What is the control under the Business Constitution?

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On April 30, 2018, the adopted Business Constitution came into force. It is a set of laws aimed at improving the conditions for the functioning of an enterprise in a market economy. As it is commonly known, entrepreneurs may be subject to control carried out by a specific state authority. In this regard, therefore, it is worth referring to the new Act on Entrepreneurs' Law, which describes how such an inspection, in accordance with the Business Constitution, can be carried out. In today's article, we will present the most important regulations in this area.

Control according to the Business Constitution - general principles

The issue of controlling an entrepreneur is fully regulated in Chapter 5 of the Entrepreneurs' Law. This chapter starts with Art. 45, which states that the control under the Business Constitution of entrepreneurs is carried out on the principles set out in this Act, unless the principles and procedure of control result from ratified international agreements or directly applicable provisions of European Union law. As a result, irrespective of which state unit carries out the control, it must apply and abide by the principles set out in the act.

Art. 46 of the Act. According to its wording, entrepreneurs who have suffered damage as a result of carrying out control activities in violation of the law, are entitled to compensation. Certainly, it is a great protection of the interests of entrepreneurs in the context of possible losses resulting from the control.

The initiation by an inspection authority must be justified and result from specific reasons. This conclusion follows from the content of Art. 47 of the Act, according to which inspections are planned and carried out after prior analysis of the probability of violation of the law in the course of economic activity. The analysis covers the identification of the subjective and objective areas in which the risk of violating the regulations is the highest. This means that the authority does not have complete freedom in selecting the entity to be inspected. Such a decision must be preceded by an appropriate analysis of the likelihood of a breach of the provisions. However, the obligation to conduct a prior analysis has been waived in the event that the review, pursuant to the Business Constitution, becomes reasonably suspicious:

  • threats to life or health,

  • committing a crime or misdemeanor,

  • committing a tax offense or a tax offense,

  • other breach of a legal prohibition or failure to comply with a legal obligation.

The mode of conducting the inspection

The first step in the entire control procedure is notification. The inspection body is obliged to notify the entrepreneur about the intention to initiate an inspection.

An inspection pursuant to the Constitution of Business shall be initiated not earlier than after 7 days and not later than within 30 days from the date of delivery of the notice of intention to initiate the inspection. If the control is not initiated within 30 days from the date of delivery of the notification, its initiation requires repeated notification. Also in this case, the legislator provided for a number of cases where the authority, due to the significant interest of the state, may refrain from the necessity to notify. An extensive catalog of exceptions is included in Art. 48 of the Act.

The next step is the presentation of the entrepreneur by the employees of the authority and the official identity card authorizing to carry out the inspection. The scope of control may not exceed the scope indicated in the authorization.

Appropriate control activities are performed in the presence of the entrepreneur or a person authorized by him. According to Art. 52 of the Entrepreneurs' Law, the control in accordance with the Business Constitution is carried out in an efficient manner and as possible as not disrupting the entrepreneur's functioning. If the entrepreneur indicates in writing that the activities performed significantly interfere with the economic activity of the entrepreneur, the need to undertake such activities is justified in the inspection report. All findings from the conducted control and recommendations for the entrepreneur are included in the protocol, which is then forwarded to the entrepreneur.

Multiple controls

As you know, control procedures are burdensome for the entrepreneur and may inhibit the normal functioning of the enterprise. In order to prevent abuses on the part of officials, it was decided to limit the number of checks carried out. Article 54 of the Act states that it is not possible to undertake and conduct more than one control of the entrepreneur's activity at the same time (except for the cases described in the Act).

In addition, the duration of all inspections of the inspection body at the entrepreneur in one calendar year may not exceed with regard to:

  • micro-entrepreneurs - 12 working days;

  • small entrepreneurs - 18 working days;

  • medium-sized enterprises - 24 business days;

  • other entrepreneurs - 48 business days.

Longer inspection periods are only possible for reasons beyond the control of the inspection authority and must be justified in writing. Moreover, it is also possible to extend the duration of the inspection if, in the course of the inspection, an understatement of the tax liability exceeding the equivalent of 10% of the declared tax liability, but not less than PLN 500, or an overstatement of the loss exceeding the equivalent of 50% of the declared loss, is revealed, not lower than PLN 2,500, or in the event of failure to submit the declaration despite such an obligation. Such control, in accordance with the Business Constitution, may not, however, be longer than twice the time specified above.

In addition, the Act indicates that if the results of the inspection show a gross violation of the law by the entrepreneur, another inspection may be carried out in the same scope in a given calendar year, and its duration may not exceed 7 days. The duration of the re-inspection is not included in the indicated periods.

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Entrepreneur's objection

Article 59 of the Act provides for the possibility for the entrepreneur to object to the commencement and performance of activities by the inspection authority in breach of the provisions. The objection raised requires justification. The entrepreneur submits the objection in writing to the control authority whose actions the objection concerns. The objection shall be filed within 3 working days from the date of initiation of the inspection by the inspection authority or the occurrence of grounds for objection.

An objection has certain legal consequences. Well, the following are withheld:

  • control activities carried out by the control authority whose activities the objection concerns - upon delivery of the notice of objection to the controller;

  • the duration of the control - from the date of filing the objection to the end of the proceedings caused by its lodging.

The inspection authority, within 3 working days from the date of receipt of the objection, considers the objection and issues a decision on:

  • withdrawal from control activities;

  • continuing control activities.