Agio (share premium) is an important element of the capital structure of an sp. z o.o. (limited liability company), and it needs to be recognised properly in the accounting books. The excess of the value of a contribution made to the company over the nominal value of the shares taken up is common in all kinds of capital companies and is particularly important for the company's accounting to work properly. Equity entries, including those on share capital and premium, are part of the books kept by our accounting firm in Warsaw.
Settling agio correctly is crucial both for the shareholders and for the company itself, as it affects the structure of equity and future options for distributing profit. The provisions of the Commercial Companies Code (Kodeks spółek handlowych, KSH) and the Accounting Act set out precisely how such excesses are to be treated, requiring them to be recognised appropriately in the accounting books.
Definition and legal basis of agio in an sp. z o.o.
Agio is defined as the excess of the price at which shares are taken up over their nominal value, arising when shares are taken up at a price higher than their nominal value. Under the Commercial Companies Code, shares cannot be taken up below their nominal value, but they can be taken up at a higher price.
Article 154 § 3 of the Commercial Companies Code states clearly that shares cannot be taken up below their nominal value. If a share is taken up at a price higher than its nominal value, the excess is transferred to the company's supplementary capital
The mechanism by which agio arises is closely linked to the principle of protecting the company's share capital. Regardless of how much cash is actually paid in or how many contributions in kind are made to a limited liability company, only the part of the contributions that corresponds to the nominal value of the shares taken up by a given shareholder goes to share capital.
The excess over the nominal value is automatically transferred to the company's supplementary capital, which is a mandatory mechanism provided for by the legislator. This solution is intended to protect the interests of the company's creditors and to keep its capital structure stable.
The supplementary capital of a limited liability company is a fund shown as a separate item under equity and liabilities in the company's balance sheet. Agio transferred to supplementary capital increases the company's equity and has a positive effect on its financial condition
Booking agio on cash contributions
Booking agio arising from cash contributions requires appropriate accounting entries that reflect the economic substance of the transaction. The booking process involves splitting the amount paid in into the part corresponding to the nominal value of the shares and the part that is the excess.
The basic accounting entry for agio on cash contributions is as follows:
- Debit account 243 "Settlements with shareholders" in sub-ledger records kept for each shareholder by name
- Credit account 811 "Supplementary capital (fund)"
Settlements with shareholders are kept in detailed sub-ledger records that make it possible to identify the individual shareholders and the amounts they have contributed. Each shareholder has an individual sub-ledger account on which all transactions related to their shares in the company are recorded
Booking agio requires the total amount paid in by the shareholder to be booked first to the account of settlements with shareholders. This amount is then split between share capital, in the amount corresponding to the nominal value of the shares, and supplementary capital, in the amount of the agio.
Booking agio correctly is important for the transparency of the company's financial statements and for compliance with the Accounting Act. Recognising agio incorrectly can lead to the structure of the company's equity being presented incorrectly in the balance sheet.
Agio from a contribution in kind – valuation and booking rules
Agio can also arise when a non-cash contribution, known as a contribution in kind (aport), is made to the company. This happens when the fair value of the contribution in kind exceeds the nominal value of the shares issued in exchange for it. Valuing the contribution in kind and booking the resulting agio require particular care and set procedures.
Under the Commercial Companies Code, if the contribution to the company is to be wholly or partly non-cash, the articles of association should specify in detail the subject of the contribution and the shareholder making it, as well as the number and nominal value of the shares taken up in exchange.
Non-cash contributions to a limited liability company are valued by the shareholders at the value set out in the agreement on the contribution in kind. The company receiving the contribution in kind values the assets and liabilities at fair value in line with the Accounting Act
The fair value of a contribution in kind is the amount for which an asset could be exchanged in an arm's length transaction between interested, well-informed and unrelated parties. In practice, a property valuer is often needed to determine the fair value of the assets contributed.
