Which company in Poland should you choose as the ultimate business vehicle? There are seven types of commercial companies in the Polish legal system.
Every future entrepreneur can decide which form of business best suits their needs as well as their business profile. Below we discuss the characteristic features of each type of company in Poland and indicate the main differences between them.
Basic types of company in Poland
First of all, let us distinguish between the two main categories of business forms in Poland:
- partnerships, which include general partnership, professional partnership, limited partnership, limited joint-stock partnership
In these entities, the human factor is very important. In partnerships, a contribution of one’s work or services is possible (which is not the case when it comes to limited companies). Partnerships do not have a legal personality but they do have a legal capacity.
This enables them not only to incur liabilities but also to acquire rights on their behalf. They are also distinguished by the necessity to provide at least one surname (name) of the business’s partner.
- limited companies, including a joint-stock company, limited liability company and simple joint-stock company.
They are based on capital, which is reflected in the obligation to establish a statutory share capital in the amount required by the law. It is worth emphasizing that a limited company may be a single-member company (with only one shareholder).
Contrary to partnerships, limited companies have both legal capacity and personality. They are subject to double-taxation – in the first place they are CIT payers, and in the second place partners or shareholders pay tax on the obtained dividend.
- polish private partnership
It is worth mentioning a specific type of partnership, namely, a private partnership. Contrary to its name, it does not constitute a partnership in a sense of a separate business entity but rather a contract between at least two people.
As it is not a business entity per se, in this article we will omit it and focus on the characteristics of commercial companies and partnerships instead. Before we discuss each type of business form separately, let us take a look at the general requirements that apply to all of them.
Requirements common to all Polish companies and partnerships
Regardless of the chosen type of corporate form, several conditions must be met before forming a company in Poland. These include, first of all, concluding the company’s agreement (or articles of association) that specifies basic elements such as name and registered office, the subject of the company’s activity or its duration (if specified), contributions agreed by the partners, and registering a company in the National Court Register (i.e. Polish Commercial Register).
The company’s agreement may be concluded (mainly) in two ways:
- in a traditional form, i.e. by signing the company’s agreement – either in a regular written form (in case of general partnerships and professional partnerships) or in the form of a notarial deed (in case of limited partnerships, limited joint-stock partnership, limited liability companies, joint-stock companies and simple joint-stock companies)
- electronically, i.e. by the use of electronic contract form in the S24 system (in this case, the agreement may contain only basic solutions and requires a qualified electronic signature, a trusted profile or a personal signature from a Polish e-ID). However, this form of establishing a company is impossible in the case of a joint-stock company, a limited joint-stock partnership or a professional partnership
If the company’s agreement is ready, the next step is to apply for its registration in a National Court Register [Polish: KRS].
Partnerships in Poland: general, professional, limited and limited joint-stock
Polish general partnership
General partnership is the simplest form of a commercial law company. Its establishment requires a contract between at least two partners who agree to pursue a shared economic goal and to provide financial or non-financial contribution. The partners of a general partnership may be both natural persons and legal persons (e.g. other commercial law companies).
The company is responsible for its liabilities with all its assets. Nevertheless, if the execution of the company’s assets proves ineffective, the responsibility goes to the partners, who then are jointly liable with all their assets.
Polish professional partnership (spółka partnerska)
This form of company is for independent professionals, such as lawyers, doctors, journalists or architects. In this way, the specialists may work together while preserving their independence. This, however, imposes some restrictions – a limited liability partnership may be established only by natural persons (at least two), referred to as partners.
In the case of a professional partnership, it is worth noticing the specific kind of responsibility it carries. Namely, the partner of such a company is not liable for obligations resulting from errors made by other partners, which are related to operating as an independent professional.
A Polish limited partnership
This form of partnership is quite often chosen by entrepreneurs, primarily due to the possibility of limiting the liability of their partners. Partners in the limited partnership (who may be represented by natural persons or legal persons including other commercial law companies) may be divided into two categories:
- general partners – the so-called active partners who represent the company and can independently conduct its businesses (consequently, they have unlimited liability for the company’s obligations)
- limited partners – the so-called passive partners who may represent company only as representatives (their responsibility for company’s liabilities is the commandite sum that is specified in the agreement)
Obviously, as in the case of other partnerships, the surname (or the name of legal entity) of at least one general partner should be present in the company’s name. What is important, if the surname or business name of a limited partner is included in the name of a limited partnership, the limited partner is liable to third parties on the same terms as the general partner.
