Accountancy in Poland

>> Choice of Legal Form in Poland

Limited liability company (Spółka z ograniczoną odpowiedzialnością)

Foreign capital participation is allowed up to 100%, except for certain types of activity. The minimum initial capital is  5 000 PLN.

Limited liability companies may be founded by one or more persons for any legal purpose. They may have only one shareholder, though they cannot be formed solely by another limited liability company with one shareholder.

The shareholders who are also management board members have civil, tax, and criminal liability imposed on them by law.

Changes from 4/1/2016 introduced the possibility of making some resolutions, including amendments to the articles of association and submitting financial reports on the Internet, and the appointment of a proxy via the Internet (for new companies since 1/15/2015).

Joint-stock company / Public limited company (Spółka Akcyjna)

Foreign capital participation is allowed up to 100%, except for certain types of activity.

In many ways, it is similar to a limited liability company, although a few differences exist:

  • the minimum aggregate issued share capital is PLN 100.000,00 and the minimum nominal value per share is PLN 0.01,
  • a supervisory board, in addition to a management board, must be appointed,
  • management is more formal,
  • this form is required by law for some businesses (e.g. banks, insurance companies), and is common where the company is planning a floatation on capital markets,
  • it must audit its financial statement annually.

A joint-stock company is founded by at least one individual or legal entity. A jointstock company may not be established solely by a single limited liability company. There are no requirements concerning residence status or nationality.

Unlimited partnership (Spółka cywilna)

Partners of an unlimited partnership are obliged to strive to achieve a common economic goal. Partners are jointly and severally liable for the liabilities of the company.

Each partner is entitled and obliged to manage the affairs of the company and authorized to represent the company in the extent that they are authorized to conduct its affairs.

It is possible to release certain partners from the participation in the losses but not in profits. The division and payment of profits may be claimed by a partner only after the dissolution of the company.

General partnership (Spółka jawna)

A General Partnership has no legal personality. A General Partnership can acquire, on its own behalf, various rights, including property rights and other rights in rem, and can incur liabilities. The partners in a general partnership are jointly and severally responsible for the company’s liabilities, to the extent of all their assets without limitation.

Limited partnership (spółka komandytowa) and limited joint stock partnership (spółka komandytowo – akcyjna)

This type of partnership does not have legal personality. The name of the limited partnership should contain the name of one or more general partners (natural persons or legal entities) and the designation “limited partnership”, or the abbreviation “LLP” (Sp. k.). In terms of liability, there are two types of partners. The personal liability of one type of partner is limited to a determined amount, which is specified in the articles of incorporation. These partners are not liable above the amount contributed to the partnership. A partner whose liability is limited may represent the company within the limited scope of their power of attorney that is granted to them by the company. The other type of partners are liable jointly and severally for all the partnership’s obligations and their liability is unlimited.

The Limited Joint Stock Partnership is a combination of a joint-stock company and a limited partnership but it does not have legal personality. Like the limited partnership, there are two types of partners in terms of liability for the firm’s obligations: one who is liable in an unlimited way (partner) and the other who enjoys limited liability and is obliged to purchase shares, the legal status of the latter being the same to the one in a joint-stock company (shareholder). For corporate income tax, a Limited Joint Stock Partnership is considered a full legal entity and pays Companies Income Tax.

The partnership is represented by the partners, while shareholders have no power of representation, unless by power of attorney. Partners are authorized to manage the partnership. The minimum share capital is PLN 50.000,00 and it may be paid up in cash or in kind.

Professional partnership  (spółka partnerska)

This structure is designed for entrepreneurs who intend to run a business as a freelancer such as a lawyer, dentist, architect, accountant, tax adviser or others as listed in the Commercial Companies Code. This partnership is not equipped with legal personality.  Partners who wish to establish such a partnership must obtain a license in their discipline.

Partners are liable for the partnership’s liabilities with all personal assets. However, they are not liable for obligations arising from the performance of a freelance profession by the other partners or by persons who execute their commands  in the provision of services.

Subsidiary (spółka zaleźna)

Subsidiaries may be formed by local or foreign entities from EU countries, member countries of the EFTA – parties to the Agreement on the European Economic Area as well as foreign persons from countries which are not parties to the Agreement on the European Economic Area, but which may, based on agreements between these countries and the European Community, take up business activity in Poland.

The citizens from other countries than mentioned above may take up business activity in Poland if they have, inter alia, a settlement permit, a long-term resident of the European Communities permit, a residence permit for a specified period of time, a residence permit for a specified period and remain married to a Polish citizen residing in Poland, have been granted a temporary protection, or possess a valid Card of the Pole. Other foreign entities may take up business activity only in the form of a limited partnership, a limited joint stock partnership, a limited liability company or a public limited company. Also, they are eligible to join companies, or acquire shares in them.

Sole proprietorship  (działalnołć gospodarcza)

This is a common form of business activity, popular especially among physical persons and small entrepreneurs. It is regulated by the Act on Freedom of Economic Activity. A person carrying on a business activity in such a form uses their name or a special name of the enterprise. The sole proprietor’s liability for their business obligations is unlimited. To set-up the business, they must apply to the Business Activity Central Register and Information Record (CEIDG).

Branch office/Representative office (oddział/przedstawicielstwo)

Foreign investors may establish branches in Poland to conduct the same business as the foreign investor. From a legal point of view, the branch is part of the foreign enterprise and does not have its own legal identity. Consequently, the liability for the branch offices obligations lies with the establishing company. A branch office is registered in the National Court Register under the name of the foreign investor together with the words “Branch in Poland” (Oddział w Polsce).

A representative office may be established only for advertising and promotion of foreign business. It requires registration in the Register of Representative Offices of Foreign Entrepreneurs kept by the Minister of the Economy.

Foundation (fundacja)

A foundation may be established to achieve the objectives which are socially or economically useful, in particular: healthcare, development of economic and science, education, culture and arts, social welfare, protection of the environment and preservation of historical monuments.

Foundations may be established by individuals regardless of their nationality and place of residence and by legal persons which have their registered offices in Poland or abroad. However, the registered office of a foundation must be located in Poland.

In practice, foreign investors usually choose to operate as Limited Liability Companies or Branch Offices. It is important to bear in mind that similar requirements concerning bookkeeping and tax obligations apply to both forms of business with foreign capital involved.
Foreign foundations with registered offices abroad may establish a representative office in Poland. Establishment of a representative office requires permission, which indicates a consent to take up the business activity.

Latest version updated 24th January 2018

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