From this entry you will learn:
– the most important information about the limited joint-stock partnership in Poland, which is a mix of partnerships and limited liability companies.
A limited joint-stock partnership in Poland (SKA) is an unincorporated body – legal entity without legal personality. However, it has judicial and legal capacity, which means that it can acquire rights and incur obligations. There are two types of partners in a limited joint-stock partnership in Poland – the general partner (commonly known from a limited partnership) and the shareholder (commonly known from a joint-stock company).
When is a limited joint-stock partnership in Poland formed?
Like other partnerships, a limited joint-stock partnership in Poland is formed when it is entered in the register. The doctrine points out that, despite the significant elements that a limited joint-stock partnership has, it is difficult to speak of a company in organisation in the case of an SKA (although this is not a uniformly held view). The articles of association of a limited joint-stock partnership must be concluded in the form of a notarial deed. Once the shares have been taken up and all other formalities have been completed, it is possible to submit an application for registration of the company in the Register of Entrepreneurs. Currently, this application can only be submitted electronically via the court registry portal.
Name (business name) of the limited joint-stock partnership in Poland
The company name is the name under which the company conducts its business. The name of the limited joint-stock partnership in Poland should include the name of one, some or all of the general partners together with the addition “limited joint-stock partnership” or the abbreviation “S.K.A.”. If the general partner of a limited joint-stock partnership is a legal person or a partnership, the name of the SKA, in addition to the addition “limited joint-stock partnership”, must include the full name of the partnership (i.e. without the abbreviation).
The name of the SKA should not include the name or business name of the shareholders.
Advantages and disadvantages of a limited joint-stock partnership in Poland
A limited joint-stock partnership in Poland (SKA) combines the characteristics of both a partnership and a capital company. By definition, a limited joint-stock partnership is a partnership for the purpose of operating a business under its own name, in which at least one partner is liable to creditors for the partnership’s obligations without limitation (general partner) and at least one partner is a shareholder.
The advantages of an SKA generally include the lack of personal liability of the shareholders (they can only forfeit the contributions made to the shares). As in a joint-stock company (which you can read about here), the SKA offers the possibility to acquire capital by issuing shares.
Among the disadvantages of an SKA is the necessity for it to have share capital of at least PLN 50,000, the obligation to keep full accounts and the fact that general partners are liable for the company’s obligations without limitation with all their assets. In addition, although it is a partnership, resolutions of the general meeting must be minuted by a notary public in the form of a notarial deed (for example, resolutions of the partners of a limited partnership, which you will read about here, may be concluded in ordinary written form).
Model articles of association of a limited joint-stock partnership in Poland
As of today, it is not possible to set up a limited joint-stock partnership in Poland in the s24 system (like, for example, a limited liability company, which we write about here). Consequently, there is no universal Model Articles of Association of a limited joint-stock partnership in Poland in circulation. The provisions of the Commercial Companies Code indicate that the articles of association of a limited joint-stock partnership should contain: the company’s name and registered office, the object of the company’s activity, the duration of the company (if specified), an indication of the contributions made by each general partner and their value, the amount of the share capital, the nominal value of the shares and their number with an indication of whether the shares are registered or bearer shares, the number of shares of each type and the rights attached to them (if shares of different types are to be introduced). A number of other provisions may, of course, be included in the articles of association, provided that they do not contravene the law.
Shareholders may be natural persons, legal persons and unincorporated organisational units. A shareholder is not liable for the obligations of the company. He may only represent the company as a proxy. He may be considered as an investor in the company and is liable for its obligations only in two cases:
1. when the shareholder’s name is included in the company’s name,
2. when he does not disclose the power of attorney or acts without or in excess of the power of attorney,
Shareholders have the right to dispose of their shares; they also participate in the company’s losses up to the value of the shares subscribed.
General partners in a limited joint-stock partnership in Poland
The general partners may be natural persons, legal persons and organisational units without legal personality. The general partner represents the limited joint-stock partnership in Poland. They may be deprived of this right by the articles of association or a court ruling. They have the right and duty to manage the affairs of the company, unless this power has been delegated to the general meeting or the supervisory board. The general partners are competent to obtain information about the company, its assets, to inspect the company’s financial books and documents. The general partners are unlimitedly liable with all their assets for the obligations of the limited joint-stock partnership in Poland. The articles of association may exempt a general partner from contributing to the losses of the partnership.
