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Branch and representative office of the company - how is it different?

Each commercial company must have its headquarters - this is where the management and decision-making center is located. Of course, companies may be different, this also applies to their size and scope of activity. In the case of large entities, they may operate through their branches and representative offices. Are the branch and the company's representative office the same concepts? We answer in the article!

Office of the company

The current regulations require that every partnership and capital company has a registered office. In fact, this concept has been defined not in the Code of Commercial Companies, but in the Civil Code. Pursuant to Art. 41 of the Civil Code, unless the law or the statute based on it provides otherwise, the seat of a legal person is the place where its management body is located.

The seat of the company is actually the city where its governing body is located. We can compare it to a command center where appropriate resolutions are passed and appropriate factual and legal actions are taken. In the case of small companies, they really only operate on the basis of an established seat, which may of course be changed over time. Remember that the seat is only the city, not the address at which the company operates. It is true that providing the name of the street and its number is obligatory to register a given entity, but these data do not fall within the scope of the company's registered office.

The extended activity of the company

We already know that each company must operate on the basis of its headquarters designated for itself. By law, each legal entity may have only one seat, which may be changed. It is forbidden to have two or more of them. Were it not for the representative offices and branches, such a solution would be very problematic. Some companies conduct business activity in a really wide range, also touching other countries around the world. Having one central seat would be impractical due to the emerging communication difficulties between the company and its contractors from different parts of the country and the world. Therefore, the legislator allowed the establishment of branches and representative offices which, although they cannot be identified with the seat of a given entity, are very helpful in carrying out extended activities.

Branches and representative offices of companies can be compared to the delegated points of a legal entity that represent its interests away from the headquarters. At the same time, they are equipped with a number of competences that allow them to make current decisions related to cooperation with the company's contractors. In other words, people wishing to act with a given company do not have to go to its headquarters to establish any commercial relationship or to perform the intended legal transaction. Branches and representative offices belong to the company's organizational structures, although there is no obligation to separate them.

Company branch

Pursuant to Art. 3 point 4 of the Act on the principles of participation of foreign entrepreneurs and other foreign persons in economic turnover on the territory of the Republic of Poland, a branch means a separate and organisationally independent part of business activity performed by the entrepreneur outside the entrepreneur's seat or the main place of business. The branch is therefore a copy of the seat, albeit of a much lower rank - it is simply the place where a given company operates, but it is not its head office.

Branches of companies can also be established for foreign entrepreneurs, i.e. those whose registered office is outside the territory of the Republic of Poland. According to Art. 14 above of the Act, for the pursuit of economic activity in the territory of the Republic of Poland, foreign entrepreneurs from the Member States may establish branches based in the territory of the Republic of Poland. Foreign entrepreneurs other than those specified above may, in order to conduct business activity in the territory of the Republic of Poland, on the basis of reciprocity, unless ratified international agreements provide otherwise, establish branches based in the territory of the Republic of Poland.

In order for a branch to legally start its operations and effectively perform legal acts in the name and for the benefit of its parent company, it must be entered in the register of entrepreneurs of the National Court Register. For this purpose, it is necessary to submit a registration application on the KRS Z3 form, KRS-ZA form, a resolution of the company's management board to establish a branch and payment of a court fee in the amount of PLN 350. The complete set of documents should be submitted to the registry court (district court, economic department of the National Court Register), where the files of the company are kept. In the case of online reporting of a branch (e.g. for limited liability companies established in the S24 mode), a resolution on establishing a branch of the company and the KRS ZEL3 form will be needed, the court fee in this case is lower and amounts to PLN 300.

In the case of foreign entrepreneurs who decide to establish a branch of their company in Poland, additional requirements must be met, because you must:

appoint a person authorized in the branch to represent the foreign entrepreneur;
use the original name of the foreign entrepreneur to designate a branch, together with the name of the entrepreneur's legal form translated into Polish and the words "branch in Poland";
keep separate accounting for the branch in Polish in accordance with the accounting regulations;
report to the minister competent for economy any changes in the factual and legal status, e.g. in a situation where the liquidation of a foreign entrepreneur has been opened or the entrepreneur has lost the right to conduct business activity.

Company representation

Representation is in nature similar to a branch of a company, with the main difference that it has a much smaller scope of powers. In fact, it is established to represent the company in terms of promotion and advertising of its services or products. A representative office cannot function like a branch, it does not incur obligations with current or new contractors - we can compare them to a point promoting a given company.

Representative offices are established primarily by foreign companies - in order to promote their activities in Poland (or any other country in the world). So we can see that their role is basically limited to the representative function without the practical possibility of taking any effective legal actions. Pursuant to Art. 23 and 24 of the discussed act, a representative office may also be established and run by foreign persons appointed by an act of the competent authority of the state of their seat to promote the economy of that state, provided that the scope of activities of such a representative office may only include promotion and advertising of the economy of that state. Establishing and running a representative office requires an entry in the register of representative offices of foreign entrepreneurs kept by the minister. Establishing and running a representative office by a foreign bank or credit institution within the meaning of the Act of August 29, 1997 - Banking Law does not require an entry in the register of representative offices.

Entry in the register of representative offices is made on the basis of the submitted application and in accordance with its content. It is made for a period of 2 years from the date of entry. At the request of a foreign entrepreneur - submitted within the last 90 days of the validity of the entry - the entry is extended for another period of 2 years. The application for entry is made in Polish and should contain:

name, seat and legal form of the foreign entrepreneur;
the subject of the main economic activity of a foreign entrepreneur;
name and surname of the person authorized in the representative office to represent the foreign entrepreneur;
the address of the seat of the representative office in the territory of the Republic of Poland.

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The application must be accompanied by:

an official copy of the document confirming the registration of a foreign entrepreneur, on the basis of which the entrepreneur carries out economic activity;
an officially certified document specifying the address of the seat of the foreign entrepreneur, the rules of representing the foreign entrepreneur and an indication of the persons authorized to represent it, if the document referred to above does not contain the necessary information in this regard;
a document confirming the authorization of the person indicated in the application to represent the foreign entrepreneur in the representative office, containing the name and surname of the authorized person, their date of birth, the names of their parents and the number of the identity document used by this person in the territory of the Republic of Poland, together with confirmation of acceptance of this authorization by an authorized person.

Branch and representative office of the company - summary

The company's branch and representative office are organizational forms of a legal person that allow it to operate outside its headquarters. They can be created in an unlimited number by both domestic and foreign companies. Branches have extensive legal and organizational competences (similar in scope to the powers of the company itself), and representative offices perform only representative functions. In each case, the establishment of a branch or representative office requires notification to the appropriate register.