What types of business organizations exist in Poland and how do they differ?

In Poland, the principle of “freedom” of entrepreneurial activity applies, which means that every inhabitant can start a business in any form in which he or she wants. There are specific legal forms within which business activities can be conducted.

There are two main issues to consider when deciding on the form of business activity:

What kind of business do I want to do?
Will I operate alone or with a partner?

In this article we will present you the advantages and disadvantages of all legal forms in Poland.

Содержание:

Individual entrepreneur – jednoosobowa działalność gospodarcza
Spółka cywilna
Spółka jawna
Spółka partnerska
Limited Partnership – spółka komandytowa
Spółka akcyjno-komandytowa
Limited Liability Company – spółka z ograniczoną odpowiedzilnością
Spółka akcyjna
Prosta spółka akcyjna
Accounting and the chosen form:
Can a foreigner open a business in Poland?
Where to start? Recommendation from the experts
Часто задаваемые вопросы

Individual entrepreneur – jednoosobowa działalność gospodarcza

One of the most commonly chosen legal forms of doing business is the sole proprietorship. It is most suitable for micro and small businesses that are not exposed to high risk.

Advantages	Disadvantages
low cost of maintenance free and fast registration independence no obligation to keep complete accounting (with few exceptions)	responsibility for all their assets, including their family (in the case of joint property) obligation to pay ZUS at the statutory level, regardless of whether the company makes a profit or a loss

Spółka cywilna

If you choose this form, you need a minimum of 2 partners between whom the contract will be made and both must be listed on the CEIDG. The contract must be in writing, but it does not have to be a notarial deed.

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Each partner calculates the income tax on his or her own, taking into account his or her share. If its members are individuals and the company’s turnover does not exceed 2 000 000 euros, the accounting can be done in a simplified form, i.e. income and expense book/recording of income for a lump sum.

Advantages	Disadvantages
low maintenance costs free and quick registration no obligation to keep books (with few exceptions) simple structure – each partner may represent the company no start-up capital required	joint and several liability of partners with all their assets – including their family (in the case of joint property) for the company’s obligations formal inheritance difficulties (so-called inheriting administrator) obligation to pay ZUS at the statutory level, regardless of whether the company makes a profit or a loss Impossibility to sell an interest in the company

Spółka jawna

When choosing such a form as spółka jawna, one has to undertake to draw up the articles of association in writing and register with the National Court Register (KRS). A nice bonus is the freedom in the wording of the charter – for example, it can contain a clause stating that the partner has no right to represent the company.

Spółka does not pay income tax, partners are required to do so, each of them individually pays tax depending on their share.

Advantages	Disadvantages
no obligation to keep books (with few exceptions) low start-up costs (cost of registration at the National Court Registry) articles of association do not require a notarial deed no statutory minimum fee, it may amount even to 1 zloty	joint and several liability of partners with all their assets registration in the National Court Registry requires payment of fees annual information about the lack of obligation to prepare financial statements

Spółka partnerska

Partnerships have their own individual character – only members of liberal professions such as doctors, architects, accountants or lawyers can establish them.

When establishing a partnership, it should be remembered that all its members are liable for the company’s obligations.

Advantages	Disadvantages
lack of necessary capital limited liability of partners no obligation to keep books (with few exceptions)	only freelancers can be partners registration in the National Court Registry, associated with the cost and waiting time of recording

Limited Partnership – spółka komandytowa

A limited partnership is a form of entrepreneurial activity in which one of the partners has full responsibility for the firm, and the liability of the other partners is limited to the amount of the limited partnership, which is specified in the articles of association. It is often chosen by entities with different financial capacities, where one has the necessary financial resources and the other has the idea for the project.

The company and the individual partners are required to pay income tax – therefore subject to double taxation.

Advantages	Disadvantages
possibility of forming the sphere of responsibility – limited liability of the limited partner no minimum authorized capital	an agreement in the form of a notarial deed registration in the National Court Registry, which incurs costs and waiting times for entries requirement to keep complete records full liability of general partners limited decision-making powers of limited partners

Spółka akcyjno-komandytowa

A limited joint-stock partnership contains features of two types of companies – a joint-stock company and a limited partnership. The basis for the functioning of this type of company is the articles of association (requires a notarial deed).

As a rule, general director has unlimited liability for the company’s activity, while shareholders are not liable for the company’s obligations.

Tax is paid by both the company and its partners – (under the same conditions as in the case of dividends in a limited liability company) and limited partners.

Advantages	Disadvantages
for the shareholder – exclusion of liability for the company’s obligations the possibility of raising capital by issuing shares for general partners – a decisive influence on the company’s activities the possibility of financing capital-intensive ideas, for the implementation of which the originator has no funds and invites a group of persons (shareholders) to finance	High minimum authorized capital (50,000 PLN) full accountability drawing up a charter in the form of a notarial deed the cost of making a notarial deed (notary fee), making an entry in the commercial register (1000 PLN) and its publication (the charter must be taxed on civil transactions at a rate of 1% of the value of the share capital)

Limited Liability Company – spółka z ograniczoną odpowiedzilnością

A limited liability company (sp. z o.o.) is, apart from a sole proprietorship, the most frequently chosen form of business activity in Poland. A limited liability company has a legal personality, which means that it is a separate legal entity in its own right. The financial liability of shareholders is limited to the amount of the capital contribution made to the company.

Advantages	Disadvantages
possibility of limiting the scope of liability by the company’s assets – exclusion of partners’ liability by their personal assets low registered capital 5000 PLN simple registration via the Internet thanks to s24 portal any foreigner may choose this form of running a business it can be opened remotely	registration in the National Court Register requirement to keep books of account obligation to file annual financial statements

Spółka akcyjna

A joint-stock company is the most common form chosen by companies planning to list on the stock exchange. It requires a share capital of PLN 100,000. It is the contribution of the founders, who become co-owners of the company, i.e. shareholders.

