Is Your Polish Startup Ready for Investment? A Legal and Operational Checklist

You receive a term sheet. The team celebrates and starts planning for growth. Then due diligence begins. The two founders have only a verbal agreement to split ownership 50/50. The company’s articles of association use a standard S24 template. Nobody is sure who has veto rights, and the cap table exists only in the CEO’s head. The investor gives you two weeks to put things in order, or walks away.

Would your company pass that test?

Investment readiness is not a product milestone or a polished pitch deck. It means your ownership structure, corporate governance, and records can withstand an investor’s review. According to PFR Ventures, the Polish venture capital market recorded 438 transactions worth a total of PLN 2.1 billion in 2023, compared with 148 transactions at the same total value in 2024. Competition for capital is increasing, and investors are quick to rule out companies that are not formally prepared.

This guide sets out what to address before investor discussions: the cap table, founder arrangements, intellectual property, governance, tax structure, and, in some cases, the choice of company or investment vehicle.

Terms to Know Before Speaking With an Investor

In this article, sp. z o.o. means a Polish limited liability company. Its constitutional document is referred to as the articles of association. KRS is Poland’s National Court Register, while KNF is the Polish Financial Supervision Authority.

What Due Diligence Exposes

An investor assesses more than the product and commercial traction. They also need to know whether the company’s structure permits a secure investment and a future exit. Several recurring gaps can undermine confidence.

An Unclear Cap Table

An investor expects a current, unambiguous account of ownership. If you cannot identify each shareholder’s holdings, the preferences attached to them, and any informal promises of equity, discussions may stop.

In a sp. z o.o., Article 174 of the Polish Commercial Companies Code governs share preferences. They may concern voting rights, up to three votes per share, dividends, up to 150% of the dividend on an ordinary share, and participation in the distribution of assets. Each preference must be included in the articles of association.

No Written Arrangements Between Founders

Consider two founders who own a company 50/50 without a founders’ agreement. After two years, one wants to leave. There is no exit process, reverse vesting, or buyback arrangement. Neither can force the other to sell their shares or remain, and the company reaches a standstill.

For an investor, unwritten founder arrangements signal the risk of a shareholder dispute at precisely the point when the business needs to grow.

Articles of Association Based on an S24 Template

S24 is a Polish online company-registration system. The registration fee is PLN 350, and registration can take a few days. A company formed using its standard template cannot use that template to introduce provisions an investor may require, including share premium (agio), drag-along and tag-along rights, share preferences, transfer restrictions, or changes to quorum and voting majorities. Those provisions require a notarial deed.

If your articles still use the template, address that before treating the company as investment-ready.

Unresolved Intellectual Property Ownership

Code, know-how, and trademarks may account for much of a startup’s value. If the relevant rights have not been formally transferred to the company, an investor will see a risk to that value. Check whether agreements with developers and subcontractors clearly transfer copyright to the company.

Outstanding Corporate Formalities

Missing minutes of shareholders’ meetings, unfiled financial statements, and outdated KRS information all lengthen due diligence and call the management board’s professionalism into question.

Contact us if you want to identify documentation gaps before investor discussions.

Put the Ownership Structure in Order

Audit the Cap Table

Verify who owns each share, what preferences attach to it, whether any shareholders have personal rights under Article 159 of the Commercial Companies Code, and what the articles say about share transfers. Record informal equity promises as well.

Personal rights attach to a named shareholder rather than to a share. They must be precisely described in the articles of association; otherwise, they are ineffective against the company. Examples include the right to appoint a management board member, a veto over specified decisions, and expanded information rights. Unlike share preferences under Article 174, they do not pass to a buyer of the shares.

Put Founder Understandings in Writing

If the founders have verbal understandings about responsibilities, equity, or departure, document them. A founders’ agreement should address:

1. Each founder’s role and responsibilities.
2. A vesting or reverse-vesting schedule.
3. What happens when a founder wants to leave.
4. The price and process for a buyback by the company or remaining founders.
5. Dispute resolution, such as escalation, mediation, or arbitration.

Model Future Dilution

Show founders and potential investors how ownership could change after a seed round, a Series A round, and an ESOP, an employee incentive plan. Understanding dilution also helps founders negotiate.

