Can the National Court Register (KRS) Impose a Fine on Shareholders and Management Board Members in a Limited Liability Company (Sp. z o.o.)?

Limited Liability Company – A Safe Business Form, But Not Without Obligations

A limited liability company (Sp. z o.o.) is one of the most commonly chosen business structures in Poland. Entrepreneurs often opt for it due to the limited liability of its shareholders—meaning they are generally not personally liable for the company’s debts.

However, this does not mean that both shareholders and board members are entirely free from responsibility. In practice, the registry court (KRS) can impose fines on them if they fail to fulfill legal obligations, such as submitting financial statements or reporting changes to the company register.

While a Sp. z o.o. provides a high level of financial security, neglecting registration obligations can result not only in financial penalties but also in a loss of credibility with business partners or banks.

Duties of Management Board Members in a Sp. z o.o.

According to Article 151 §1 of the Commercial Companies Code (KSH), the management board represents the company and manages its affairs. This includes internal operations (e.g. signing contracts, overseeing finances), as well as fulfilling duties towards external institutions—including the National Court Register (KRS).

The board’s main responsibilities include:

• Submitting all required documents to the KRS,
• Updating the register in case of changes (e.g. address, business activity codes (PKD), board members, shareholders, or proxies),
• Signing and submitting the financial statement along with the shareholders’ resolution approving it,
• Reporting appointments or dismissals of company bodies.

Failure to meet any of these duties can lead to the initiation of enforcement proceedings by the registry court and the imposition of fines.

When Can the Court Fine the Board or Shareholders?

The National Court Register plays a supervisory role over capital companies. If a Sp. z o.o. fails to meet its registration obligations, the court may apply enforcement measures as outlined in Article 24 of the Act on the National Court Register.

The most common situations include:

• No appointed management board (making it impossible for the company to act),
• Incomplete board that cannot legally represent the company,
• Failure to submit the financial statement on time,
• Failure to report changes to the company’s PKD,
• Failure to report a change of the company’s registered address or board members’ addresses,
• Failure to update information about shareholders or share capital.

In such cases, the registry court issues a decision initiating enforcement proceedings, summoning the responsible persons (usually board members, and in some cases shareholders) to comply under threat of a fine.

What Is KRS Enforcement Proceedings?

Enforcement proceedings are administrative-judicial in nature and aim not to punish but to compel obligated parties to act.

In practice, the process looks as follows:

1. The registry court identifies a deficiency or irregularity (e.g. missing financial statement),
2. It summons the company or board members to correct the issue within a set deadline,
3. If the obligation is not fulfilled, the court imposes a fine (which can be repeated multiple times until compliance is achieved).

Fines can reach several thousand PLN, and courts often impose penalties ranging from 1,000 to 5,000 PLN per offense. If the problem persists, the court may continue to issue fines until the obligation is met.

Can Shareholders Be Fined?

Although the primary responsibility for compliance with the KRS lies with the management board, in exceptional cases, fines may also be imposed on shareholders.

This happens when:

• The company has no management board and no one is appointed despite court summons,
• The company is effectively inactive, and shareholders take no action to dissolve or liquidate it,
• Shareholders obstruct the board’s ability to fulfill its obligations.

In such cases, the court may determine that the shareholders—ultimately responsible for the company’s legal existence—must rectify the situation. If they fail to act, they too may be fined.

Consequences of a Fine Imposed by KRS

A fine from the registry court is enforcement-based, not criminal. Its purpose is to compel action, not to punish.

However, in practice, it can have serious consequences:

• Once the fine ruling becomes final, the court may assign a bailiff to enforce it,
• The company’s or a board member’s bank account may be blocked,
• In extreme cases, the court may initiate compulsory dissolution of the company.

The deadline to appeal the fine decision is 7 days from the date of delivery. After that, the decision becomes final and enforceable.

How to Avoid a KRS Fine?

The simplest way to avoid a fine is to stay up to date with all reporting and registration obligations. Even if a fine has already been imposed, it can still be lifted.

According to court practice, if the obligated party fulfills the duty after the fine is issued (e.g. submits missing documents or updates the register), the court will cancel the imposed penalty.

This is important because the goal of the fine is to force action, not to punish. Therefore, it’s always worth responding to the court’s summons as soon as possible—by submitting documents, providing explanations, or filing for changes to the register.

Practical Tips for Board Members and Shareholders

To avoid issues with the KRS and potential penalties:

1. Regularly monitor your company’s KRS entry – check if all data is current.
2. Meet all deadlines – financial statements must be submitted within 15 days of approval.
3. Report any changes – address, board composition, PKD code, or proxy appointments must be reported within 7 days.
4. Maintain organized documentation – this will make it easier to respond quickly to any court requests.
5. Work with a legal representative or accounting firm – professionals will ensure filings are timely and accurate.

Note: Ignoring correspondence from the registry court is one of the most common reasons for fines.

Summary – A KRS Fine Is Not the End of the World, but a Warning Sign

The National Court Register has real tools to compel companies to comply with their legal obligations. A fine imposed on board members or shareholders is not a criminal penalty, but a disciplinary measure intended to prompt compliance.

The most important thing is to act quickly—appeal the fine if there are grounds, or fulfill the obligation and request cancellation of the penalty.

Remember: In the eyes of the court, a company that reacts and corrects its mistakes looks far better than one that remains passive.

???? Need support with KRS matters or representation before the registry court?

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✅ Submit missing documents
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