Annual financial statements must be audited by an auditor every time, full financial statements are required.

Advantages	Disadvantages
no influence of small shareholders on the company’s activities ease of accumulating cash and the ability to raise additional capital by issuing shares or bonds can unite a large number of shareholders	shareholders are not liable for the company’s obligations obligation to submit annual financial statements obligation to keep complete accounting (higher cost of accounting services) costs of establishing a joint-stock company are considerably higher than, for example, those of a sole proprietorship obligatory share capital has to be at least PLN 100,000

Prosta spółka akcyjna

Its main purpose is to help obtain funding, which means it is chosen when developing startups.

A simple stock company is more flexible than other forms, giving freedom to choose how contributions are made (i.e. contributions are not only allowed in cash).

Advantages	Disadvantages
easy registration possibility of dissolution of the company without liquidation ease of accumulating funds and the ability to raise additional capital through the issuance of shares or bonds shareholders are not liable for the company’s obligations (can be a disadvantage)	can unite a large number of shareholders (can be an advantage) no influence of small shareholders on the company’s activities formalities and costs related to the issue of shares obligation to submit annual financial statements the cost of establishing a joint stock company is considerably higher than, for example, a sole proprietorship the obligation to keep full accounts

Accounting and the chosen form:

Since the choice of legal form affects what accounting will be done, the following table lists the forms of business and accounting entries that are required or optional.

Legal forms	Simplified tax accounting – KPiR or a lump sum payment (income records)	Accounting books – the need for an accounting office or a qualified in-house accountant
Jednoosobowa działalność gospodarcza	Yes	Voluntarily
Spółka cywilna	Yes	Voluntarily
Spółka jawna	Yes	Voluntarily
Spółka partnerska	Yes – only KPiR	Voluntarily
Spółka komandytowa	No	Yes – definitely
Spółka akcyjno-komandytowa	No	Yes – definitely
Spółka z ograniczoną odpowiedzialnością	No	Yes – definitely
Spółka akcyjna	No	Yes – definitely
Prosta spółka akcyjna	No	Yes – definitely

Can a foreigner open a business in Poland?

For a long time, Poland was closed to foreigners and only Poles could do business. In recent world events, Poland has expanded its borders, so now people who have any of the following reasons can open a business here:

permanent residence permit;
long-term resident’s EU residence permit;
temporary residence permit issued to a family member of a foreigner (family reunification);
temporary residence permit issued for the purpose of studying at a university;
temporary residence permit, provided they are married to a Polish citizen;
temporary residence permit issued for the purpose of conducting business activities (issued in connection with the continuation of an existing business on the basis of an entry in the CEIDG*).

*CEIDG – Central accounting and business information.

Foreigners who have a valid Pole Card and who enjoy temporary protection in Poland can conduct business on the rights of Poles.

Where to start? Recommendation from the experts

Before you decide to register with CEIDG\KRS and start up, we advise you to do a tremendous amount of work on market research, choosing the type of activity, choosing the accounting, finding a legal address and choosing the form of taxation.

In order to qualitatively perform the above items you need to make a business plan and calculate how much in view of all the possible variables you will earn per month, per year, so you do not lose more on taxes than you can.

In addition, we advise you to be responsible for the choice of the city in which you want to open, because under each case your client. For example, the city of Wroclaw is considered the most youthful in Poland, as there is the largest number of students and when choosing Wroclaw, they are your main audience.

If you pay attention to our tables, where the advantages and disadvantages of activities in Poland are presented, it becomes clear why the IE (jdg) and the TOV (spółka z o.o.) are the most popular destinations. We would like to emphasize once again the fact that these two forms of doing business are available to foreigners (in the case of the sole proprietorship there are exceptions), so our team helps with the registration of business in the form of these two forms.

Часто задаваемые вопросы

Is there self-employment in Poland?

There are three options for becoming self-employed in Poland:
- to open a sole proprietorship (jednoosobowa działalność gospodarcza)
- Run an unregistered business (more about it below)
- Open LLC (there is an option to open the so-called jednosobową spółkę z o. o.), this case has some important "but", because despite the fact that you open a company (formally), but you do business as if it was a sole proprietorship, so you must pay ZUS, which include contributions to pension insurance, disability insurance, accident insurance, also can voluntarily insure yourself against disease.

Can I open a branch of a foreign company?

Yes, you can, but the branch can only work in those areas in which the main foreign company operates, also the branch can work only after its inclusion in the People's Court Registry (KRS).

Is it possible not to register a company / individual entrepreneur and not to pay taxes?

Yes, this is called "unregistered business activity", a good example of such activity would be sales on instagram, but there are nuances:
- You may not register such activities, but you are required to report income from them in your annual report
- The profit can't exceed half of minimalnej krajowej - minimum wage brutto (i.e. now the "minimal" is 3010 PLN, according to the income from unregistered activities can't exceed 1505 PLN per month).

Can I get a residence card for my business? (temporary residence permit)

Yes, but in order to do that you have to prove that the company really works and Poland is interested in it, namely:
- The company must work legally and bring a constant profit, the minimum amount of which in each voivodeship is different. This information is constantly changing, so you need to separately specify (update), but it will be about 10 thousand euros per year and above.
- The firm must officially employ Poles or foreigners with a work permit (zezwolenie na prace dla cudzoziemca), moreover, at the time of submission they must work in the firm for more than a year (12 months)

Poland now provides many opportunities and ways of doing business, creates convenience for both its citizens and visitors. No one knows when this country will be “closed” to foreigners again, so we recommend developing a strategy and launching a project.