Limited joint-stock partnership in Poland
A limited joint-stock partnership is one of the most complex companies existing in the Polish legal system. It combines features of partnerships and capital companies. In my article I describe the rules of its operating, elements that its statute must have, how it regulates the liability of its partners and what needs to be done to establish it.
What is a limited joint-stock partnership (spółka komandytowo-akcyjna) in Poland?
A limited joint-stock partnership is a commercial company, classified as a partnership, which, it is worth emphasising, has many features characteristic of capital companies. A limited joint-stock partnership operates a business under its own firm. It may own property, including real estate. It is established upon being entered in the National Court Register. It is also the only one of the partnerships with share capital amounting to at least 50,000 PLN.
Importantly, a limited joint-stock partnership does not have legal personality, but it does have legal capacity and the capacity to perform acts in law. There are two types of partners in this type of partnership: general partners and shareholders, who may be natural persons, legal persons and organisational units without legal personality that have legal capacity. What should not be omitted is the fact that it is not possible for a partnership to have general partners alone or shareholders alone. Each limited joint-stock partnership must have at least one general partner and at least one shareholder.
Functioning of a limited joint-stock partnership
A limited joint-stock partnership is the only one of the group of partnerships that, apart from the management board in a professional partnership, that has its own bodies. A body that is obligatory in a limited joint-stock company is the general meeting, which represents the interests of the shareholders and makes strategic decisions regarding the company. The appointment of a supervisory board is optional and depends on the shareholders’ will.
The general meeting is convened by the shareholders, who – in principle – have the right and duty to manage the company’s affairs. The articles of association may, however, regulate this matter differently, including granting the right to manage the company’s affairs to third parties, however, it should be noted that a general partner may not be entirely excluded from managing the company’s affairs to the benefit of third parties (third parties do not include shareholders).
Decision-making in a limited joint-stock company
The most important decisions in a limited joint-stock partnership are made by the general meeting. However, many of the resolutions passed by this body require the consent of the general partners, which only emphasizes their unique role in the company. The consent of all general partners is required to, among other things, disposal of real estate, change the amount of share capital, amend the articles of association or dissolute the company.
The consent of the majority of the general partners is required, among other things, when deciding on loss coverage. However, certain resolutions of the general meeting may be passed without the consent of the general partners. These include resolutions to consider and approve the financial statements or to discharge the general partners and members of the supervisory board from fulfilling their duties. Important decisions are also made, within the scope of the powers conferred upon them, by those who conduct the affairs of the company and by the supervisory board (if appointed). In principle, their resolutions are adopted by an absolute majority of votes.
Representation in a limited joint-stock company
In principle, all general partners have the right of representation in a joint-stock limited partnership, with the reservation that it is possible to deprive them of this right under a valid court ruling or under provisions of the articles of association. It is also possible to limit the right of representation by adopting a model of joint representation in the company. It is worth emphasizing that in the absence of specific statutory provisions, each general partner may represent the company independently. Importantly, a shareholder can only represent the company as a proxy.
Articles of association of a limited joint-stock company
The articles of association of a limited joint-stock partnership must be executed in the form of a notarial deed and must include:
- the company’s name and registered office;
- define the subject of the partnership’s activity;
- define the duration of the partnership, if it is fixed;
- identify the contributions made by each partner and their value;
- indicate the amount of share capital, the method of its collection, the nominal value of shares and their number with an indication whether the shares are registered or bearer shares;
- indicate the number of shares of each class and the related rights, if shares of different classes are to be introduced;
- the surnames and forenames or business names of the general partners and their registered offices, addresses or addresses for service or electronic delivery;
- the means of organizing the general meeting and the supervisory board, if the law or the articles of association provide for the appointment of a supervisory board.
Liability debts of a limited joint-stock partnership’s
As in the case of a limited partnership, also in a joint-stock limited partnership, the scope of liability depends on the status of the partner, i.e. whether they are a general partner, i.e. liable towards the partnership’s creditors without limitations, with all of their personal assets, or a shareholder, with the difference that, unlike limited partners in a limited partnership, shareholders are not liable to any extent for the partnership’s obligations. An exception to this rule occurs if the partnership’s business name includes the shareholder’s name. They are then liable for the obligations of the partnership on the same basis as a general partner.
Differences between a limited partnership (spółka komandytowa) and a limited joint-stock partnership (spółka komandytowo-akcyjna)
Despite the partnerships being similar in many respects, there are a few factors that distinguish them from one another. What differentiates a limited joint-stock company from its counterpart is the fact that a limited joint-stock partnership is a commercial company. This is because it has shareholders whose interests are pursued through the activity of a general meeting. Their share in the company is both a factor generating the inflow of capital and at the same time a controller and barrier to the unrestricted activity of the general partners, as it is the case in a limited partnership. It is also worth mentioning that is is much easier to establish a limited partnership. In contrast to a limited joint-stock partnership, it does not require the payment of share capital, which significantly simplifies the process of establishing the company.
How to establish a joint-stock limited partnership in Poland? – a to-do list
- Executing the articles of association in the form of a notarial deed and signing it by the founders of the partnership.
- Making contributions by the general partners.
- Making contributions by the shareholders.
- The subscription of a sufficient number of shares of the company by the shareholders.
- Filing an electronic application for company registration through the Court Registers Portal (as of July 1, 2021, registry courts in Poland will no longer accept paper applications).
- Registration of the company in the National Court Register by a registry court.