Supervisory board of a limited joint-stock partnership in Poland
The establishment of a supervisory board is mandatory when the number of shareholders exceeds twenty-five. The members of the supervisory board are appointed and removed by the general meeting, for a term of no more than five years. A general partner and his employee may not serve on the supervisory board.
The supervisory board exercises constant supervision over the company’s activities in all areas of its business. In particular, it evaluates the general partners’ reports on the company’s activities and financial statements as regards their conformity with the books and documents; it considers the general partners’ proposals for the distribution of profit or coverage of loss and reports annually in writing to the general meeting on the results of these evaluations.
General meeting of a limited joint-stock partnership in Poland
The meeting may be either ordinary or extraordinary. It may be attended by both general partners and shareholders. Each share subscribed for or acquired by a person who is not a general partner entitles that person to one vote. General meetings adopt resolutions concerning, among other things, the approval of the financial statements, the appointment of the auditor, the dissolution of the company. They also adopt resolutions requiring the consent of all general partners, these include resolutions on the distribution of profit for the financial year, merger and transformation of the company, amendment of the articles of association, disposal of the company’s real estate, etc. It is at the general shareholders’ meeting that fundamental decisions concerning the company are made.
Who represents a limited joint-stock partnership in Poland?
As a general rule, a limited joint-stock partnership in Poland is represented by a general partner or general partners acting on its behalf. The right of representation is vested in each general partner, unless the general partner has been deprived of that right by the articles of association or by a final court decision. If the manner of representation by a general partner is not specified in the articles of association, each general partner is entitled to represent the SKA independently. However, it is possible to introduce joint representation of the general partners. In such a case, for example, two general partners will need to act jointly in order for the SKA to conclude a contract.
Shareholders do not have the right to manage the affairs of the SKA, let alone the right of representation. However, a general partner may grant a power of attorney to act on behalf of the company, either to a third party or to a shareholder. In such a case, such a person acts as a proxy and the provisions of the Civil Code on power of attorney apply to him or her.
Who is liable for the debts of a limited joint-stock partnership registered in Poland?
Under the provisions of the Code of Commercial Partnerships and Companies, the partners of a limited joint-stock partnership in Poland must be at least one general partner and one shareholder.
Liability of general partners
The liability of a general partner of a limited joint-stock partnership in Poland is the same as that of a general partner of a limited partnership (which you can read about here). A general partner is liable for the obligations of the partnership out of all its assets and in an unlimited manner. If there are more than two general partners, they are jointly and severally liable to creditors. A creditor of the SKA may, at its discretion, direct its claims to one of the general partners, to several or to all of them. The liability of the general partners is subsidiary in nature. A creditor is therefore obliged to first try to satisfy his claim from the assets of the SKA. Only if this fails creditor can enforce its claim against the assets of the general partners.
A shareholder in connection with participation in an SKA risks, in principle, only the loss of the contribution made to cover the shares (similar to a shareholder of a joint-stock company, which you will read about here). A shareholder is, in principle, exempt from any liability for the company’s obligations.
However, in certain situations a shareholder’s liability may arise. For example, if a shareholder’s name or business name is included in the SKA’s name, the shareholder is then liable on the same basis as a general partner, despite not formally holding the status of a general partner. Another case of a shareholder’s liability may be when he acts as a proxy of the company. In such a situation, if the shareholder fails to produce a power of attorney or performs a legal act without a power of attorney or beyond its scope, the shareholder is fully liable for the liabilities incurred.
The minimum share capital of a limited joint-stock partnership in Poland is PLN 50,000. Other types of capitals may also be created in the company – reserve capital and supplementary capital. The share capital is divided into shares of equal value, which may not be less than one grosz. The assets of a limited joint-stock partnership in Poland determine the extent of its liability. The contribution made by each general partner must be designated as to value and subject matter in the articles of association, and he or she may transfer ownership or other rights to the partnership and perform work duties to it. A shareholder’s contribution is transferred to the company’s share capital, and may be either in cash or in kind.
Pursuant to Article 147 of the Code of Commercial Partnerships and Companies, shareholders and general partners participate in the company’s profits in proportion to the contribution made by each of them, unless the articles of association provide otherwise.
What taxes apply to a limited joint-stock partnership in Poland?
