untrue statement concerning the contribution was threatened with a criminal sanction. Meanwhile, the phenomenon of making pecuniary contributions to the company’s bank account only after the registration of the company and establishment of a bank account for the registered company is widespread in trade. Due to the wording of the provisions governing contributions, the mere possibility for the management board to influence shareholders in order to use the agreed cash contributions for the needs of the company cannot be equated with making such contributions to the company until the contribution is actually made. In such a situation, it would be appropriate, on a systemic basis, to postulate the possibility of extending also to limited liability companies established in a traditional way the arrangements for making contributions similar to those provided for companies, established in the ICT system. The consistently enforced requirement to make pecuniary contributions to a limited liability company in the organisation may create an obstacle, seriously slowing down in practice the period of establishing a limited liability company, which is an undesirable factor.