In this video, I will explain how to create a legal entity in Poland with a share capital of just one zloty. We will discuss how to raise legal money through crowdfunding and how to contribute money to the share capital without paying taxes. I will also explain how to issue your own shares, which is possible thanks to a new legal form — the Simple Joint-Stock Company (SJSC). So, let’s get started!
What is a Simple Joint-Stock Company (SJSC)?
On July 1, 2021, Poland introduced the possibility of creating a Simple Joint-Stock Company (SJSC). This form of legal entity is perfect for startups and those who want to quickly open a company. The share capital can be as low as a symbolic one zloty.
This innovation is particularly useful for those involved in cryptocurrency or raising funds from a large number of investors. The SJSC is a hybrid between a joint-stock company and a limited liability company, where you can have shares and even sell them on the open market.
Advantages of the SJSC
The Simple Joint-Stock Company has several advantages, making it an attractive choice for entrepreneurs in Poland:
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No Financial Barriers You can create an SJSC with just one zloty, and the company can be registered via the s24 system within 24 hours. The removal of formal and financial barriers at the startup phase allows for faster business operations.
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Share Capital In an SJSC, instead of share capital, there is share capital. Shares have no nominal value and can be obtained in exchange for contributions such as labor, services, or technology. This means that founders can make intangible contributions, simplifying the process.
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Issuance of Own Shares The SJSC allows you to issue your own shares, which means that entrepreneurs can sell parts of their company. For example, if you have an idea for a startup, you can create a company and sell 1000 shares with a nominal value of 10 zlotys each to raise funds for the implementation of your idea.
Taxation and Rules
The taxation system for the SJSC has some specific features. The taxation system is similar to that used for joint-stock companies. Poland has a double taxation system, so the main taxes you’ll encounter are the income tax (PIT) and corporate income tax (CIT).
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Personal Income Tax (PIT) The personal income tax for small businesses is 9% for annual turnover up to 2 million zlotys. After exceeding this amount, the rate increases to 19%.
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ZUS for Shareholders Shareholders who are not part of the company’s management are not required to pay social security taxes (ZUS). This makes the SJSC more attractive to external investors since they can avoid additional costs.
Disadvantages of the SJSC
Although the SJSC has many advantages, there are also disadvantages to consider. Each shareholder must be familiar with the Articles of Association (AOA), and there is a requirement to maintain an online shareholder register. This creates additional obligations and may become costly in the long run.
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Shareholder Register The management of the shareholder register can be handled by specialized investment companies or brokerage firms, which imposes additional expenses on the company.
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Protection of Shareholders According to Polish law, 8% of the company’s profits must be allocated to reserves for payments and rewards to investors. This could put pressure on the distribution of funds within the company.
Example of Creating an SJSC in Poland
Let’s look at a practical example. If you want to open a car repair shop (STO) in Poland, you can create an SJSC with 1000 shares. Suppose you decide to sell 250 shares to one investor in exchange for their financial support, and the rest of the shares are sold as the business grows. The valuation of shares depends on your business strategy and can change as the company develops.
Conclusion
The Simple Joint-Stock Company is an interesting tool for startups in Poland, allowing you to quickly open a business with minimal costs. It provides the opportunity to attract investments and make mistakes with minimal formal barriers.
I highly recommend considering the possibilities of an SJSC if you are planning to start a business in Poland. I hope this information was useful! If you need help with opening a company in Poland, feel free to reach out for assistance.
