The joint-stock company established by the transformation of a limited liability company is entitled to all the rights and obligations of a limited liability company. A joint-stock company established as a result of transformation will also be the subject of permits, concessions and concessions granted to a limited liability company before its transformation.
Such a transformation seems extremely attractive, for example due to the possibility of raising capital through public issue of shares.
Joint-stock companies are usually created to run projects of the largest size. Shareholders in a joint-stock company, like partners in a limited liability company, do not meet their own assets for the company’s liabilities. The creditor can not, therefore, pursue his claims against them, but only against the company.
The process of transforming a limited liability company into a joint-stock company is regulated by the provisions of Title IV, Section III, Chapters 1 and 4 of the Code of Commercial Companies.
To transform a limited liability company into a joint-stock company it is necessary to meet several requirements:
The amount of share capital
The share capital of a limited liability company should be adjusted to the minimum requirements for share capital in a joint-stock company. This means that it can not be lower than PLN 100,000.
The capital of the transformed joint-stock company can not be determined at a level lower than the share capital of the transformed limited liability company
Example: if the share capital of a limited liability company is defined as PLN 150,000, when we convert it into a joint-stock company, its capital can not be lower than this amount.
We can reduce it at the limited liability company before the transformation process
or only after the company is transformed into a joint-stock company – under the provisions on the reduction of share capital in a joint-stock company.
Approval of financial statements
A necessary condition for the transformation of a limited liability company into a joint-stock company is also the need to approve the financial statements of the company for at least the last two financial years.
If the company operates on the market for less than two years, it will be necessary to approve reports from the entire period of its activity.
Importantly, there is no minimum time after which we can transform a limited liability company into a joint-stock company. In practice, a joint-stock company may become a limited liability company, which operates only a few days – says one of the specialists of the Caldwell consulting company.
If a limited liability company is in bankruptcy or liquidation, it is not possible to transform it into a joint-stock company.
The transformation procedure
The conversion procedure usually lasts several months and consists of several stages:
- creating a plan for transforming the company with attachments,
- assessment of the plan by a certified auditor,
- shareholder notices of intention to transform,
- adoption of a resolution on the conversion, adoption of the statute and the establishment of members of the bodies of the incorporated joint-stock company,
- filing statements by shareholders regarding participation in a newly created joint-stock company,
- registration of a joint-stock company established in the National Court Register and deletion of a limited liability company from the register