Single-person Limited Liability Company

 Single-person limited liability company is a company in which there is only one shareholder. It is an alternative of individual business activity, but a limited liability company, compared to it, reduces business risk.

 Despite the many advantages of a single-person company, there are some limitations that are needed to know every entrepreneur who operates such types of activity. First of all, it should be remembered that a single-person limited liability company cannot be established by another one-person LLC. However, there is a possibility of selling shares for a single-person company after registration.

Secondly, until the single-person company is not entered into the register, the board member who is the only one founder cannot represent the company outside the organization, either as a board member or as an attorney.

Third, be careful about the form of the documents that are signed between the company and sole shareholder. Legal action between the founder and company administrated by him must be done in the form of a notarial deed. The resolution of the General Meeting of Shareholders requires the drawing up of a notarial deed, which must necessarily be accompanied by a protocol. Of course, the recorder person may be the also shareholder. The need to keep minutes applies to all decisions made by a single-person LLC.

The member of a limited liability company who is also the sole member of the management board cannot be employed in this company under an employment contract, because the employment contract is regulated by the Labor Code and must contain an element of subordination to the employer. In fact, in such a company there will be no subordination of the employer, because the employer and employee is the same person. But it is different with the contract of mandate, because it is regulated by the Civil Code. In addition to the contributions paid under the mandate contract, the sole member is still obliged to pay monthly insurance premiums of about PLN 1,350 as an individual entrepreneur.

To sum up, before making a decision to set up a single-person limited liability company, should carefully analyze whether it will allow you to take full of its advantages. However, not all of the restrictions described above would apply to companies with multi personal Board.