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Debt collection from a contractor – how to recover your money?
2024-08-20 08:51

Debt Collection from a Contractor – How to Recover Your Money?

Whether you run a business or not, you may at some point face the challenge of debt collection. Unpaid invoices, payment delays, or a debtor avoiding contact can seriously disrupt cash flow—even for a company. What should you do when a contractor doesn’t pay? How can you effectively assert your rights? Here’s a guide that will help you understand the debt collection process and outline the steps you should take.

What is a Debt?

A debt is the right to demand that the debtor fulfill a specific obligation. Most often, payment for goods or services. A debt may also involve the repayment of a loan, payment for services rendered, or another type of financial obligation arising from an agreement between the parties. When your contractor is overdue on payments, you have the right to pursue the owed money. Although this process may seem complicated, it is essential for maintaining financial stability. That’s why it is so important to act in an organized and thoughtful manner.

What Are the First Steps in Debt Collection?

Reminder and Contact with the Debtor

The first step you should take is to contact the debtor. Payment delays are often due to oversight or temporary financial difficulties. It’s worth starting by sending a reminder about the overdue payment—this can be an email or SMS. It’s crucial that contact with the debtor is documented. If you use email, save all messages you send and any responses you receive. This could be important if the matter goes to court.

Payment Demand Notice

If the reminder doesn’t work, the next step is to send a formal payment demand notice. This document should include detailed information regarding the amount owed, the payment deadline, and possible legal consequences if the delay continues. A payment demand notice is an important step that shows the debtor you are serious about the matter. A well-prepared demand can take the form of a registered letter, giving it an official character. It’s advisable to specify a final payment deadline in the document.

Negotiations with the Debtor

It’s also worth considering negotiating with the debtor. Sometimes, the debtor may agree to pay the debt in installments or agree to other terms that are favorable to both parties. This approach is particularly beneficial if you want to maintain good business relations with a contractor who has fallen into financial difficulties for various reasons. Remember to formalize any agreements reached in a contract.

What to Do if the Debtor Avoids Payment?

If the debtor continues to avoid payment despite reminders and demands, it may be necessary to take more decisive action. As a law firm, we strive to get the most out of each case at the pre-litigation stage. Taking a case to court is our last resort. However, if there is no response to attempts to amicably resolve the disputed issues, or if the debtor fails to pay as agreed, the creditor should consider filing a lawsuit.

Going to Court

If none of the previous actions have worked, you can file a lawsuit in court. Legal proceedings in payment cases can take time, though they don’t always have to. Depending on the value of the claim and the evidence you have in the case, proceedings can be conducted in different “modes.” If you have a document showing the debtor’s acknowledgment of the debt, you can apply for a payment order in summary proceedings. If you do not file such an application, the case will be heard in a writ-of-payment mode. Most payment cases—if the evidence submitted with the lawsuit allows it—end with a payment order being issued without a hearing.

Enforcement by a Bailiff

After obtaining a final judgment—whether it’s a payment order or a court judgment—you can apply for the enforcement clause to be attached to the enforceable title. After serving the enforceable title, you can request a bailiff to initiate and carry out enforcement proceedings. The bailiff, depending on the content of your application, has the right to seize the debtor’s assets, including bank accounts, movable property, and even real estate, to satisfy the debt. The enforcement process by a bailiff is usually the final stage in debt collection, but its effectiveness often depends on whether the debtor has sufficient assets to satisfy the claims. The bailiff can also auction seized movable or immovable property, allowing for the funds needed to pay off the debt to be raised.

Is It Worth Using the Services of a Law Firm? Debt Collection in Szczecin.

Law firms specializing in debt collection can significantly speed up the entire process. Working with professionals ensures that all steps are taken in accordance with the law, and the debtor has no grounds for defense. A legal advisor can help draft a payment demand notice, prepare a lawsuit, and represent you in court. Additionally, the law firm can negotiate with the debtor, which often leads to a quicker and more favorable resolution of the case. It’s worth noting that in the lawsuit, you can claim the reimbursement of legal costs from the debtor if the court rules in your favor.

Summary – How to Effectively Assert Your Rights?

