Table of contents:
- What was ZUS’s position?
- A breakthrough in 2021?
- Will the resolution dispel doubts?
On February 21, 2024, the Chamber of Labor and Social Insurance of the Supreme Court, composed of 3 judges, adopted a resolution in case no. III UZP 8/23, which answers a legal question posed by the Court of Appeal in Lublin. The Court of Appeal in Lublin asked whether a partner in a two-person limited liability company, holding 99% of the shares allowing them the freedom to shape resolutions at the shareholders’ meeting and make decisions regarding the company’s operations, is subject to social insurance contributions under Article 6(1)(5) in conjunction with Article 8(6)(4) of the Act of October 13, 1998, on the social insurance system?
According to the Supreme Court, a partner in a two-person limited liability company holding 99% of the shares does not fall under social insurance contributions pursuant to Article 6(1)(5) in conjunction with Article 8(6)(4) of the Act of October 13, 1998.
What was ZUS’s position?
In its previous decisions, ZUS maintained that a partner in a two-person limited liability company, who holds shares granting them the right to independently decide on the outcomes of the shareholders’ meeting and almost exclusive right to profits, and who, due to acting as the sole management board member, has unrestricted authority to decide on the company’s current operations, is subject to social insurance contributions as a non-agricultural business operator (Article 8(6)(4) of the systemic act). This position was also confirmed by the common courts and the Supreme Court in several rulings, stating that it would be incorrect to rely solely on a literal interpretation of Article 8(6)(4) of the systemic act and to conclude that such a partner in a limited liability company is not subject to the obligation of social insurance solely because they are not formally a sole shareholder in a limited liability company.
A breakthrough in 2021?
The Supreme Court departed from such an interpretation in its judgment of September 15, 2021, case no. I USKP 44/21 (OSNP 2022 No. 9, item 91), accepting that obligatory pension and disability insurance applies only to the sole shareholder of a single-person limited liability company, and not to a majority shareholder, even if they are “almost” or “nearly” the sole shareholder (Article 6(1)(5) in conjunction with Article 8(6)(4) of the systemic act in conjunction with Article 4 § 1 point 3 of the Commercial Companies Code). In the reasoning of this judgment, the Supreme Court argues that according to Article 8(6)(4) of the systemic act, a non-agricultural business operator is considered to be a sole shareholder in a limited liability company as well as partners in a general partnership, limited partnership, or partnership. The systemic act does not define a single-person limited liability company. However, there is a legal definition of a single-person company included in Article 4 § 1 point 3 of the Commercial Companies Code. The interpretation reasoning of the judgment I USKP 44/21 was consistent with numerous decisions of the common (appellate) courts, which favored a strict literal and systemic interpretation of the provisions, which de facto also underlay the judgment of I USKP 44/21. In view of the divergent case law positions, the Court of Appeal in Lublin decided to refer the question to the Supreme Court, which adopted the resolution mentioned at the beginning.
Will the resolution dispel doubts?
It seems that the resolution of the Supreme Court dated February 21, 2024, should dispel all previous doubts. A partner in a two-person limited liability company is not subject to mandatory social insurance contributions under Article 8(6)(4) of the systemic act as a sole shareholder in a single-person limited liability company, even if they are a majority shareholder, “almost” or “nearly the sole shareholder.” However, time will tell how ZUS will interpret the resolution.