Booking agio from a contribution in kind involves the following steps:
- Booking the contributed asset at fair value
- Settling the liability to the shareholder against share capital
- Transferring the excess to supplementary capital as agio
- Updating the sub-ledger records of settlements with shareholders
- Preparing the relevant accounting documents
The difference between the fair value of the contribution in kind and the nominal value of the shares issued is agio, which under the Commercial Companies Code must be transferred to the company's supplementary capital
Practical example of booking agio from a contribution in kind
A practical example of booking agio from a contribution in kind helps to understand how the process works. Consider a limited liability company that rents out commercial property, to which a shareholder contributes a property in kind.
In this case, the shareholder contributed a property in a city centre to cover shares with a nominal value of PLN 700,000. The fair value of the contributed property, according to a property valuer's valuation, is PLN 1,200,000. The resulting agio of PLN 500,000 must be recognised appropriately in the accounting books.
A limited liability company specialising in commercial property received an office building from a shareholder as a contribution in kind. The fair value of the property significantly exceeded the nominal value of the shares issued, which resulted in substantial agio. Thanks to this contribution in kind, the company was able to start operations immediately without having to buy property for cash.
Booking the contribution in kind requires three basic accounting entries:
| Accounting transaction | Debit account | Credit account | Amount |
|---|---|---|---|
| Receipt of the property | 010 Fixed assets | 243 Settlements with shareholders | PLN 1,200,000 |
| Share capital | 243 Settlements with shareholders | 800 Share capital | PLN 700,000 |
| Agio | 243 Settlements with shareholders | 811 Supplementary capital | PLN 500,000 |
The first accounting entry reflects the receipt of the property into the company's assets at the fair value set by the valuer. At the same time, a liability to the shareholder arises in the same amount, which is then settled against share capital and supplementary capital
The second accounting entry settles the part of the liability to the shareholder that corresponds to the nominal value of the shares issued. This amount goes to the company's share capital, increasing it by the nominal value of the newly issued shares.
The third accounting entry transfers the excess that constitutes agio to the company's supplementary capital. This operation is mandatory under the Commercial Companies Code and is intended to reflect the structure of the company's equity properly.
Presenting agio in the company's balance sheet
Presenting agio properly in the balance sheet of a limited liability company requires knowledge of the Accounting Act and the rules for preparing financial statements. Agio recognised in the accounting books on account 811 "Supplementary capital (fund)" is presented in a specific balance sheet item. Another item that calls for careful presentation is term deposits in the balance sheet.
In a balance sheet prepared according to Annex 1 to the Accounting Act, agio is shown under equity and liabilities in item A.II "Supplementary capital (fund)". In addition, the amount of agio is shown separately in an additional line to this item, labelled "excess of the sale value (issue value) over the nominal value of shares".
Showing agio in a separate line of the balance sheet is intended to make the financial statements more transparent and to help their users better understand the structure of the company's equity
The presentation of agio in the balance sheet affects how various stakeholders assess the company's financial condition. High agio may indicate that the company is attractive to investors who were willing to pay more than the nominal value of the shares.
An equity structure that includes substantial agio may also affect future decisions on distributing profit. Supplementary capital, including agio, can be used to cover the company's losses or to increase share capital by conversion.
- Agio increases the company's equity
- It improves capitalisation-related financial ratios
- It can act as a financial buffer in difficult periods
- It may have a positive effect on the assessment of creditworthiness
- It provides flexibility in managing the capital structure
Agio and CIT
Whether agio is subject to CIT (corporate income tax) often raises doubts among practitioners. The key question is whether the excess received by the company over the nominal value of the shares should be taxed as the company's taxable revenue. Surpluses revealed in a stocktake are taxed differently — we explain this in our article on accounting for inventory shortages and surpluses.
The tax authorities' position on this issue is clear and favourable to taxpayers. The excess received by a limited liability company over the nominal value of shares and transferred to the company's supplementary capital is not taxable revenue for the company. This rule applies both to agio arising from cash contributions and to agio arising from contributions in kind.
The legal basis for excluding agio from taxation is Article 12 section 4 point 11 of the CIT Act. This provision refers directly to amounts and values constituting the excess over the nominal value of shares
In an individual tax ruling of 11 September 2026 (no. 0111-KDIB2-1.4010.394.2026.4.KW), the Director of National Tax Information (KIS) confirmed that the excess over the nominal value of shares may be transferred to supplementary capital within the meaning of Article 12 section 4 point 11 of the CIT Act also as a result of a contribution in kind — so the exclusion from taxation covers both cash agio and agio from contributions in kind. The condition for this exclusion is that the agio is transferred to the company's supplementary capital in line with the Commercial Companies Code.
