New company succession law comes into effect
The Ministry of Entrepreneurship and Technology has come up with new legal provisions that will deeply affect numerous family businesses in Poland. After receiving requests from Polish entrepreneurs who pointed out to the Ministry the lack of applicable regulations, government experts prepared an act that regulates the matters of company succession in the even of an entrepreneur’s death. The lawmakers want to prolong the existence of businesses and give successors a chance to keep their parent’s legacy and build strong, long-lasting Polish companies.
The new provisions apply to sole entrepreneur companies registered in the CEIDG register (Central Information and Registration on Business) and introduce succession management. In short, after the death of an entrepreneur, their business will no longer die with them. The company will retain its tax number, held licences, and signed contracts. The operations will be taken over by the successors.
Ministry officials point to the fact that sole proprietorship is structure chosen by 80 percent of new businesses in Poland. Every month over eight hundred people are removed from the business register due to their death. Moreover, a lot of Polish business owners who started activity in the 1990s are now in their 60s, which means they should consider what may happen to the company once they pass away.
The legal act, which came in to effect last Sunday, allows an entrepreneur to appoint a succession manager who will take over the business after their death. The manager may also be appointed by their spouse or heirs. The successor manager will administer the company until all inheritance procedures are completed and the family decides whether they want to continue the business. The management will not last longer than two years (five years in special cases).
Minister Jadwiga Emilewicz in a press conference argued the new provisions are simple, free of charge and do not require a lot of paperwork. Thanks to the new law, company succession is now going to be smooth and easy.