Strona Kancelarii » Types of Commercial Companies in Poland

On our website, we have already discussed several times the rules of operation, the incorporation process and the taxation of the most popular commercial company in Poland, namely the limited liability company.

In this article, we will present the general characteristics of all commercial companies, which are divided into partnerships and capital companies.

Partnerships are organisational units without legal personality to which the law grants legal capacity. They are so-called defective legal persons, to which the provisions on legal persons apply accordingly.

Partnerships include:

1. registered partnership (spółka jawna),

2. professional partnership (spółka partnerska),

3. limited partnership (spółka komandytowa),

4. limited joint-stock partnership (spółka komandytowo-akcyjna).

Each of the above companies is established only upon its entry in the register of entrepreneurs of the National Court Register.

Partnerships may, in their own name, acquire rights, including ownership of real estate and other rights in rem, incur obligations, sue and be sued.

Partners make contributions to partnerships, which may consist in transferring or encumbering the ownership of things or other rights, as well as in providing other services to the company. As a rule, partners in partnerships — with the exception of a limited joint-stock partnership — do not receive any shares or stocks in return for their contribution. This is why they are referred to as partnerships rather than capital companies.

A registered partnership is the simplest form of partnership. It does not have legal personality, and its establishment requires the partners to conclude a written agreement under pain of nullity. Each partner is personally and unlimitedly liable for the obligations of the registered partnership, jointly and severally with the other partners.

A registered partnership does not have corporate bodies, such as a management board, supervisory board or general meeting. As a rule, each partner has the right to represent the registered partnership. The right of representation covers all judicial and non-judicial acts. The partnership agreement may introduce a requirement of joint representation together with another partner or a commercial proxy.

A registered partnership of natural persons, i.e. one in which all partners are natural persons, may settle its accounts using a revenue and expense ledger, a lump-sum tax on recorded revenue, or full accounting books. If the company’s net revenue exceeds EUR 2,500,000, it is required to switch to full accounting. In addition, if a legal person, such as a limited liability company, is a partner in a registered partnership, the partnership must keep full accounting books from the outset, regardless of the amount of revenue generated.

A professional partnership is a company established by partners, referred to as “partners”, for the purpose of practising a liberal profession. The name of the company should include the surname of at least one partner, the designation “partner”, “partners” or “professional partnership”, and an indication of the liberal profession being practised. Only natural persons may be partners. The group of liberal professions which may establish professional partnerships includes: advocate, pharmacist, architect, physiotherapist, construction engineer, statutory auditor, insurance broker, laboratory diagnostician, tax adviser, securities broker, investment adviser, accountant, physician, dentist, veterinarian, notary, nurse, midwife, attorney-at-law, patent attorney, property valuer and sworn translator. The professional partnership agreement must be concluded in writing under pain of nullity.

A characteristic feature of a professional partnership is the rule that a partner is not liable for obligations arising in connection with the practice of a liberal profession by the other partners, nor for the acts of persons working under the supervision of another partner. However, a partner may be liable for their own professional malpractice and for other general obligations of the partnership.

The partnership agreement may provide that the management of the partnership’s affairs and its representation are entrusted to a management board. As a rule, however, each partner has the right to represent the partnership independently.

A professional partnership may keep its accounting records in the form of a revenue and expense ledger until it exceeds the statutory revenue threshold of EUR 2,500,000. Once this threshold is exceeded, the partnership must switch to full accounting.

A limited partnership is a partnership in which at least one partner, the general partner, has unlimited liability towards creditors for the obligations of the partnership, i.e. liability with all their assets, while the liability of at least one partner, the limited partner, is limited to the so-called commandite sum. The limited partner is released from liability within the limits of the contribution made to the partnership.

The partnership is represented by the general partners. If the general partner of a limited partnership is a limited liability company, the persons who will actually act on behalf of the limited partnership are the members of the management board of that limited liability company.

Limited partnerships keep full accounting books and, although they do not have legal personality, they are treated for income tax purposes as corporate income tax taxpayers.

A limited joint-stock partnership is the most legally advanced type of partnership. It is intended to conduct an enterprise under its own business name, where at least one partner, the general partner, has unlimited liability towards creditors for the obligations of the partnership, and at least one partner is a shareholder. Unlike a limited partner in a limited partnership, a shareholder is not liable for the obligations of the company.