Debt collection in Szczecin can be divided into several stages. However, the key is to act quickly and decisively. The longer you wait, the harder it may be to recover your money, and the debt may become more difficult to collect. Every situation is different, so not every method will be effective in all cases. It’s always worth carefully analyzing the situation and choosing the strategy that best suits your needs.

If you still have doubts after reading this article, contact us. Our team of lawyers will help you outline a plan of action to recover your dues and provide support at every stage of the proceedings. We’ll discuss your situation and help you find the best solution.

Contact Us

If you need legal assistance, contact our law firm at +48 690 009 732

Write us an email: info@walawski.com

You can also message us on Facebook: Our Facebook Profile

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We invite you to read our latest article, where we answer the most frequently asked questions in conversations with clients – “What is the difference between an advocate and legal counsel?”. “Can a legal counsel appear in court?”. You can find the link to the article here.

Establishment and registration of a limited liability company (Sp. z o.o.) in Poland
2024-08-09 08:34

Establishment of a limited liability company (Sp. z o.o.) in Poland

Establihsment of Limited Liability Company (Sp. z o.o.) in Poland: A Step-by-Step Guide

Starting a limited liability company (Sp. z o.o.) in Szczecin can seem complicated, especially for those without prior experience in running a business. In this article, we present a comprehensive guide to help you establish a Sp. z o.o. step by step in Szczecin. We will cover all the necessary steps, from initial decisions, through the registration process, to the formalities related to the company’s operation. This will enable you to successfully start your own limited liability company in Szczecin.

ESTABLISHING A SP. Z O.O. IN SZCZECIN: WHERE TO START?

A limited liability company (Sp. z o.o.) is one of the most popular forms of conducting business in Poland. In Szczecin, as in other cities, establishing a Sp. z o.o. requires meeting certain conditions and going through the registration process. In this article, we will discuss the basic steps you need to take to establish a Sp. z o.o. in Szczecin.

HOW TO ESTABLISH A SP. Z O.O. IN SZCZECIN: FIRST STEPS

The process of establishing a Sp. z o.o. in Szczecin begins with deciding on the legal form of the business and choosing the company’s name. Next, you need to draft the company’s articles of association, which will include information about the business objectives, the amount of share capital, and the company’s registered office. It is also worth considering the division of shares among partners and the method of representing the company.

CONDITIONS FOR ESTABLISHING A SP. Z O.O. IN SZCZECIN

To establish a Sp. z o.o. in Szczecin, several basic conditions must be met. The first step is to draft the company’s articles of association. There are two options – in the form of a notarial deed or through the S24 system. Regardless of the method used, the agreement must include mandatory clauses. Partners must specify the company’s name and registered office, as well as the scope of its activities. The partners should also consider the amount of share capital, which must be at least PLN 5,000. The company must have at least one partner (a natural or legal person), and the articles should state whether a partner can hold more than one share and the number and value of shares held by each partner. The duration of the company should also be indicated. Once the agreement is drafted and signed, the company can proceed with the registration process.

PROFESSIONAL COMPANY FORMATION IN SZCZECIN: WHEN IS IT WORTH GETTING HELP?

In some situations, it may be worth considering professional assistance in establishing a Sp. z o.o. in Szczecin. Primarily, if you lack experience in running a business or are unsure how to properly prepare the documents necessary for company registration, seeking expert support may be advisable. Professional company formation in Szczecin can also speed up the registration process and help avoid mistakes that could delay the company’s operations. Additionally, experts can provide advice on tax optimization, employee hiring, or choosing the right company headquarters.

PROCEDURE FOR ESTABLISHING A SP. Z O.O. IN SZCZECIN

The procedure for establishing a Sp. z o.o. in Szczecin consists of several stages, including document preparation, company registration, and completing the formalities associated with starting the business. In the following sections, we will discuss the individual steps of the process to answer the question of how to establish a Sp. z o.o.

REGISTRATION OF A SP. Z O.O. IN SZCZECIN: STEP BY STEP

The process of registering a Sp. z o.o. in Szczecin includes the following stages:

Preparation of the company’s articles of association and other required documents, such as partner statements or consents to perform board member functions.
Submission of an application for entry into the National Court Register (KRS) along with the required attachments.
Obtaining the REGON, NIP, and possibly VAT numbers.
Opening the company’s bank account.
Registering with the Central Register of Beneficial Owners.
Registering the company with the Social Insurance Institution (ZUS) and possibly registering employees.