The exclusion of agio from taxable revenue applies only where the excess is transferred in full to the company's supplementary capital as required by the Commercial Companies Code. Any other use of this excess may give rise to taxable revenue
The favourable tax treatment of agio is important for planning the capital structure of companies and for shareholders' investment decisions. As the company has no tax liability, the whole excess can be used for development purposes or as a capital reserve.
Differences between agio and additional payments to capital
Distinguishing between agio and additional payments (dopłaty) to capital is fundamental for correct booking and for understanding the structure of the company's equity. Although both increase supplementary capital, their legal and accounting nature is different.
Agio arises only when new shares are taken up at a price higher than their nominal value. It is an excess that must automatically be transferred to supplementary capital under the Commercial Companies Code. The shareholder has no choice as to how this excess is used.
Additional payments to capital, on the other hand, are payments by shareholders to the company that are not linked to taking up new shares. The obligation to make additional payments must be provided for in the articles of association, and their amount and dates are set by a shareholders' resolution (Articles 177 and 178 KSH). Additional payments serve to strengthen the company's financial position and may be repayable or non-repayable, depending on the provisions of the articles of association. The returnable/non-returnable distinction also comes up in a quite different context: returnable and non-returnable pallets in the KPiR.
Repayable additional payments to capital are a liability of the company to its shareholders and are shown under equity and liabilities in the balance sheet as long-term or short-term liabilities. Non-repayable additional payments, on the other hand, increase the company's supplementary capital, just like agio
The differences in the accounting treatment of agio and additional payments to capital result from their different legal nature:
| Aspect | Agio | Additional payments to capital |
|---|---|---|
| Basis | Taking up shares above nominal value | Articles of association and shareholders' resolution |
| Mandatory nature | Automatic transfer to supplementary capital | Depends on the articles of association |
| Repayability | Non-repayable by law | May be repayable or non-repayable |
| When it arises | When shares are issued | At any time |
Agio when increasing share capital
Increasing the share capital of a limited liability company often involves agio, especially when the company is in good financial condition and has development prospects. New or existing shareholders taking up additional shares may be willing to pay more than the nominal value, taking into account the value of the business and the future benefits of the investment.
Increasing capital with agio requires particular care when drafting the shareholders' resolution and the articles of association. These documents should precisely set out the issue price of the new shares and the amount of agio arising, which by law goes to supplementary capital.
A shareholders' resolution to increase share capital should include information on the issue price of the new shares and the amount of the expected agio. Setting these parameters precisely helps prevent later disputes between shareholders
Booking agio when increasing capital follows the standard rules, but requires particular care in keeping the sub-ledger records of settlements with shareholders. Each shareholder taking up new shares should have their sub-ledger records updated accordingly.
The impact of agio on the company's ownership structure can be significant, especially when different shareholders take up shares at different issue prices. Such a situation requires precise records of shares and their book value.
Checking that agio has been booked correctly
The correctness of agio bookings is checked both by the tax authorities and by statutory auditors (biegli rewidenci) examining the financial statements. The review covers compliance with the law and the correctness of the accounting solutions applied.
Key areas of review include:
- Compliance of the valuation of the contribution in kind with the Accounting Act
- Correct split of payments between share capital and supplementary capital
- Completeness of accounting and legal documents
- Compliance with the articles of association
- Proper presentation in the financial statements
Documents relating to agio should include the articles of association, shareholders' resolutions, valuation documents for the contribution in kind and complete accounting records. A lack of proper documents may result in the inspection authorities challenging the correctness of the bookings
The inspection authorities pay particular attention to the valuation of non-cash contributions and the justification of the fair value adopted. Where there are significant differences between the nominal value of the shares and the value of the contribution in kind, additional evidence confirming the correctness of the valuation may be needed.
Statutory auditors examining companies' financial statements also check that agio is presented correctly in the balance sheet and in line with the Accounting Act. Errors in presentation may result in an audit report with qualifications.
