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 or partnership and indicate the main differences between them.
Basic types of companies 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.
Business forms in Poland – common features of partnerships and companies
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 limited liability 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 an electronic signature recognized in Poland). However, this form of establishing a company is impossible in the case of a joint-stock company, a limited joint-stock partnership or a limited liability partnership
If the company’s agreement is ready, the next step is to apply for its registration in a National Court Register [Polish: KRS].
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 limited liability partnership
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 limited liability partnerships, 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 a limited partnership is subject to double taxation, similarly to limited companies. In the first place, the corporate income tax (CIT) is subject to deduction from the profits obtained by the company, and then each of the partners must settle the personal income tax (PIT) on the received dividends. However, a partner may deduct corporate income tax paid by the partnership from the dividends, which means that despite double taxation, this form of business entity 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 – what distinguishes it is the fact that it also has 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 formation in Poland
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 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 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, 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. 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.
Can a foreigner register a partnership 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 joint-stock company, limited partnership, limited joint-stock partnership or a limited liability company.
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||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|
|limited liability partnership||unlimited liability||non-applicable||no||no|
|limited partnership||general partner – unlimited liability|
limited partner –to the amount of commandite sum
|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||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||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|
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