The formalities for registering a Sp. z o.o. in Szczecin can be completed via the Court Registers Portal (if the articles of association are in the form of a notarial deed). If the agreement was made through the S24 system, the registration application should be submitted through the same system.

COST OF ESTABLISHING A SP. Z O.O. IN SZCZECIN: HOW MUCH DOES IT COST?

The costs associated with establishing a Sp. z o.o. in Szczecin include:

A court fee for entry into the KRS, which is PLN 350.
Notarial costs related to preparing the company’s articles of association, which can range from PLN 500 to over a thousand PLN, depending on the share capital amount and the complexity of the agreement.
A fee for publication in the Court and Economic Monitor, which is PLN 100.
Possible costs for legal and tax advice and accounting services.

The total cost of establishing a Sp. z o.o. in Szczecin can range from PLN 950 to PLN 2,000, depending on the choice of additional services.

If you register the company through the S24 system, your costs will be limited to PLN 350, which includes:

An entry fee to the National Court Register – a court fee of PLN 250. The S24 system will automatically provide the bank account number of the registration court appropriate for your company’s registered office.
A fee for the publication of the first entry in the “Court and Economic Monitor” of PLN 100, payable to the current account of the district court receiving the entry application.
A handling fee for the payment operator.

FAST COMPANY REGISTRATION IN SZCZECIN: HOW DOES IT WORK?

Fast company registration in Szczecin is possible thanks to the S24 system, which allows for the establishment of a Sp. z o.o. online. This process shortens the registration time to a few business days. To take advantage of fast registration, you should:

Prepare the company’s articles of association in the form of a notarial deed.
Register in the S24 system and submit an application for entry into the KRS with attachments.
Obtain the REGON, NIP, and possibly VAT numbers.
Open the company’s bank account online.
Register the company with the ZUS and possibly register employees.

Fast registration of companies in Szczecin allows for speeding up the company formation process and reducing the formalities associated with registration.

S24 COMPANY REGISTRATION IN SZCZECIN: ADVANTAGES AND DISADVANTAGES

Registering a company through the S24 system in Szczecin has its advantages and disadvantages. The advantages include:

Faster company registration process.
The ability to establish the company without the need to appear in court in person.
Simplification of the registration formalities.

The disadvantages of registering a company through the S24 system in Szczecin include:

The need to use templates of articles of association, which limits flexibility in defining certain provisions.
Not all types of companies can be registered through the S24 system.

PREPARING THE COMPANY FOR REGISTRATION IN SZCZECIN

Before submitting the application for registering a Sp. z o.o. in Szczecin, several important tasks need to be completed. These include:

Preparing the company’s articles of association and obtaining the signatures of all partners.
Completing the necessary declarations, such as the declaration of partners on the amount of contributions and their transfer to the company.
Determining the company’s management structure and electing members of the management board or supervisory board.
Completing documents related to the company’s address, such as a lease agreement or deed of ownership.

Preparing the company for registration in Szczecin is crucial for the success of the entire process. Properly completing all the formalities will help avoid delays and allow the company to start its operations quickly.

DOCUMENTS REQUIRED FOR REGISTERING A COMPANY IN SZCZECIN

To register a Sp. z o.o. in Szczecin, the following documents are required:

The company’s articles of association.
A list of shareholders along with information on their contributions.
A resolution on the appointment of members of the management board and, if necessary, the supervisory board.
The company’s address, confirmed by appropriate documents (e.g., lease agreement).
Applications for entry into the KRS, REGON, NIP, and VAT numbers.

CHOOSING THE COMPANY’S REGISTERED OFFICE IN SZCZECIN: WHICH LOCATION TO CHOOSE?

Choosing the company’s registered office is an important decision that impacts the company’s operations. In Szczecin, there are many possibilities, depending on the needs and specifics of the business. You can opt for:

Renting office space in a prestigious location in the city center, which enhances the company’s image.
Choosing a cheaper office on the outskirts of the city, which reduces operating costs.
Using a virtual office service, which allows you to save on rent and still have a professional address for your company.

When choosing the company’s registered office in Szczecin, it is worth considering the nature of the business, budget, and accessibility for customers and employees.

