How to declare bankruptcy in Poland? The bankruptcy of a Polish limited liability company is quite a complicated process. The initiation of the procedure requires compliance with the formalities determined by law. Neglecting these requirements has serious consequences. What should you know about the bankruptcy of a Polish limited liability company? You will find the answer in the article below.
Table of Contents
- Bankruptcy in Poland. When to declare bankruptcy of a Polish limited liability company?
- Who files a petition for bankruptcy of a Polish limited liability company?
- What is the deadline for filing a bankruptcy petition for a limited liability company in Poland?
- Bankruptcy of a Polish limited liability company and the liability of management board members
- What should a petition for bankruptcy of a Polish LLC include?
- Bankruptcy in Poland. What are the costs of filing a bankruptcy petition for a limited liability company?
- What are the consequences of declaring bankruptcy of a Polish limited liability company?
- Bankruptcy of a company in Poland – summary
Bankruptcy in Poland. When to declare bankruptcy of a Polish limited liability company?
Commercial Companies Code and Bankruptcy Law govern the bankruptcy of an LLC. According to Art. 10 of the Bankruptcy Law, an LLC declares bankruptcy when it becomes insolvent.
Insolvency occurs when:
- a company is no longer able to pay its debts as they fall due, and the delay exceeds 3 months. This is referred to as insolvency due to the loss of financial liquidity;
- the company’s liabilities exceed the value of its assets and this state persists longer than 24 months. This is referred to as insolvency due to excessive debt;
Who files a petition for bankruptcy of a Polish limited liability company?
According to general rules stated in Art. 21 of the Bankruptcy Law, the debtor has to file a petition for declaring bankruptcy.
Yet, in the case of bankruptcy of a limited liability company, the obligation is not only on the debtor. It also applies to entities representing it or conducting its affairs. Namely, members of LLC’s management board and its liquidators. Provisions of the act or the company’s agreement should indicate such right.
What is the deadline for filing a bankruptcy petition for a limited liability company in Poland?
According to the regulations, the debtor has to submit a bankruptcy petition to the court no later than 30 days from the date on which the basis for bankruptcy occurred (insolvency).
If that obligation is not fulfilled, the competent persons are liable for the resulting damage.
Bankruptcy of a Polish limited liability company and the liability of management board members
As stated above, the duty to file a bankruptcy petition of an LLC lies on the members of its management board. If they fail to do so, they are liable for the damage caused to creditors, or for the failure to submit it on time. A management board member may be freed from this liability only if he proves that he is not responsible for missing the statutory deadline.
What should a petition for bankruptcy of a Polish LLC include?
According to Art.22 of the Bankruptcy Law, the bankruptcy petition of an LLC must include:
- National Court Register number of the company,
- business name under which the company is operating,
- company’s registered office and address,
- names and surnames of representatives, including liquidators, if appointed,
- indicating the location of the company’s principal place of business,
- indicating the facts justifying the petition and substantiation of those facts.
Attachments to the petition should include:
- a current list of the assets, including their estimated value,
- a balance sheet prepared as of a date within 30 days prior to the date of submitting an application,
- a list of creditors,
- a list of enforcement orders and enforceable titles against the debtor,
- information on the domicile of the company’s representatives and liquidators, if any have been appointed.
Bankruptcy in Poland. What are the costs of filing a bankruptcy petition for a limited liability company?
According to Art. 74 of the Act on Court Costs in Civil Cases, a fixed fee of 1000 PLN applies to the petition for bankruptcy.
What are the consequences of declaring bankruptcy of a Polish limited liability company?
Among the most important consequences of declaring a limited liability company bankrupt are:
- the transfer of the company’s assets to the bankruptcy estate,
- taking over the management of the company and its assets by the official receiver,
- the need to operate under the current company’s name with the addition of the phrase “in bankruptcy”,
- sale of all the assets and liquidation of the company.
Bankruptcy of a company in Poland – summary
A limited liability company can be declared bankrupt only if it becomes insolvent. Thus, it relates to a situation where the company loses the ability to pay its due liabilities. The obligation to file a bankruptcy petition concerns each member of the management board. A relevant body should submit the bankruptcy petition for an LLC within 30 days from the date of the insolvency.
Do you want to find out how to declare bankruptcy of a limited liability company? Do you need help in the correct preparation of the application to the bankruptcy court? Contact us. Our experts have many years of experience in advising entrepreneurs at various stages of their business. From company’s registration to its liquidation or bankruptcy. Do not hesitate to contact us for assistance.
