After 3-monthly vacatio legis 25 November This year the Act on the Successive Management of a Natural Person entered into force. The legislator made changes in the regulations that allow the continuity of the existence of the Polish company in the event of the death of its owner. A new institution of the succession manager was introduced, and rules on the company's activities in tax decline were regulated.
According to the current legal situation after the death of the entrepreneur, the possibility of carrying out ongoing activities within the company, such as the sale of goods and the provision of services and the regulation of obligations to employees or contractors, was severely limited.
With the death of the entrepreneur, the legal existence of his business could have resulted, for example, in the immediate loss of employment by the employees of the company, the expiry of certain civil law contracts or the obligation to reimburse the subsidies which the entrepreneur received for economic purposes.
This significantly reduced the possibility for the company's successor to the legal successor to the entrepreneur after the succession.
The scope of the tax obligation for the company in decline was determined on the same terms as for the deceased entrepreneur at the opening date of the inheritance
Necessary changes in company name
The new law introduces the possibility of managing the company as well as continuing the business activity of the deceased entrepreneur, pending the completion of the succession procedure, but in a period not longer than 2 years. For important reasons, the court will be able to extend this period up to 5 years.
The company will now be able to continue to operate unchanged, subject to changes in the company's name to which it will have to be added "in decline". Consequently, the continuation of the business, which will continue to generate profits, will preserve jobs and regulate obligations towards counterparties and public-law obligations.
In addition, the chances of further development of the company, sometimes built by the efforts of the entrepreneur and his family members, will be increased for many years.
Success in the hands of the steward
The responsibility of taking care of the interests of the company after the death of the entrepreneur is to rest on the manager of the successive, i.e. the temporary manager of the company in decline.
The administrator may be appointed both during life and after the death of the entrepreneur, subject to the submission of adequate consent to this function and entry in the CEIDG.
In order to appoint a succession manager, after the death of the entrepreneur, it will be necessary to act or agree with the persons who became owners of the company as a result of the death of the entrepreneur (they will be heirs to the bill, will or will) as well as the spouse who holds the right to the company for the property of the marriage.
In all of the above cases, it will be necessary to maintain the form of notarial act in order to appoint a succession manager after the death of the entrepreneur.
Due to the specific temporary nature of the succession board, at the latest on expiry two months from the date of the death of the owner of the company, it should be determined whether the management will be established or whether it is the will of persons entitled to operate the succession board established at the initiative of the entrepreneur.
A succession manager may be a natural person with full legal capacity. Since the establishment of the Successive Board, the Successive Board may exercise the property rights and obligations of the deceased entrepreneur in matters arising from running the business in decline.
The Successive Management Board is not established until the entry into CEIDG of the Successive Management Board appointed by the entrepreneur in life or the reservation that the proxy will become a Successive Manager after the death of the entrepreneur.
Unlike the D.A., the succession board includes not only the right to judicial and out-of-court proceedings relating to the firm's inheritance, but also the obligation to conduct the company in decline. The function of the succession administrator includes obligations, including in the field of tax law.
Company in decline as taxpayer
The company will receive tax liability as an organisational entity without legal personality in the field of taxation related to its business activities (in particular, income tax, VAT and excise duty).
This solution will ensure continuity in the regulation of taxes related to the company's activities in decline during the succession management period, for the benefit of the State Treasury. In this case, the NIP will also remain unchanged, which in turn will ensure the continuation of the settlement of all business taxes.
The scope of the tax obligation for the company in decline was determined on the same terms as for the deceased entrepreneur at the opening date of the inheritance. As regards the tax year in which the entrepreneur died, the company will continue to tax by the end of that year according to the form chosen by the deceased.
Furthermore, the company will be required to draw up a list of the components of the company at the date of the opening of the inheritance. The company will not be able to choose to make advances in a simplified form. It will also not be able to choose the so-called tax credit.