The model should cover at least two or three successive rounds and account for:

• A seed investment at a specified valuation.
• A Series A round with a new investor and valuation.
• An ESOP pool, typically 10-15% of shares reserved for the plan.
• The effect of anti-dilution protections on founders’ holdings.

Design Governance for the Funding Round

Governance determines who can make which decisions. Poorly drafted rules can obstruct daily management after an investor joins. Well-designed rules protect the investor’s position without bringing operations to a halt.

Define Reserved Matters Precisely

Article 228 of the Commercial Companies Code lists matters requiring a shareholders’ resolution, including approval of reports, profit distribution, discharge of governing-body members, and disposal of real estate. Article 246 § 1 requires a two-thirds voting majority to amend the articles or dissolve the company, and a three-quarters majority for a material change in its business activities.

The articles may extend the matters requiring approval. Investor agreements commonly address:

1. Incurring liabilities above a specified amount.
2. Issuing new shares.
3. Selling significant assets.
4. Contracting with related parties.
5. Borrowing or providing security.
6. Changing the business profile.
7. Starting high-value litigation.

Failure to obtain a required resolution renders a transaction invalid under Article 17 of the Commercial Companies Code. That makes precise drafting of the approval requirements essential.

Understand Investor Protections

Each mechanism needs a basis in the articles of association to have corporate effect. A provision appearing only in an SHA or investment agreement creates contractual claims against its parties, not direct rights against the company. The articles and SHA therefore perform different jobs and should be designed together.

Use Share Redemption for Good-Leaver and Bad-Leaver Rules

Article 199 of the Commercial Companies Code governs redemption of shares in a sp. z o.o.. The articles must contain appropriate provisions. The three methods are:

• Voluntary redemption: The shareholder consents and the company acquires the shares.
• Compulsory redemption: The shareholder’s consent is not needed, but the grounds and process must be precisely stated in the articles.
• Automatic redemption: An event specified in the articles triggers redemption.

Startup arrangements may use voluntary redemption at market price for a good leaver, such as someone departing for justified reasons. A bad leaver, such as someone leaving in breach of an agreement or competing with the company, may face compulsory redemption at a lower price, but not below the minimum under Article 199 § 2: the net asset value attributable to the share.

Vague grounds for compulsory redemption invite disputes and may be challenged in court.

Review the Tax Structure of the Investment

The way capital enters the company affects transaction costs and tax treatment. Check at least three areas.

Tax on Civil Law Transactions: PCC

PCC is charged at 0.5% on the value of a share capital increase, rather than the entire investment. For example, if an investor contributes PLN 1 million, with PLN 50,000 allocated to share capital and PLN 950,000 to agio, share premium above the shares’ nominal value, the stated PCC calculation is 0.5% × PLN 50,000 = PLN 250.

Corporate Income Tax on Capital Contributions

Article 12(4)(4) and (11) of the Polish CIT Act excludes contributions to share capital and share premium above nominal share value from taxable revenue. As a rule, the investor’s payment into those categories therefore does not generate taxable revenue for the company.

There is an important qualification: an interpretation by Poland’s National Revenue Information Service indicates that a contribution to supplementary capital without a share capital increase may generate CIT revenue. Have the proposed investment structure reviewed for tax purposes.

The IP Box

Article 24d of the CIT Act provides a 5% CIT rate for qualifying income from intellectual property developed through research and development. Potential rights include copyright in computer programs, patents, and utility models.

The company must keep records that identify income from each qualifying IP right separately and apply the nexus ratio. For a technology startup developing software in-house, the IP Box may materially reduce the effective tax rate and improve its investment case.

Consider Whether an ASI Investment Vehicle Is Relevant

An alternatywna spółka inwestycyjna (ASI), an alternative investment company, is a vehicle governed by Poland’s Investment Funds Act. It collects assets from multiple investors and invests them under a defined investment policy. It is principally relevant to business angels, private-investor groups, and funds investing jointly in startups, rather than to an individual founder raising capital directly.

Permitted forms include a sp. z o.o., a Polish joint-stock company, a European company, a limited partnership, or a limited joint-stock partnership, with a corporate general partner for the partnership forms.

KNF Registration and Authorization Thresholds

An ASI manager, known as a ZASI, operating on the basis of registration submits annual reports to the KNF by January 31 of the following year, through the ESPI system in XML format.

