The right choice of the form of business is important, first of all, because of the financial responsibility of the owners, but also the type of accounting, how the company is represented in the authorities or how profits are distributed, as well as the cost of doing business. The right choice of the type of business will avoid many problems in the future. Also, not every company can be run in any form, but about that in a moment.
Types of companies in Poland
Based on the current law, the forms of business we can include:
- sole proprietorship
- civil partnership
- general partnership
- general partnership
- joint-stock company
- limited liability company
- limited partnership
- limited joint-stock partnership
- simple joint-stock company
Sole proprietorship
Sole proprietorship is by far the most popular type of business in Poland. To set it up, currently only a few clicks are required and we can become an entrepreneur. Applications for business registration can be made both on the website of the Central Register and Information on Economic Activity, but also through banks, which usually tempt prospective entrepreneurs in this way with offers of business checking accounts.
In order to establish a sole proprietorship, it is not required to contribute share capital, as is the case with commercial companies, which we write about in detail in the following section. When setting up a sole proprietorship, it should be borne in mind that the entrepreneur is liable for any debts of the company with all his assets.
Civil partnership
A civil partnership is also a fairly popular form of business. However, a minimum of two partners is needed to establish it. It does not matter whether they are individuals, entrepreneurs or legal entities, such as commercial companies. For a civil partnership to be formed, it is necessary to create a written contract.
A civil partnership is not a separate legal entity (it does not have a so-called legal personality), which means that the company’s income tax payers are, as a rule, its partners. Based on the amount of income earned, the accounting of a civil partnership can be carried out on a simplified basis or on a full accounting basis. No share capital is required to establish a civil partnership. The profits of a civil partnership are divided equally among each partner.
General partnership
A general partnership, like a civil partnership, can be established by a minimum of two partners. These can be individuals, legal entities, as well as organizational units without legal capacity. In the case of a general partnership, it is also necessary to draw up a written contract. If the contribution of one of the partners is real estate, a notarized deed is necessary. A general partnership is registered in the National Court Register.
A general partnership has no legal personality, and its interests are represented by each partner. They (the partners) are also liable for the obligations of the general partnership with all their assets on a joint and several basis.
Limited liability company
A limited liability company is the most popular commercial law company in Poland. To establish this type of company, a contract must be concluded, and a limited liability company can even be established by just one person. A limited liability company is registered with the National Court Register.
Until a few years ago, it was necessary to create a notarial deed in order to establish a limited liability company, but after a change in the law, a somewhat limited limited liability company contract can be concluded in the ICT system available on the Ministry of Justice website (S24).
The minimum share capital of a limited liability company is 5 thousand zlotys. Liability in a limited liability company is borne by “the company itself,” but if the company does not have the means to pay its debts, its representatives (the board of directors) may also be held liable.
Joint-stock company
A joint-stock company in its structure somewhat resembles a limited liability company, but differs, among other things, in the amount of share capital, which is a minimum of 100 thousand zlotys. Like any commercial company, a joint-stock company must also be registered with the National Court Register. It is also necessary to create a memorandum of association.
A joint-stock company is liable for its obligations with all its assets. If the share capital of a joint-stock company is more than half a million and/or if there are more than 5 shareholders, it is necessary to establish a supervisory board. Joint-stock companies are often established by people who plan its listing on the stock exchange.
Partnership company
A partnership can only be established by representatives of the so-called liberal professions. These include, among others, lawyers or doctors. In order to set up a partnership, it is necessary to create a written agreement and report it to the National Court Register.
Unlike a joint-stock company or a limited liability company, it is not required to contribute funds to the share capital. A partnership, like a civil or general partnership, does not have a separate legal personality. A partner specified in the articles of incorporation is liable for the partnership’s debts.
In addition to the types of business described above, in Poland we also have to deal with a simple joint-stock company, limited partnership, limited joint-stock partnership. You can read more about them at iwaccu.com