It is also important to know that since 1 January 2021 a limited partnership has been a corporate income tax (CIT) payer. Its profits are taxed at the level of the partnership, and distributions are taxed again at the level of the partners, similarly to limited companies.
The second level of taxation is softened. A general partner may reduce the tax due on distributed profits by the CIT paid by the partnership in proportion to their share, and limited partners may, subject to statutory conditions, benefit from a 50% exemption on distributed profits up to PLN 60,000 a year. This is why the limited partnership is still often chosen by entrepreneurs.
Polish limited joint-stock partnership
As the name itself suggests, this corporate form constitutes a combination of a limited partnership and a joint-stock company. Like other partnerships, it has legal capacity but no legal personality. It has the same division of partners as the limited partnership:
- general partners – have the right to represent the partnership but simultaneously have full responsibility for company’s liabilities and
- stockholders – who are not responsible for company’s liabilities.
In this type of company it is necessary to establish a share capital, which cannot be lower than 50 000 PLN.
Limited companies in Poland: sp. z o.o., joint-stock company and PSA
Polish limited liability company (Ltd.)
One of the three limited companies, also known as Ltd. This type of company is probably the best known and the most popular form of business in Poland. The company itself is responsible for all of its liabilities (the partners are not liable for the obligations of the company).
Limited liability company may be established by natural persons and legal persons (including other commercial companies and partnerships). The only exception is that the limited liability company cannot be established solely by a single-member limited liability company. However, nothing stands in the way of such a company to buy shares in an Ltd company after its registration.
In a limited liability company it is necessary to make contributions to the share capital, which cannot be lower than 5,000 PLN. However, the minimum nominal value of each share must be at least 50 PLN.
The limited liability company operates through its governing bodies – the meeting of shareholders and the management board. Shareholders may also decide to appoint a supervisory board which will have overall control over the company’s operations.
Establishing a supervisory board in a limited liability company is optional. However, if the number of shareholders is higher than 25 and the share capital exceeds 500,000 PLN, the appointment of a supervisory board (or an audit committee) is obligatory.
Polish joint-stock company
It is a limited company that may be established by a natural or legal person. As a rule, it is chosen by entities that decide to operate on a larger scale, as the minimum share capital of a joint-stock company is 100 000 PLN.
Moreover, the legislator requires adopting the form of a joint-stock company to conduct certain types of activities (such as, for example, a bank or an insurance company). Internal processes in a joint stock company are also more formalized than in the case of limited liability companies.
For example, every meeting of shareholders must be recorded by a notary – such a requirement does not exist in the case of limited liability companies. In Polish law, there are two types of joint-stock company: public (in which at least one share has been listed on a public stock exchange) and private (no share of the company has been listed on a public stock exchange).
The responsibility for liabilities in a joint-stock company is similar to the one in a limited liability company, i.e. shareholders are not responsible for company’s obligations.
The governing bodies of a joint-stock company are (similarly to a limited liability company) the shareholders’ meeting and the management board. What is important, the appointment of a supervisory board is obligatory, regardless of the number of shareholders.
Polish simple joint-stock company [Polish: PSA]
It is the newest corporate form, available since 1st July 2021. A simple joint-stock company is (as the name suggests) a simplified form of a joint-stock company, which was supposed to be intended for start-ups. Primarily because all the related procedures -establishing, running, as well as dissolving it – are much easier than in the case of a joint-stock company.
The most important thing, however, is that in simple joint-stock companies the minimum share capital constitutes a symbolic 1 PLN. In fact, it is the perfect choice for founders of innovative companies.
Unlike a joint-stock company, a simple joint-stock company cannot list its shares on a stock exchange or any other organised trading venue. PSA shares have no nominal value and are recorded in an electronic shareholders’ register kept by an authorised entity. It is the number of shares, not their value, that determines the weight of each shareholder’s vote.
Moreover, the structure of a simple joint-stock company makes it possible to establish a board of directors – a body combining the duties of the management board and the supervisory board.
Which types of company can a foreigner set up in Poland?
Polish law allows foreigners to form companies in Poland. Persons from the Member States of the European Union or the European Free Trade Association (EFTA) may undertake and conduct economic activity on the same terms as Polish citizens. Foreigners who are citizens of other countries may also operate in the same way. If they have e.g. a permanent residence permit in Poland, a long-term resident’s EU residence permit or a refugee status.
