Types of companies in Poland

Polish companies in a nutshell.

PLA.partners provide legal services connected with incorporation of companies in Poland. If you are interested in starting a business in Poland below you will find information about different types of companies in Poland.

In Poland you may register business in following forms:

  • sole trader;
  • general partnership;
  • limited liability company; 
  • joint stock company;
  • limited partnership;
  • Polish civil partnership.

Limited liability company

Limited liability company is the most popular commercial company in Poland.

Main features of the limited liability company in Poland:

  • at least one shareholder, shareholder may be a natural person or a legal entity, but a single member entity may not be a sole shareholder of a Polish limited liability company;
  • there is a need to appoint board members – there are no restrictions as to the residency and nationality of a board member. Board members are responsible for representing the company;
  • minimum share capital is PLN 5.000;
  • it has legal personality;
  • company is liable for its own debt;
  • shareholders are not liable for company’s liabilities – they only bear a risk up to the value of their contributions to the share capital;
  • board members may be liable for company’s debts if the execution against company is ineffective. Such liability will not be imposed on the board members if petition for bankruptcy or composition proceedings of the company was filed at the appropriate time;
  • name: a LLC must select a name which will not be similar to any other Polish company name. Every LLC’s name must end with this abbreviation, “sp. z o.o.” sp. z o.o. stands for spółka z ograniczoną odpowiedzialnością, which literally means “Limited liability company”;
  • the company is required to have a registerred address in Poland.

In order to register a limited liability company in Poland you shall:

  • draft articles of association in a notarial dee form;
  • pay up the share capital;
  • appoint appropriate body – board members;
  • file required documents to the National Court Registry: including filled out forms, articles of association, stamp duty.

All records filed with the Commercial Registry are available for public inspection.

Taxation of Polish limited liability company (spółka z o.o.):

  • spółka z o.o. is subject to 9% or 19% corporate income tax;
  • capital gains are taxed at 19% rate;
  • dividend payments, in principle, are subject to 19% income tax, although exemptions may apply;
  • Poland is a party to many double taxation avoidance treaties, according to which dividends paid from Poland may be effectively tax-free in Poland or taxed at a lower rate.

Joint stock company

Polish joint-stock company is a legal entity with a separate legal personality from its stockholders. It may be public (listed on stock exchange) or private (not listed on stock exchange).

Below you will find some characteristic features of a Polish joint stock company:

  • no limitations as to the nationality or residency of stock holders;
  • represented by board members – consisting of at least one member;
  • legal entity with a separate legal personality;
  • minimum share capital – PLN 100.000  – the capital has to be paid up either in cash or by a contribution in kind;
  • flexible articles of association;
  • limited liability of stake holders – they are liable up to the value of their shares;
  • requirement to appoint supervisory board.

In order to open a joint stock company in Poland you need to:

  • choose name;
  • draft and execute articles of association – those shall be drafted in the form of a notarial deed;
  • appoint board members;
  • appoint members of the supervisory board – which exercises permanent supervision over the board of directors. It consists of at least 3 members. In public companies a minimum of 5 members, appointed and dismissed by the shareholders;
  • pay up the share capital;
  • sign the virtual office address agreement or lease property;
  • fill out registration forms and submit application for registration to the National Court Registry.

Upon registration you will obtain:

  • KRS number of your Polish joint stock company;
  • REGON;
  • NIP.

Taxation of Polish joint stock company (spółka akcyjna):

  • spółka akcyjna is subject to 9% or 19% corporate income tax;
  • capital gains are taxed at 19% rate;
  • dividend payments, in principle, are subject to 19% income tax, although exemptions may apply;
  • Poland is a party to many double taxation avoidance treaties, according to which dividends paid from Poland may be effectively tax-free in Poland or taxed at a lower rate.

Limited partnership

PLA.partners will help you if you wish to open a limited partnership in Poland and will guide you through the steps required to register a Polish civil partnership.

Main features of a Polish limited partnership:

  • there are two types of partners: general and limited partner;
  • general partner represents the limited partnership;
  • general partner bears unlimited liability;
  • limited partner is often called a ‘silence partner’;
  • limited partner is liable up to the amount specified in the articles of association – suma komandytowa;
  • no legal personality;
  • legal capacity – may acquire rights and incur obligations on its own behalf; 
  • judicial capacity – may be a party to court proceedings; 
  • procedural capacity – may appear before a court independently to defend its interests; 
  • no minimum share capital;
  • name – should contain the surname of at least one of the general partners and an additional designation “spółka komandytowa” (limited partnership);
  • registered in the National Court Register;
  • enters into effect after registration;
  • may be set up for definite or indefinite time – depending on the agreement made between the partners.

