A conversion is the quietest corporate change Polish law offers. Nothing merges, nothing is split off, no asset changes hands. The company stays where it is - same contracts, same employees, same bank accounts - and changes only the label on the door. The real question is whether the new label is worth the trouble.

Why convert a sp. z o.o. into an S.A.?

A listing sometimes comes up, but on its own, in my view, it rarely convinces: the Warsaw Stock Exchange is not the busiest market in Europe, and a company can be converted later.

More often the driver is capital: in a sp. z o.o. almost every change of share capital means amending the articles of association. If flexibility is what you are after - for example to give shares to managers - I usually recommend a simple joint-stock company (prosta spółka akcyjna, PSA) instead. It has the capital flexibility of a joint-stock company without the mandatory supervisory board and audit (see which vehicle for your Polish operations). The S.A. is the right target when a listing, an investor or a regulated activity requires it.

What does the S.A. add to the process?

Under the Commercial Companies Code (Kodeks spółek handlowych, ‘KSH’), the converted company keeps all its rights, obligations and, unless a statute or the permit says otherwise, permits (Art. 553 KSH). In plain terms: there is nothing to transfer. What an S.A. target adds, on top of the general rules and Art. 577–580 KSH, is four things.

  1. A statutory auditor. The plan must be examined by a statutory auditor (biegły rewident) appointed by the registry court on the company’s application, for correctness and reliability, including the valuation, within a deadline of no more than two months (Art. 559 KSH). A conversion into a sp. z o.o. needs no auditor.

  2. A valuation of assets and liabilities, attached to the plan (Art. 558 § 2 item 3 KSH). No external appraiser is required: I base it on the net asset value from the company’s books, remembering that the S.A.’s share capital must be covered by the company’s actual assets.

  3. A supervisory board of at least three members (Art. 381 and 385 § 1 KSH). If the sp. z o.o. has none, the conversion resolution appoints it.

  4. Share capital of at least PLN 100,000 (Art. 308 § 1 KSH), and not lower than the sp. z o.o.’s (Art. 577 § 1 item 4 KSH). Group subsidiaries often have low capital, sometimes the PLN 5,000 minimum. No separate increase is needed: I set PLN 100,000 in the conversion resolution, against the value of the company. The difference is moved into share capital from supplementary or reserve capital, and the net assets must cover it. Check the tax side first (see below).

For precision: nobody contributes anything, so the S.A.’s in-kind contribution examination (Art. 311–312 KSH) does not apply.

Plan, auditor, notices, resolution, registration - in that order

The plan. The statute gives it to the management board (Art. 557 § 1 KSH); in practice I prepare the plan and its attachments, and the board signs. In a single-member company - the usual case in a group - the plan must be a notarial deed (Art. 557 § 3 KSH). It has four attachments: the draft resolution, the draft articles of association (statut) of the S.A., the valuation and a financial statement prepared for the conversion (Art. 558 KSH). From its signing I take over the remaining steps under a power of attorney.

The auditor. The Code sets no deadline for the appointment, so this is the variable. Agree the work beforehand with an auditor you know and file the application with their consent and terms; the court is not bound by the proposal but usually follows it.

The notices. The shareholders are notified twice: no later than one month before the vote, and again at least two weeks after the first notice. Each notice must summarise the plan and the auditor’s opinion (Art. 560 KSH) - so this clock starts only once the opinion is in. The documents stay open to the shareholders for the last two weeks before the vote.

With a sole shareholder, when the timetable allows, I run both notices, because that is what the Code says. When it does not, I take a written statement from the shareholder waiving them, as in other processes of this kind.

For precision: the KSH has no express waiver; it rests on the notices protecting the very shareholder who gives them up.

The resolution. The shareholders’ meeting (zgromadzenie wspólników) passes it by three-quarters of the votes, and the votes in favour must represent at least half the share capital, unless the articles set a stricter bar (Art. 577 § 1 item 1 KSH). The company needs approved financial statements for the last two financial years (Art. 577 § 1 item 2 KSH). The resolution goes into minutes drawn up by a notary (Art. 562 § 2 KSH) and replaces the founding of the S.A. and the appointment of its bodies (Art. 563 § 2 KSH): one sitting adopts the articles, sets the capital and appoints both boards.

