News

How a Succession Manager Can Secure Your Sole Proprietorship
2024-05-10 08:56

Introduction

Entrepreneurs running sole proprietorships often worry about the future of their business in the event of unforeseen circumstances. The institution of a succession manager, introduced in 2018, allows for the secure and continuous operation of the business even after the entrepreneur’s death.

Who is a Succession Manager?

A succession manager is an individual who temporarily takes over the management of the sole proprietorship after the death of the entrepreneur. Typically, they have 2 years to handle the formalities associated with “taking over” the business and to make decisions about its future.

How to Appoint a Succession Manager?

To appoint a succession manager, an entrepreneur must:

– Submit a written declaration appointing the manager;
– Obtain consent from the manager to perform the role;
– Register the management with the Central Registration and Information on Business Activity (CEIDG).

An entrepreneur can also appoint one “reserve” manager.

Heirs can also appoint a manager after the entrepreneur’s death. They have 2 months to do this, and it must be done at a notary’s office. However, it’s worth noting that appointing a manager post-mortem is more formalized and also tied with emotional difficulties due to the actions needed shortly after the death of a loved one.

Benefits of Appointing a Succession Manager

1) Smooth Business Transition: The business continues without the expiration of licenses and permits, allowing ongoing cooperation with existing JDG contractors.
2) Preservation of Tax Identification Number and Bank Accounts.
3) Tax Benefits: The possibility of remaining on the VAT white list, continuing to settle JDG in the existing form of taxation.

Potential Complications Without a Manager

The absence of a manager can lead to serious complications. Heirs can only undertake temporary tax activities related to the current business operations (up to 6 months). After 6 months without a manager, the business ceases to exist, resulting in the loss of accrued achievements.

Exemption from Inheritance and Donation Tax

Inheriting a business can be exempt from tax if:

1) The declaration of inheritance is made using form SD-Z2 within 6 months (for immediate family).
2) A buyer outside the family continues to run the business for 2 years after acquisition.
3) The business is contributed to a company (the 2-year condition applies to holding shares).

Summary

The succession manager is a valuable tool that ensures the continuation of a JDG after the entrepreneur’s death. It facilitates formalities, ensures smooth operation of the business, and offers a range of tax benefits. Our team of lawyers and tax experts is ready to assist you in establishing a succession manager and choosing the optimal solution for your business.

Succession Planning for Sole Proprietorships: Legal and Tax Aspects
2024-05-10 08:39

zabezpieczenie jednoosobowej działalności gospodarczej

Introduction

At some point in life, entrepreneurs face questions about the fate of their sole proprietorships in the event of severe illness or death. Often, these questions turn into worst-case scenarios where the business ceases to continue, and the family starts disputing over the inheritance.

Introduction to the Issue

In our Szczecin law firm, we have prepared a series of articles that describe simple steps to take to prevent growing concerns related to the deterioration of an entrepreneur’s health. We will focus on two key aspects: legal and tax.

Power of Attorney and Procuration – Legal Aspects

What are Power of Attorney and Procuration?

An entrepreneur running a sole proprietorship has the option to appoint a representative as either a power of attorney or a procurator. While the concept of a power of attorney is widely understood, the institution of procuration raises many questions. Procuration is a special type of commercial power of attorney granted only to individuals. It is governed by universally applicable laws and is not subject to limitations against third parties.

Registering a Power of Attorney in CEIDG

An entrepreneur who has appointed a power of attorney should consider registering it in the Central Registration and Information on Business (CEIDG). This registration has the same legal effects as granting a written power of attorney, which significantly facilitates actions before administrative bodies or in business dealings.

Key Questions Regarding Empowerment

By asking themselves a few basic questions, entrepreneurs can decide what type of empowerment is needed:

Is empowerment needed for a one-time affair or for ongoing management of specific aspects of the business?
Should the empowerment expire upon the entrepreneur’s death?

Depending on the answers, the entrepreneur can decide between a power of attorney and procuration.

Power of Attorney and Procuration – Tax Aspects

Different Types of Tax Powers of Attorney

For signing tax declarations – usually, this is a task for accountants, but it can also be granted to other persons.
General Power of Attorney (PPO-1) – entitles action in all tax matters, usually filed electronically only.
Special Power of Attorney (PPS-1) – allows acting in a specific case under the competence of the tax authority.

Procuration in Tax Legislation

A procurator can undertake actions in tax matters related to the running of the business, which significantly simplifies representation before tax authorities.

Conclusion and Preview of Future Articles

Maintaining health during illness is crucial for an entrepreneur. With a properly established power of attorney or procurator, one can focus on recovery, leaving business matters in trusted hands. In our next article, our legal advisor Julia Marcola and tax consultant Rafał Pazdyk will discuss the institution of succession management, which can be key in managing the further fate of a sole proprietorship.

Finalization of real-estate transaction
2023-05-26 09:33

We are happy and proud to announce that our team of lawyers has recently successfully completed a project related to the sale of real estate for a residential investment.
The value of the transaction reached the price of 15 million PLN, and the land located in Stettin was purchased by one of the largest developers in Western Pomerania.

The project was demanding due to the specific nature of the property being the subject of the transaction.
In the meantime, there were also numerous changes in the corporate-structure of the buyer, which required additional analyzes of contracts in terms of possible risks related to proper way of representation.

Our tasks focused in particular on issues related to securing claims, analysis of the legal status of real estate, as well as legal and commercial issues.
Our lawyers regularly advise clients on real estate matters in Stettin (and other parts of the country), but in terms of complexity and sale price, this was an exceptional transaction.

Although the process was laborious and complex to coordinate, we were even more satisfied with its finalization.

One of the pillars of our law firm’s activity is real estate matters. We represent our clients at every stage of the investment process, offering support both at the stage of examining the legal status of real estate, as well as negotiations, drawing up contracts and representation before the land and mortgage register court.