The limited joint-stock partnership in Poland has been a corporate income tax (CIT) payer for several years now. The company is therefore first subject to CIT on the income it generates. Subsequently, if dividends are paid out to shareholders, they must pay income tax. The CIT rate for an SKA is generally 19%. However, as in the case of a limited liability company or joint-stock company (which you will read about here), an SKA that has just commenced operations or has the status of a so-called small taxpayer may benefit from a preferential rate of 9%. It should also be noted that a shareholder of an SKA that is a CIT taxpayer (i.e. a limited liability company, joint-stock company or other SKA) may, if it meets the conditions set forth in the tax law, benefit from the so-called “dividend exemption”, i.e. exemption from taxation of the dividend paid.
What Social Security is applicable to a limited joint-stock partnership in Poland?
Shareholders of an SKA from 2023 are required to pay ZUS contributions. General partners, under the provisions of the Social Insurance System Act, will become a person conducting non-agricultural activity. This means that general partners of a limited joint-stock partnership in Poland (just like partners of a limited partnership, as you will read here) will have to pay social insurance contributions, as well as health insurance contributions.
If the SKA employs employees, then the entity is the payer of contributions for such persons and must comply with all formalities related to this.
What accounting rules apply to a limited joint-stock partnership in Poland?
A limited joint-stock partnership in Poland is obliged to keep full books of account. Therefore, the company must maintain comprehensive bookkeeping, the rules governing comprehensive bookkeeping are specified by the provisions of law, including in particular the Accounting Act. The SKA is required to prepare financial statements. Bookkeeping is most often entrusted to accounting offices.
Can the articles of association of a limited joint-stock partnership in Poland be terminated?
Pursuant to Article 149 § 2 of the Code of Commercial Partnerships and Companies, a shareholder is not able to terminate the articles of association of a limited joint-stock partnership in Poland. The loss of membership by a shareholder in an SKA is possible through the sale of shares or following a share redemption procedure (i.e. similarly to a joint-stock company, which is discussed here).
The provisions of the Commercial Companies Code provide that only the general partner may terminate the articles of association of a limited joint-stock partnership in Poland, provided, however, that the articles of association provide for such a possibility. If the articles of association of an SKA are concluded for an indefinite period of time, the general partner should submit a written notice of termination six months before the end of the financial year (unless the articles of association of a given SKA provide otherwise).
How to exit a limited joint-stock partnership in Poland?
A general partner of a limited joint-stock partnership in Poland may terminate the articles of association of the partnership. Irrespective of this, the general partner may also dispose of all of its rights and obligations in the partnership. A shareholder, on the other hand, may exit the partnership through the sale of shares or their cancellation.
The share documents of joint-stock companies and limited joint-stock partnerships expired on 1 March 2021. This is because on that date, mandatory provisions regarding the shareholder register came into force. Only certain entities, such as a brokerage house, are authorised to maintain the shareholder register. In the case of shares in a limited joint-stock partnership, until 1 March 2026, the share documents retain evidentiary value with regard to the shareholder’s demonstration to the company that he or she is a shareholder.
As in the joint-stock company (which we write about here), from 1 March 2021 also in the joint-stock limited partnership in Poland, an entry in the register of shareholders is required for the effective disposal of shares. Each time, therefore, share disposals will involve the entity maintaining the shareholder register.
Dissolution of the limited joint-stock partnership in Poland
There are several possible reasons for the dissolution of a limited joint-stock partnership in Poland. One of them will be the occurrence of a reason provided for in the articles of association, while another will be the adoption by the general meeting of a resolution to dissolve the SKA. The SKA is also dissolved as a general rule in the event of the death, declaration of bankruptcy or withdrawal of the sole general partner, unless the articles of association of the SKA provide otherwise. The dissolution of the SKA results in mandatory liquidation of the company. In this respect, the provisions on the liquidation of a joint-stock company must be used. This means that the procedure for the liquidation of the SKA is formalised and quite lengthy.
As a rule, the liquidators are the general partners who have the right to conduct the company’s affairs.
If the articles of association of an SKA so provide, the death of the sole general partner will not result in the dissolution of the partnership. In such a case, the inheritance of all rights and obligations to which he is entitled will occur. Shares as participation rights will be inherited on the general principles applicable to a joint-stock company (as described in more detail here).
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