Registration. All members of the S.A.’s management board file with the National Court Register (Krajowy Rejestr Sądowy, ‘KRS’) (Art. 569 § 1 KSH). The conversion takes effect on the day of the entry, when the court also deletes the sp. z o.o. (Art. 552 KSH). The company gets a new KRS number and keeps its tax ID (NIP).

Can a shareholder say no and leave?

No. The buyout right in Art. 576¹ KSH applies only to a conversion into a partnership (a cross-border conversion has its own, Art. 580¹¹ KSH). If a shareholder is likely to object, that conversation belongs before the plan.

Which rights do not survive?

A shareholder’s rights and obligations that are incompatible with the rules on the S.A. expire on the conversion date; for a right granted to a particular shareholder, that shareholder can claim appropriate compensation within a year (Art. 579 § 1–2 KSH). A sp. z o.o. allows up to three votes per share, an S.A. only two; each shareholder’s individual right to inspect the books disappears.

For a group, the one that matters is money. An S.A. has no equivalent of additional contributions (dopłaty), so a clause in the articles obliging the parent to make additional contributions expires, and later funding goes through capital or a loan. If the parent has paid in contributions it expects back, I have the shareholders resolve to repay them before the conversion (Art. 228(5) KSH): the resolution creates the company’s debt to the shareholder, and the debt passes to the S.A. with everything else. Remember that it also reduces the net assets that must cover the S.A.’s capital.

And the way back? S.A. to sp. z o.o.

The same procedure without the S.A. extras: no auditor, no valuation and, in a typical group subsidiary, no supervisory board (Art. 213 KSH). One condition applies only in this direction: the S.A.’s share capital must be fully paid up (Art. 577 § 1 item 3 KSH). The tax on undistributed profits that catches a conversion into a partnership (Art. 7b(1)(1)(j) of the Corporate Income Tax Act, ‘CIT Act’) does not apply here.

Does the conversion trigger tax?

I am an advocate, not a tax adviser; these are signposts to raise with your Polish tax adviser.

The S.A. steps into all the tax rights and obligations of the sp. z o.o. (Art. 93a § 1 item 1 of the Tax Ordinance - Ordynacja podatkowa). A conversion of one company into another is outside the tax on civil-law transactions (podatek od czynności cywilnoprawnych, ‘PCC’) (Art. 2(6)(b) of the PCC Act). In my view that covers a capital set at PLN 100,000 in the conversion resolution as well: the company’s assets do not grow.

The point to check is the shareholder’s side. Profit or other capitals moved into share capital count as the shareholder’s income from a share in profits (Art. 7b(1)(1)(f) of the CIT Act). The Act does not say whether that reaches a capital set in a conversion resolution. For a foreign parent that means withholding tax and the dividend exemption, with the company as payer; if the uplift comes from retained profit, consider an individual tax ruling.

What this means for you

A conversion is simpler than a merger, but the S.A. brings formality a sp. z o.o. never needed: a supervisory board, an annual audit, a notary at every general meeting resolution (Art. 421 § 1 KSH) and an electronic share register. Decide whether you want that governance before you sign the plan.

Watch out

  • The shareholder register. An S.A.’s shares are recorded in a shareholder register (rejestr akcjonariuszy) kept by a licensed entity, typically a brokerage house (Art. 328¹ KSH), and only a person entered there counts as a shareholder for the company (Art. 343 § 1 KSH). Pick the house before the resolution and read its terms: the KSH asks for no more than an ordinary written agreement to transfer shares, but keepers often demand notarised signatures or a notarial deed, and they check the form before any entry (Art. 328⁴ § 5 KSH).

Next steps

  1. Confirm why an S.A. and not a PSA.
  2. Review the articles (voting privileges, additional contributions - repay those you want back) and check net assets against PLN 100,000, with the tax adviser.
  3. Agree the auditor and the brokerage house.
  4. Sign the plan (a notarial deed in a single-member company), apply for the auditor, then notify the shareholders or take the waiver.
  5. Pass the resolution in notarial minutes; the whole management board files with the KRS.