The Business Constitution introduces a package of five acts (the so-called “Morawiecki Package”) aimed to amend and simplify the regulations regarding conducting business activity in Poland. The most important act is the Business Law, which governs key rules of conducting business. It will replace the current Freedom of Business Activity Act.

New rules to govern the entrepreneur – official relation

The new legislation contains a number of regulations regarding the entrepreneur – official (office) relation. The act provides for the rule of presumption of innocence of entrepreneurs and the rule that whatever is not forbidden by the law is allowed. The latter rule is once again expressed in the legislation governing the rules of conducting business in Poland. Previously, it was directly included in the Business Activity Act of 23 December 1988 (the so-called “Wilczek Act”).

It is assumed that the new legislation will set a new standard of officials’ work. Officials are supposed to act to the benefit of entrepreneurs in the widest possible scope. Regulations which are unclear will therefore be interpreted to the benefit of entrepreneurs, and public offices will be bound by the proportionality principle to prevent imposing unjustified burdens on entrepreneurs.

Also, a Small and Medium Enterprises’ Commissioner will be appointed to intervene where entrepreneurs’ rights are infringed.

Registration not always necessary

One of the new ideas is the introduction of the so-called unregistered business activity pertaining to small-scale gainful business activity of natural persons. Such activity will not be considered a business activity and will not require registration with the CEIDG (Central Registration and Information on Business) if the income does not exceed in any month 50% of the minimum salary in Poland applicable in given year.

Start-up allowance

Morawiecki Package introduces a new allowance for those intending to start a new business. Those starting to carry on a business activity will be entitled to a start-up allowance – they will be exempted from social insurance contributions for the first 6 months from business registration. During the next 2 years, they will be entitled to the so-called “small ZUS” (reduced social insurance contributions).

It is notable, however, that the start-up allowance also carries a certain risk for the new entrepreneurs. As long as the allowance is used, the entrepreneur will not be registered for social insurance which means, in practice, among others that he/she will not be able to go on sick leave.

REGON to disappear

After the Business Constitution becomes effective, the basic identification number of those carrying on business activity will be the Tax Identification Number (NIP). The new regulations assume that the statistical number REGON, which is assigned by the Central Statistical Office, will gradually disappear.

Business activity suspension on new rules

Also, the regulations regarding the suspension of business activity will be amended. Micro and small entrepreneurs will be entitled to suspend their business for an indefinite time, even if they have employees on maternity or extended post-maternity leave.

A separate act for foreign entrepreneurs

The current incoherent regulations regarding the rules upon which foreign entrepreneurs and other foreign entities participate in the Polish business life will be replaced with one act. In particular, the rules upon which branches of foreign entrepreneurs are liquidated will be specified more precisely. So far, they are not quite clear and some registry courts have refused to remove from the National Court Register branches of foreign entrepreneurs from the EU Member States for which a liquidation procedure has not been carried out in accordance with the regulations on liquidation of a limited liability company, but a branch was dissolved in a simplified manner (on the basis of a resolution of a foreign entrepreneur). This practice is in breach of the EU principle of freedom of esbtablishment and the new act explicitly states that the regulations on liquidation of a limited liability company do not apply to the liquidation of branches of foreign entrepreneurs from the EU Member States.

The legislation constituting the Morawiecki Package will become effective as of 30 April 2018.