Today we will have a closer look at the opportunities that Polish law is giving regarding partnership.
What is your type?
In general, business activity may be conducted in any form described by law. However, in some cases, it is required to use strictly defined form of activity, for example if you like to open insurance company, bank, fund companies you need to operate solely as joint-stock company.
There are four types of partnerships in polish law:
- general partnership
- limited liability company
- limited partnership
- limited joint-stock partnership
The simplest one is general partnership, which suits best micro businesses. It has to be conducted by at least two entities, it does not possess legal personality but it has legal capacity.
It needs to has a least two founders. It can be a natural person, legal person organisational units without legal personality to which the applicable laws have granted legal capacity.
In order to establish it, partners conclude articles of association (written form is needed). The partnership is submitted to the competent registry court by one of the partners, which is the National Court Register (Krajowy Rejestr Sądowy).
Provisions regarding partner’s shares in profits and losses may be set forth in the articles of association, in the absence of relevant contractual provisions – each partner has an equal share, regardless of the type and value of their contribution.
There are different types of liability (unlimited, personal, joint and several, subsidiary)
If you want to know more about accession to, exit from the partnership, taxation, transformations or mergers we strongly advice you to visit following link http://www.paiz.gov.pl/polish_law/forms_of_doing_business#5 and choose general partnership you will get handy info in PDF.
Limited liability partnership
This type is made for freelance profession (architects, securities brokers, etc). Both partners have to have the right to practise freelance professions specified by law. There are two types of partners in limited partnership – at least one general partner bearing unlimited liability and one limited partner liable to the amount specified in the articles of association. As previous partnership it does not possess legal personality but it has legal capacity.
Actions required to establish it are the same as in general partnership.
The appropriate register is as as well Entrepreneurs’ register of the National Court Register (KRS)
What is characteristic for this type is lack of a partner’s liability for a partnership’s obligations arising in connection with the practising of a freelance profession within the partnership by the remaining partners or for with responsibility for employed person.
Limited joint stock partnership
If you have know-how but no money to start business and you found someone who is ready to invest in your project this is the best form of business activity for you. It is a combination of active partner (general partner) with knowledge /experience and shareholder, who is a passive partner and decides to involve his surplus capital, hoping for bigger amount as return.
This type is based on shares – the minimum share capital is 50,000 PLN , nominal value of a share can’t be lower than 0.01 PLN. Divided shares need to have equal nominal value.
The appropriate register is Entrepreneurs’ register of the National Court Register (KRS)
Limited joint-stock partnership requires statute of partnership in a form of a notarial deed.
As a general rule partner and a shareholder participate in the profits of the partnership in proportion to their contributions made to the partnership. Regarding liability each general partner is liable for the obligations of the joint-stock partnership without limitation with all his assets jointly and severally with the remaining general partners. It is needed to be underlined that creditor of the partnership may conduct execution from the general partner’s assets only where execution from the assets of the partnership has proved ineffective.
The important rule provides that the shareholders are not liable for the obligations of the partnership.
Taking into consideration profits and losses : partner and a shareholder participate in the profits of the partnership in proportion to what they contributed to the partnership, i.e. proportionally to the value of their contributions, regardless of the type of capital or fund they have been allocated.
In joint-stock partnership you get in by buying shares and you can be excluded from the partnership by appropriate majority of shareholders holding jointly certain amount of the share capital.
There are specific bodies responsible for running the partnership’ affairs (supervisory board)
This type is a mixture of solutions used in other partnerships. Limited partnership must be established and conducted by at least two individuals or legal persons or organisational units without legal personality which was granted a legal capacity.
Articles of association are required to have a form of notarial deed. The appropriate register for this partnership is also Entrepreneurs’ register of the National Court Register (KRS)
At least one partner is liable to the creditors for the debts and obligations of the partnership without limitation (the general partner) and at least one partner has a limited liability.
In limited liability partnership and in limited partnership situation looks the same : new person may enter into all of the rights and obligations of a current partner if such option is stipulated in in the articles of association, remaining partners approved it in writing.
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