Business Constitution – the most important changes (part 2) | Legal Alert

On 30 April 2018 Business Constitution entered into force. It has introduced a number of beneficial system changes described in the previous publication “Business Constitution – the most important changes (part 1)” as well as a number of changes specified below which aim is to make the development of business activity in Poland easier, in particular for small and medium-sized entrepreneurs.

1. Unreported activity as a new form of business activity and a new relief for a start

Unreported activity refers to a minor economic activity of natural persons (e.g. occasional services). The condition of running the unreported activity is the situation where the revenues from such activity do not exceed 50% of the amount of the minimum remuneration in each month. It will allow natural persons to conduct additional casual works.

What is more, a new relief for a start has been introduced. During the first 6 months since the establishment of a business activity by the natural person, such person will be exempted from paying social security contributions. Later, such an entrepreneur will have the right to the so-called “Small ZUS” [Social Insurance Institution ] pursuant to the currently applicable rules.

2. Suspension of business activity will be easier

Pursuant to the previous existing legislation, the entrepreneur could suspend business activity only if he/she did not hire any employees, whereas in accordance with new provisions introduced to the Law of entrepreneurs, the entrepreneur who hires only employees on parental leave (e.g. maternity leave) may also exercise this right.

Moreover, the entrepreneur entered into KRS [National Court Register], i.e. for instance limited liability companies, may suspend his/her business activity as previously, i.e. for the period of time from 30 days to 24 months. Novum is the fact that the entrepreneurs entered into the Central Registration and Information on Business may suspend their business activity both for a definite period of time not shorter than 30 days or for an indefinite period of time.

What is interesting, specific regulations have not yet been introduced in this scope except for the issue of executing obligations of a public-law nature which would clearly indicate in what way the suspension of business activity will influence concessions held by entrepreneurs and, in particular, whether the suspension of business activity should result in the suspension or change of the concession. Admittedly, what is new is the fact that in the chapter concerning state-regulated business the provisions of Law of entrepreneurs clearly indicate the possibilities of suspension of concessions. However, due to the regulation of rules relating to the provisions of performing licensed activity in separate acts, such issues must be regulated separately in utilities acts.

3. Gradual elimination of REGON [Polish Business Identification Number]

The Law of entrepreneurs has introduced using only NIP [TIN], as a rule, by entrepreneurs which means that, for instance, while settling the matters a body may now request the entrepreneur to specify only the name of the company and its NIP in order to identify the company.

In the context of the above, Business Constitution introduces changes to the statutory provisions, which until now have not required specifying REGON number. The changes consist in the possibility to identify the entrepreneur only by providing NIP number. What is more, new provisions require changing a number of implementing regulations and substituting the obligation to use REGON by the entrepreneur in front of some bodies or to use both REGON and NIP with the obligation to use inly NIP.

Despite the introduction of the above changes, a problem may occur when using REGON in perpetual books or pledge register, which still use REGON. However, in practice it will not cause far reaching problems, since REGON will not be completely eliminated. The authors of Business Constitution explain that “this change does not mean the liquidation of REGON or elimination of the possibility to use and exploit it.” Therefore, due to the meaning of provisions of Law of entrepreneurs it should be stated that separate acts may impose additional obligations on the entrepreneur apart from specifying the company and NIP. Nevertheless, it is possible that using REGON in future will be diminished and as a consequence, it will be completely eliminated from legal transactions.

4. Other benefits for entrepreneurs

New regulations provide also for the new changes to the Civil Code. In accordance with them, a clear authorisation of entrepreneurs, who are natural persons, to grant the power of attorney has been introduced, whereas publishing information about a proxy or plenipotentiary in CEIDG [Central Registration and Information on Business] will be equivalent to granting power of attorney or proxy in writing.

The change to the Code of Administrative Procedures introduces the possibility to enable settling the matters by phone or by means of electronic communication. In practice, it means that the administrative procedure will be quickened. For example, in case of lack of attachments, the office will have the possibility to call the entrepreneur by phone which will significantly shorten the waiting time. The body will be obliged to prepare notes from such talks.

Business Constitution has also introduced “The Portal of Information for Entrepreneurs” by means of which the entrepreneurs may, among other things, obtain a certificate on the absence of arrears in payments of social and health security contributions.

Summary

The changes introduced by a number of acts named Business Constitution introduce a series of positive solutions helpful in conducting and establishing business activity in Poland. It is worth mentioning that not all amended provisions are of a revolutionary nature and might have been employed before the changes entered into force. It refers for instance to the rules for running a business activity in the place where the entrepreneurs applied for concessions, licences or other administrative decisions. The majority of such rules might have been executed on the basis of the Code of Administrative Procedures. This, however, does not alter the fact that introducing such rules as common rules of running every business activity is a highly desirable action.

However, the complete evaluation of the influence of the changes introduced in the Business Constitution on entrepreneurs will be possible only after some time. The practice and interpretation of provisions by administrative bodies will be significant in the implementation of these changes. Some of the changes, before being implemented in the utilities acts, will be unenforced (this topic will be further referred to in a separate publication).

Contact us to learn more:

Anita Palukiewicz – Counsel

Rafał Włodarski – Senior Associate, Attorney at Law