Types of Business Entities in Poland

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One of the first questions we as lawyers get from people who want to start their own company is: “Which company should I choose?”. The answer, as is usually the case with legal issues, is not simple. In Poland, in addition to a sole proprietorship, we have as many as seven types of commercial companies to choose from. These companies are described one by one in the Commercial Companies Code.

What to consider when choosing a type of company in Poland?

Before choosing the right legal form for your future company, it is worth considering several important issues. These will help you choose the right company. These include such issues as:

  1. whether the company is to be run independently or with other partners,
  2. whether you will want to sell part of the company’s shares in the future,
  3. what contributions are to be made to the company,
  4. what business model you want your company to have and what you want it to do,
  5. whether you want to attract an investor to the company in the future.

Types of companies in Poland

Companies in Poland can be divided into two groups. These are partnerships and capital companies. In partnerships, the most important component is its partners. These companies do not have a separate legal personality. They also do not have shares. Partnerships do not exist without their partners. Capital companies, on the other hand, are a separate entity and have legal personality. The structure of shareholders in them can easily change without affecting the very existence of the company.

Types of partnerships in Poland

There are four types of partnerships in Poland. In the order specified in the Commercial Companies Code, these are general partnership, professional partnership, limited partnership and limited joint-stock partnership.

The basic form of partnership is the general partnership. The Code even indicates that a general partnership is a partnership that operates a business under its own name and is not another commercial company. All partners in this partnership have the same status and are liable with all their personal assets for the partnership’s obligations.

A professional partnership is a company formed by partners (partners) for the purpose of practicing a free profession in a company that operates an enterprise under its own name. Thus, not everyone can establish a partnership. Only representatives of the professions indicated in the Commercial Companies Code can do so.

Partners in the partnership can be persons authorized to practice the following professions: attorney, pharmacist, architect, physiotherapist, civil engineer, auditor, insurance broker, laboratory diagnostician, tax advisor, stockbroker, investment advisor, accountant, physician, dentist, veterinarian, notary public, nurse, midwife, legal advisor, patent agent, property appraiser and sworn translator.

As for the liability of partners, a partner is not liable for the partnership’s obligations arising in connection with the other partners’ exercise of a liberal profession in the partnership, as well as for the partnership’s obligations arising from the acts or omissions of persons employed by the partnership under a contract of employment or other legal relationship who were under the direction of another partner in providing services related to the partnership’s objects.

A limited partnership is a partnership that has two types of partners. These are the general partner and the limited partner. The general partner is entitled to manage the affairs of the partnership. His liability is not limited. The general partner is liable for the company’s obligations with all his personal assets. On the other hand, we have a limited partner, who has a passive function in the company – he cannot, for example, manage its affairs or represent the company. But in return, his liability is limited to the limited partnership sum, i.e. to his contribution.

The last partnership is the limited joint-stock partnership. This is a variation of the limited partnership, with shareholders instead of limited partners.

Types of capital companies in Poland

The Polish Commercial Companies Code provides for three types of commercial companies. These are the limited liability company, the joint-stock company and the simple joint-stock company. Each of these companies has legal personality and is an independent entity from its shareholders. The company’s shareholders are not liable for the obligations of these companies. The company is liable for its obligations. In some cases, the members of the board of directors may also be liable