This partnership combines features of partnerships and capital companies. It has share capital, the minimum amount of which is PLN 50,000, and shareholders receive shares in return for their contributions.

A supervisory board may optionally operate in a limited joint-stock partnership and is elected by the general meeting of shareholders. However, if the number of shareholders exceeds 25, the appointment of a supervisory board becomes mandatory.

The company is represented by the general partners.

Limited joint-stock partnerships keep full accounting books and are also treated for income tax purposes as corporate income tax taxpayers.

Capital companies are entities which become legal persons upon entry in the register of entrepreneurs of the National Court Register.

After the conclusion of the articles of association or the adoption of the company statute, but before entry in the register of entrepreneurs, they operate as companies in organisation. Such companies may, in their own name, acquire rights, including ownership of real estate and other rights in rem, incur obligations, sue and be sued.

Capital companies include:

1. limited liability company (spółka z ograniczoną odpowiedzialnością),

2. joint-stock company (spółka akcyjna),

3. simple joint-stock company (prosta spółka akcyjna).

Shareholders or partners make monetary or non-monetary contributions to capital companies, in return for which they receive rights in the form of shares or stocks.

A limited liability company may be incorporated by at least one natural person, legal person or another organisational unit without legal personality to which the law grants legal capacity.

The share capital of a limited liability company should amount to at least PLN 5,000, while the nominal value of a single share may not be lower than PLN 50. The size of the shares determines the voting rights held by the shareholders.

The corporate bodies of a limited liability company are:

a) the shareholders’ meeting,

b) the supervisory board or audit committee — the obligation to establish a supervisory body exists when the share capital exceeds PLN 500,000 and, at the same time, the number of shareholders exceeds 25,

c) the management board.

The task of the supervisory board is to exercise supervision and control over the company. The board consists of at least three members and has the right to inspect all company documents.

Another supervisory body which may exist in a limited liability company is the audit committee. It may operate instead of the supervisory board or alongside it, where its establishment is mandatory.

The management board of a limited liability company consists of one or more members appointed by the shareholders. Members of the management board may be appointed from among the shareholders or from outside their group. However, a member of the management board may not simultaneously sit on the supervisory board or the audit committee.

Members of the management board may be jointly and severally liable for the company’s obligations if enforcement against the company proves ineffective, unless they demonstrate the grounds for exemption from liability provided for in Article 299 of the Commercial Companies Code.

Limited liability companies are required to keep full accounting books regardless of the revenue generated.

A joint-stock company may be established by one or more persons, and its activity is based on share capital divided into shares. The minimum share capital of a joint-stock company is PLN 100,000.

Shareholders subscribe for shares in return for contributions and, as a rule, are not personally liable with their own assets for the company’s obligations. Their risk is mainly limited to the contribution made. The company itself is liable for its obligations as a separate legal entity.

The corporate bodies of a joint-stock company are:

a) the general meeting of shareholders,

b) the supervisory board,

c) the management board.

As in a limited liability company, the supervisory board exercises supervision and control over the company, with the difference that in a joint-stock company it is a mandatory body.

The management board of a joint-stock company consists of one or more members.

This legal form of conducting business is particularly useful for larger ventures that require substantial capital, multiple investors or plan to enter the capital market. Its advantage is the ability to raise funds through the issue of shares, while its disadvantage is a more complex organisational structure and greater formal obligations than in other companies.

The simple joint-stock company was introduced in Poland only in 2021 and is the newest form of conducting business as a capital company. It combines the features of a limited liability company and a joint-stock company, but is significantly less formalistic and requires virtually no initial capital.

For this reason, the simple joint-stock company is considered to be intended mainly for start-ups, new ventures and innovative companies that do not have significant financial resources at the initial stage of development.

To establish it, share capital of PLN 1 is sufficient. Shareholders subscribe for shares, but as a rule they are not liable with their own assets for the company’s obligations.

In a simple joint-stock company, shareholders may flexibly shape the organisational and management structure. The company may have a traditional management board, consisting of one or more members, or a board of directors combining management and supervisory functions, as well as a supervisory board.

If you are looking for legal support in this issue, please contact us.

Attorney at law - Michał Kubiak

e-mail: biuro@kancelariakubiak.pl or

phone/Whatsapp +48724293339

724 293 339

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