But what if none of the above conditions are met? It does not immediately mean that such a person cannot become an entrepreneur in Poland.
It is possible but with some limitations. In such situation, the foreigner may run a business in the form of a limited partnership, limited joint-stock partnership, limited liability company, simple joint-stock company or joint-stock company, and may join such companies or acquire their shares, unless an international agreement provides otherwise.
If you are planning to set up a company in Poland as a foreigner, the next practical questions are usually cost and timing. Our guides explain how much it costs to register a company in Poland and how long company registration in Poland takes. If you need to start trading straight away, buying a shelf company in Poland can shorten the process, and a foreign company that does not need a separate Polish entity can instead open a branch in Poland.
Types of company in Poland compared
The Polish legal system offers many types of companies to choose from. To better illustrate their functioning, below we present two tables showing the differences and similarities between them.
Partnerships in Poland – basic facts
| Type of company in Poland | Responsibility of partners for company’s liabilities | Minimal value of share capital | Possibility to establish a company via the Internet | CIT payer |
| general partnership | unlimited liability | non-applicable | yes | no |
| professional partnership | unlimited liability | non-applicable | no | no |
| limited partnership | general partner – unlimited liability limited partner –to the amount of commandite sum | non-applicable | yes | yes |
| limited joint-stock partnership | general partner – unlimited liability shareholder – no liability | 50 000 PLN | no | yes |
Limited companies in Poland – basic facts
| Type of company in Poland | Minimum share value | Minimal value of share capital | Possibility to establish a company via the Internet | The necessity to make contributions to cover the share capital before the registration of the company | Obligatory governing bodies |
| limited liability company | 50 PLN | 5000 PLN | yes | yes (S24 route: within 7 days of registration) | Management, Meeting of shareholders
(Supervisory board only in specific cases) |
| joint-stock company | 0,01 PLN | 100 000 PLN | no | yes,
at least in ¼ | Management, Supervisory board, meeting of shareholders. |
| simple joint-stock company | none | 1 PLN | yes | no | Management OR Board of Directors, Meeting of shareholders |
If this article was interesting for you and you want to know more on the topic it concerned we encourage you to contact us. Specialists from our law firm in Poland, will be happy to help. If you are interested in company registration in Poland visit our dedicated landing page.
Frequently asked questions about types of company in Poland
What is the most popular type of company in Poland for foreign investors?
The limited liability company (sp. z o.o.). It requires share capital of at least PLN 5,000, its shareholders are not liable for the company’s debts, it can have a single shareholder and it can be set up online through the S24 system. The one restriction is that it cannot be formed solely by another single-member sp. z o.o.
Can a non-EU citizen set up any type of company in Poland?
Not every type. A foreigner from outside the EU/EFTA who has no qualifying residence status in Poland may operate only through a limited partnership, limited joint-stock partnership, limited liability company, simple joint-stock company or joint-stock company. A general or professional partnership and sole proprietorship are available only to those with a qualifying status, such as a permanent residence permit, long-term EU resident status or refugee status, or where an international agreement provides for it.
What is the minimum share capital of a company in Poland?
PLN 5,000 for a limited liability company (sp. z o.o.), PLN 100,000 for a joint-stock company (S.A.), PLN 50,000 for a limited joint-stock partnership and PLN 1 for a simple joint-stock company (PSA). General, professional and limited partnerships have no minimum share capital.
Which types of company in Poland pay corporate income tax (CIT)?
Limited liability companies, joint-stock companies and simple joint-stock companies are CIT payers, and since 2021 so are limited partnerships and limited joint-stock partnerships. General and professional partnerships are, as a rule, tax-transparent: their profits are taxed directly in the hands of the partners.
Can a company in Poland be set up online?
Yes, for a general partnership, limited partnership, limited liability company and simple joint-stock company, using the S24 model agreement and a qualified electronic signature, a trusted profile or a personal signature from a Polish e-ID. A joint-stock company, limited joint-stock partnership and professional partnership must be formed with a traditional agreement.
How much does it cost and how long does it take to set up a company in Poland?
It depends on the company type and the route chosen. See our guides on the cost of registering a company in Poland and how long company registration in Poland takes.