The articles of association of a limited partnership shall be drafted in a notarial deed form and shall include:

  • name and business address of the partnership;
  • business activity of the limited partnership – it’s purpose;
  • type of contribution made by general and limited partners and value of those contributions;
  • duration of the Polish limited partnership; 
  • value up to which the limited partners bear liability – suma komandytowa;

Steps to open a limited partnership in Poland:

  • execution of the articles of association in front of a notary;
  • preparation and submission of the application to the National Court Registry;
  • upon entering of a limited partnership to the register the partnership is established. Until it is entered in the National Court Register, the partnership does not formally exist and cannot conduct business activity.

Taxation of Polish limited partnership (spółka komandytowa):

  • spółka komandytowa was tax transparent for the income tax purposes until 2020;
  • starting from 2021 spółka komandytowa is subject to 9% or 19% corporate income tax (CIT);
  • capital gains are taxed at 19% rate;
  • starting from 2021 profits paid from these companies are taxed with 19% income tax on the level of partners.

Polish civil partnership

The simplest form of doing a business in Poland is via Polish civil partnership.

Main features of the Polish civil partnership:

  • low cost of establishment;
  • possibility to have simple accounting;
  • no legal personality;
  • partners are liable for debts of the Polish civil partnership – joint and several liability;
  • partners represent the Polish civil partnership;
  • at least two partners are required to establish a civil partnership in Poland – natural person or legal entities – there are no restrictions;
  • name – at least the first and last names of all the partners shall be included – in case of partners who are natural persons;
  • name shall also include text “civil law partnership”;
  • the partnership is not registered in the National Court Register;
  • partners shall be registered in the Business Activity Register (CEIDG);
  • no minimum capital to be contributed;
  • for the civil partnership to come to an existence partners shall sign an agreement – no requirement of the notarial deed form, simple written form suffices;

Steps to open a Polish civil partnership:

  • signing of an agreement between the partners;
  • application to – General Statistic Office GUS – to obtain REGON;
  • application to tax office to obtain NIP;
  • submitting information about the Polish civil partnership’s NIP and REGON to the CEIDG – 7 days deadline.

Sole trader

Sole proprietorship is typically used for small businesses. It is a simple business arrangement, in which one individual runs and owns the entire business. It is simple to establish and may be undertaken by any qualifying individual. A person conducting business activity in this manner is personally liable for all obligations arising from such activity.
* You can keep all your business’s profits after you’ve paid tax on them.
* You’re personally responsible for any losses your business makes.
* You must also follow certain rules on running and naming your business.
Your name may not:
– include ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company’ or ‘plc’;
– be offensive;
– contain a ‘sensitive’ word or expression, or suggest a connection with government or local authorities
– be the same as an existing trade mark.

Although many people use the term to refer to businesses that have no other employees aside from the owner, the actual definition of ‘sole trader’ refers to the legal structure of the business, rather than the number of employees. As such, while a business registered as a sole trader might only consist of the owner, it might also consist of the owner and additional employees.

* relative ease of setting-up;
* the comparatively small administrative burden involved
* lower costs.

* unlimited liability – should your business incur any losses your personal property or belongings could be up for grabs by your creditors.

General partnership

A registered partnership requires cooperation between at least two individuals or business entities. It is established by means of a partnership agreement registered with the National Court Register. Although a registered partnership has no legal personality, it may still act on its own behalf, have its own assets and debts. All partners are jointly and severally liable for the partnership’s obligations but creditors are initially obliged to seek satisfaction from the partnership assets. Partners’ personal liability may not be waived. All partners are obliged and entitled to manage and represent the partnership. 

Relatively small-scale business activity (microbusinesses, small businesses) conducted by at least two entities.

* should contain the surname or business name of at least one of the partners and an additional designation of the legal form “spółka jawna” (general partnership);
* the abbreviated designation “sp. j.” may be used in business dealing.

* no legal personality:
* legal capacity;
* judicial capacity;
* enters into effect upon entry into the National Court Register.

* definite term (the time required to perform a specific task);
* indefinite term.

It’s important to note that each partner is personally responsible for the business, including debts and lawsuits, and is held liable for the actions of their partner(s).

* easy to establish;
* simplified taxes;
* easy to dissolve.

* lack of protection of personal assets;
* partners are liable for each other’s actions.

If you are going into business with another individual you know and trust, a general partnership might be a good solution for your business.

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