CONCLUSION: SP. Z O.O. IN SZCZECIN – A COMPANY YOU CAN START SUCCESSFULLY

Establishing a limited liability company in Szczecin is a process that requires proper preparation and meeting many conditions. However, with the right approach and the use of professional assistance, setting up and running a Sp. z o.o. in Szczecin is possible and provides many benefits.

Remember that establishing a Sp. z o.o. is just the first step. Equally important is the continuous management of the company, monitoring changes in legal regulations, and adapting the business to market conditions. With the right approach, your company will be able to achieve success and develop in the demanding Szczecin market.

We invite you to listen to a podcast about how to set up a limited liability company. Legal counsel Julia Marcola discusses the most important issues related to establishing a company and provides tips on what matters should be considered in this regard.

You can find the article along with a link to listen to the conversation here.

Permanent establishment (PE) for foreign businesses
2024-07-25 12:40

Foreign entrepreneurs conducting business activities in Poland should be aware of potential tax implications. Different business models can lead to establishing a foreign permanent establishment (PE). In such cases, the Polish tax office may claim taxes on income earned within Poland.

Understanding tax residency and Double Tax Treaties (DTTs):

The general rule for settling taxes is based on unlimited tax liability, or tax residence. Simply put, taxes are paid in the country of residence. For companies, this is the country of their registered office. International double tax treaties (DTTs) exist to prevent companies from being taxed twice on the same income.

However, if a taxpayer has a PE in another country, that country can tax the income earned by that PE.

What constitutes a permanent establishment?

The definitions of a PE are found in DTTs and Polish legislation. Typically, a foreign PE includes:

A fixed place of business through which an entity conducts all or part of its activities in Poland (e.g., branch, subsidiary, representative office, factory, workshop, farm, or place of natural resource extraction).
A construction, assembly, or installation project lasting longer than a year.
Another person or company acting on the foreign entity’s behalf with a power of attorney to enter into contracts and who actually exercises that power.

Polish income tax laws prioritize DTTs in determining the existence of a PE. Polish regulations apply mainly when there’s no DTT between the foreign taxpayer’s country of residence and Poland.

Therefore, a foreign PE can arise in various situations. It’s not just about conducting full-scale business activity in Poland (like a branch or subsidiary). The definition also includes specific business parts (factories or workshops), performing commissioned work (construction sites, assembly), or cooperation with another business entity (representative for concluding and negotiating contracts).

Specific type of PE: Representative:

The OECD Model Convention adds significant details regarding a PE arising from a contractual representative. According to the OECD Model Convention, if a person regularly enters into contracts or plays a central role leading to contracts routinely entered into by the enterprise without significant modifications, and those contracts are:

Made on behalf of the enterprise,
Related to transferring ownership or granting rights to use property owned by the enterprise, or
For providing services by the enterprise,

then that undertaking will be considered to have a PE for any activity undertaken for that enterprise.

Activities that don’t create a PE:

Fortunately, international treaties, following the OECD Model Convention, have limitations on applying PE provisions. A PE won’t be established if a facility is used or maintained for:

Storing, displaying, or issuing goods belonging to the enterprise.
Storing goods solely for storage, display, or delivery.
Storing goods solely for processing by another undertaking.
Purchasing goods or collecting information for the enterprise.
Carrying out any other preparatory or auxiliary activity for the enterprise.

Additionally, OECD Model Conventions and international agreements state that working with a professional representative acting in the ordinary course of business (e.g., broker, commission agent) does not create a PE.

Analysis and practice about PE:

As you can see, the risk of creating a PE exists in many situations when starting a foreign business. Therefore, it’s crucial to verify if the tax office in the country you’re entering will be interested in your income. Analyze your actual activity in that country to assess whether conditions exist that exclude creating a PE.

The Polish tax authorities have considered the following activities to create a PE:

An employee of a foreign company working from home in Poland.
An office in Poland developing software for a foreign company.
A manager acquiring clients for a foreign company.
A contract manufacturer.

Future articles will detail situations where Polish tax authorities found a PE, the tax consequences, and the challenges faced.

How we can help you?

If your company conducts or plans business in Poland, we can assist you with:

Analyzing whether a PE has been established in Poland and advising on minimizing such risks.
Registering for tax purposes in Poland.
Preparing relevant documents for establishing and recording income in Poland.
Filing the relevant tax returns.