Choosing the right legal structure for your Polish operations

Choosing the right legal structure for your Polish operations
Jakub Chajdas

Jakub Chajdas

Partner / Attorney-at-law

When starting business operations in Poland, one of the first decisions you will need to make is choosing the right legal structure for your business. This can be a complex process, as different legal structures have different implications for taxation, liability, and compliance. In this article we will explore the various legal structures available for operations in Poland and provide guidance on how to choose the right one for your business.

Table of Contents

The most common types of legal structures for companies in Poland include sole proprietorships, partnerships, limited liability companies (LLC) and joint-stock companies. Each has its own advantages and disadvantages. It is important to choose the one that best fits the needs of your business.

Sole Proprietorship

A sole proprietorship is a simple and inexpensive way to form a company in Poland. It also comes with certain risks. The owner is personally liable for all debts and obligations of the business. There is no legal separation between the owner and the business. This form of activity is (as a rule) not available for forigners.


There are two types of partnerships in Poland: general partnership and limited partnership. In general partnership, all partners are personally liable for the debts and obligations of the business. In limited partnership, only the general partners are liable.

Limited Liability Company

An LLC is a popular choice for foreign investors in Poland. It offers limited liability for the shareholders and is considered a separate legal entity. This means that shareholders are only liable for the company’s debts and obligations to the extent of their capital contributions. LLCs are also relatively easy to set up and maintain.

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 is obligatory.

Joint-Stock Company

A Joint-stock company is a more complex legal structure that is typically used by larger companies. They are a separate legal entity and shareholders are only liable to the extent of their capital contributions. However, they require a larger share capital and also more compliance regulations applicable.

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. 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 have a notarized form – 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 a new corporate form, as it functions only from the 1st of July, 2021. A simple joint-stock company is (as the name suggests) a simplified form of a joint-stock company, created with start-ups in mind. 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. Similarly to a joint stock company, a simple joint-stock company has the right to list shares on the stock exchange. Although they do not have a nominal value, they influence the rights of shareholders in the company, because a significant number of shares makes the vote of a given shareholder more important.

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.

Choosing the right legal structure for your Polish operations is an important decision that can have a significant impact on your business. By understanding the advantages and disadvantages of each legal structure, foreign investors can make informed decisions and choose the one that best fits the needs of their business. In 2023, our recommendations for the clients will still depend on their developed or assumed business models. There is no doubt that since the implementation of the Polish Deal there is no one business form that would be profitable for all entrepreneurs. Previously, a limited liability company and a limited partnership constituted such solutions. Still, we can assume in broad terms that:

  • for “start-ups” we will recommend an LLC or a simple joint-stock company;
  • for profitable service activities (with a low level of investment) we will recommend a limited partnership;
  • for businesses in which a significant part of the income is reinvested, we would recommend an LLC, preferably together with Estonian CIT

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.

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