Reporting obligations in limited liability companies:
Limited liability companies, public limited companies and simple joint-stock companies maintain full accounts regardless of their revenue and are required to prepare annual financial statements, comprising:
- a balance sheet, showing the value of assets and liabilities as at the balance sheet date;
- a profit and loss account, showing the financial result for the financial year;
- a cash flow statement, detailing the sources and uses of cash;
- notes to the financial statements, containing a description of the accounting policies adopted, explanations of items in the financial statements and other information necessary for a fair assessment of the company’s financial position and performance.
The Management Board attaches a narrative report on operations to the annual financial statements, serving as a detailed assessment of projected cash flows. This document should refer to the strategic objectives adopted by the company, present an assessment of its financial position, identify key risks and indicate prospects for development. The description should also cover the proceedings of shareholders’ meetings or general meetings of shareholders, as well as the resolutions adopted, which have shaped the company’s results and financial position as presented in the financial statements.
From 2025, ESG reporting based on the CSRD has become a key element of capital companies’ reports. The sustainability report constitutes a separate section of the management report and includes, amongst other things, a double materiality analysis (the company’s impact on its environment and vice versa) as well as climate and social objectives.
It should be noted that, as a rule, the management report is not signed by the person entrusted with keeping the accounts, even if its content was in fact prepared by them. Both the financial statements and the management report must be approved by the shareholders’ meeting or the general meeting of shareholders within six months of the end of the financial year. Subsequently, within 15 days of approval, the complete set of documents must be submitted electronically to the National Court Register.
Reporting obligations in partnerships:
For partnerships, reporting obligations are generally less extensive. General partnerships and professional partnerships whose net revenue does not exceed the thresholds specified in the Accounting Act are exempt from the obligation to maintain full accounts and submit financial statements – they may keep simplified records in the form of a tax revenue and expenditure ledger. However, if the partners or the management board decide to keep accounting records, the company is required to prepare and submit financial statements in accordance with general principles.
It is worth noting that in the case of general partnerships and limited partnerships where the partners are exclusively natural persons, an activity report is not required at all. Even if the company has prepared such a report, this information is not subject to disclosure in the National Court Register (KRS).
The impact of micro-entity and small-entity status on reporting obligations
Entities with the status of a micro-entity or small entity, although their legal form generally imposes an obligation to prepare a report on operations and submit it to the registry court, are exempt from this requirement. In the case of micro-entities, this legislative measure was justified by the limited scale of micro-entrepreneurs’ operations. In the case of small entities, exemption from preparing an activity report is possible provided that the notes to the financial statements disclose information regarding own shares, including the number and nominal value of shares acquired and disposed of during the financial year.
However, if a micro or small entity decides to prepare an activity report, a simplified form may be used. Such a report may be limited to presenting:
- key events affecting the entity’s operations,
- development plans, including research and development activities,
- an assessment of the current financial position and forecasts,
- detailed information on transactions involving own shares,
- information on financial instruments and financial risk management methods.
Additional reporting obligations – who are they applicable to?
The additional obligations primarily apply to entities belonging to capital groups that prepare consolidated financial statements as a joint report of the entities forming the capital group. In accordance with the provisions of the Commercial Companies Code, companies forming part of a capital group are required to submit reports on contractual relationships between the parent company and its subsidiaries. In addition, members of a so-called group of companies are required to disclose and document the implementation of a common strategy, as well as any instructions issued by the parent company.
Reporting obligations have also been further extended in relation to financial institutions, such as banks. Article 111a of the Banking Act imposes, amongst other things, an obligation to publish detailed data concerning foreign operations, remuneration policy, risk management systems and financial support agreements entered into. These obligations are subject to supervision by the Polish Financial Supervision Authority.
Failure to comply with reporting obligations – what are the consequences?
Failure to comply with or delay in fulfilling reporting obligations may lead to serious legal, financial and reputational consequences. The law provides for a range of sanctions against businesses that fail to submit the required documents on time, provide data inconsistent with the facts, or fail to fulfil their reporting obligations to public authorities altogether. Particular attention should be paid to the obligation to submit financial statements, which is a statutory requirement – failure to comply may result not only in the initiation of enforcement proceedings but is also subject to criminal sanctions.
The significance of submitting financial statements is also evident in the fact that failure to submit these documents for two consecutive financial years, despite a summons from the registry court, constitutes grounds for initiating proceedings to dissolve the company without liquidation.
With regard to civil liability**, Article 293 of the Commercial Code and Article 483 of the Commercial Companies Code provide a basis for holding members of the company’s management board directly liable**. According to their wording, a member of the management board is liable to the company for damage caused by an act or omission contrary to the law or the provisions of the articles of association, unless he or she is not at fault. The liability of management board members may therefore extend to situations where unreliable or non-transparent reporting has resulted in erroneous business decisions on the part of trading partners.
An entrepreneur’s reporting obligations – Summary
The scope of reporting obligations is not uniform for all businesses. It depends primarily on the legal form, as well as on the size of the entity, measured by criteria such as total assets, net revenue and workforce. The legislator provides for different levels of reporting obligations depending on whether the entity is a micro, small, medium or large enterprise. Correct classification of the business and ongoing verification of its status are key to ensuring compliance with applicable regulations.
Frequently asked questions
What exactly comprises the annual financial statement of a limited liability company?
The statement consists of a balance sheet, profit and loss account, cash flow statement, and additional information. A descriptive report on business activities is also attached to complete the set.
Who must sign and approve the financial statement of a capital company?
The documents are not signed by the person maintaining the books, they must be approved by the shareholders’ meeting or general meeting of shareholders. Approval takes place within six months from the end of the financial year.
Must general partnerships and limited partnerships always file complete financial statements?
No, if their revenues do not exceed statutory thresholds, they may maintain simplified records and are exempt from full accounting. This obligation arises only when partners or management decide to maintain full accounting books.
What consequences are threatened for failure to file financial statements for two years?
Failure to file documents for two consecutive financial years after summons by the registry court is grounds for initiating proceedings to dissolve the company without liquidation. This may also result in criminal sanctions and civil liability of management board members.
Must capital companies report ESG matters from 2025?
Yes, ESG reporting has become an essential element of capital companies’ reports based on the CSRD directive. The sustainability report forms part of the management report and contains double materiality analysis and climate objectives.
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