Operational and Regulatory Risks

• Acting as a ZASI without the required registration exposes the entity to KNF administrative sanctions, including financial penalties, an order to stop operating, or a future ban on the activity.
• A poorly designed ASI can create substantial operational and regulatory burdens. As with non-public closed-end investment funds, a two-thirds voting requirement for a merger can be impossible to meet in many cases.
• An ASI may not raise financing from individuals other than professional clients under Article 8a(4) of the Act.

If an investor plans to invest through an ASI, or you are setting up a vehicle to pool capital from multiple angels, check whether the planned structure requires KNF notification, registration, or authorization before investor discussions.

Would a P.S.A. Be a Better Company Form?

A prosta spółka akcyjna (P.S.A.), or simple joint-stock company, was designed for businesses seeking outside capital. The P.S.A. differs from a sp. z o.o.:

1. Share capital from PLN 1, compared with PLN 5,000 for a sp. z o.o. and PLN 100,000 for a Polish joint-stock company.
2. No-par-value shares, allowing capital to be increased without amending the articles.
3. Founder shares, protecting a fixed proportion of founders’ votes despite new share issues.
4. Contributions of work or services instead of cash. These do not increase share capital, and the shareholder is subject to Polish ZUS social security contributions.
5. Share sales by email, without a notarial deed.
6. Easier incentive arrangements, with ESOP and vesting mechanisms built into the company structure.

Converting a sp. z o.o. into a P.S.A. takes approximately two to four months, with notarial costs of approximately PLN 1,500-2,000 and court fees of PLN 600. It does not require an auditor’s opinion. The company retains continuity, including its Polish tax identification number (NIP), permits, contracts, and credibility in the eyes of counterparties.

If your sp. z o.o. still has template articles and you expect multiple funding rounds, consider the conversion before approaching investors.

Investment-Readiness Checklist

Put the Structure in Order Before an Investor Asks

Resolving ownership and governance issues before a round is less costly than restructuring under time pressure, renegotiating a transaction, or dealing with a shareholder dispute. A weak structure can reduce a valuation, delay a round by months, or, in an extreme case, prevent it.

We help founders and startup management boards prepare for investment: auditing cap tables and articles of association, documenting founder relationships, and designing governance and investor protections around real transaction scenarios.

If you expect to raise capital in the coming months, contact us. We can assess what needs attention before you meet an investor.

Frequently Asked Questions

Should we fix the structure before investor discussions or after receiving a term sheet?

Before discussions. Investors assess organizational maturity from the first meeting. Fixing an unclear cap table, template articles, or unwritten founder arrangements after a term sheet is possible, but it happens under greater time pressure and with less negotiating leverage. Depending on the starting point, legal preparation takes several weeks to two or three months.

What documents should be ready for due diligence?

At minimum, prepare a current cap table; articles of association in notarial form rather than an S24 template; a founders’ agreement; a current KRS extract; filed financial statements; shareholders’ meeting minutes; and evidence of IP ownership, including developer agreements and copyright assignments. A dilution model covering two or three rounds and a term sheet template are useful additions.

Is a 50/50 founder split a problem?

It is a serious warning sign for an investor if there is no way to resolve a deadlock. A casting vote, escalation procedure, mediation, or arbitration mechanism should be considered and clearly documented in the founders’ agreement.

Do we need both articles of association and an SHA?

Yes. The articles govern the company’s structure, share rights, and resolutions, and have corporate effect. An SHA governs the shareholders’ contractual relationship, including exits, protections, veto arrangements, and dilution. It binds its parties rather than directly conferring rights against the company. The two documents should work together.

How long does legal preparation for a round take?

Usually several weeks to two or three months, depending on the existing records and agreements. Correcting template articles, a missing founders’ agreement, and an unclear cap table takes longer than tailoring established governance to a particular investor. If you also choose to convert a sp. z o.o. into a P.S.A., the conversion is estimated to add two to four months.

Does an ASI matter to me as a founder?

Usually not if you are simply raising investment into your startup. It matters if the investor will invest through an ASI or you are establishing a vehicle to collect capital from multiple business angels. In that case, check KNF requirements, registration and reporting obligations, and the applicable restrictions before proceeding.