Polish Commercial Companies Law, Polish Accounting of Commercial Companies in Poland

When can a partner in a Polish limited partnership demand the payment of their share of the company’s profit? When does the claim for profit payment in a Polish limited partnership arise? Can a partner in a Polish limited partnership demand the payment of their share of the company’s profit after preparing the financial statement, or must they wait for its approval?

We will try to answer these questions.

In practice, disputes often arise between partners concerning the determination of the amount of profit subject to distribution, the timing of this distribution, blocking it by withholding the approval of the financial statement, or not making the statement available to the limited partner.

When assessing when a partner’s claim for profit distribution in a Polish limited partnership arises and becomes due, it is necessary to consider not only the provisions of the Polish Commercial Companies Code and the content of the company’s agreement but also the provisions of the Polish Accounting Act. Polish limited partnerships are obliged to apply the provisions of the Polish Accounting Act, including the preparation of annual financial statements, which are subject to approval by the partners’ resolution.

Unlike in Polish capital companies, in a Polish limited partnership, profit distribution to partners is generally not dependent on adopting a resolution on this matter – it does not require a prior resolution to allocate profit for this purpose. By law, a partner is entitled to a claim for profit distribution for the previous financial year. Significant changes in this regard may result from the content of the company’s agreement, hence it is important to analyze it thoroughly in each case.

According to the Polish Commercial Companies Code, “a partner may demand the distribution and payment of profit at the end of each financial year.” Therefore, the claim for profit distribution arises on this date. Of course, a separate issue is determining whether the company has generated a profit that can be distributed among the partners. Making such determinations requires analyzing the annual financial statement. The emergence of the claim for profit distribution at the end of the financial year does not mean that it is immediately due (can be claimed by the partner) – a condition for its maturity is certainly the preparation of the financial statement allowing the calculation of the profit amount subject to distribution. Moreover, according to the explicit provisions of the Polish Accounting Act (Article 53(4) of the Polish Accounting Act), “the distribution or coverage of the net financial result of entities not required to have their annual financial statements audited may occur after the approval of the financial statement by the approving body.” The wording of the cited provision is clear, it conditions the profit distribution not only on the preparation but also on the approval of the financial statement. Despite this, a significant part of the legal doctrine, following the judgment of the Polish Supreme Court, presents the view that a partner in a Polish limited partnership may demand the distribution and payment of dividends also before the financial statement’s approval, if the statutory deadline for such approval has already passed.

At our accounting firm PRWT, we handle verification of factual situations related to profit distribution in Polish limited partnerships from both accounting and legal perspectives. We offer professional accounting and legal assistance in verifying whether and to what extent a limited partner’s claim for profit distribution in a Polish limited partnership has arisen and in effectively pursuing such claims.

If you have any problems or doubts regarding the situation discussed in this article, please contact us:

Polish Accounting Office Kraków

PHONE: +48 12 345 21 06
EMAIL: biuro.krakow@prwt.pl

Polish Accounting Office Warsaw

PHONE: +48 22 292 47 21
EMAIL: biuro.warszawa@prwt.pl