Profit Distribution in a Limited Liability Company (sp. z o.o.)

Holding shares in the company and making contributions entitles shareholders to participate in the company’s profits. A shareholder has the right to participate in the profit resulting from the annual financial statements and allocated for distribution by a resolution of the shareholders’ meeting. Profits are distributed in proportion to the shares unless the agreement states otherwise.

Remember: A company’s profit for a specific financial year can be discussed when the company’s balance sheet shows an excess of assets over liabilities. The profit available for distribution among shareholders is the so-called net profit, which is the amount remaining after deducting taxes.

Profit distribution is determined by a resolution of the shareholders’ meeting. In making this resolution, shareholders decide whether the profits earned by the company will be used for further development of the company’s business or distributed as payments to the shareholders.

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