Polish Limited Partnership Registration
If you’re thinking of creating a company within a Polish tertiary through a limited partnership, you must be aware of the new Polish law & with the process of polish limited partnership registration.
Do not worry, we will be covering an entire procedure for polish limited partnership registration. Simply stay with us till the end of this article. But first, let’s understandable Limited Partnership.
What is a limited partnership?
The concept of a Limited partnership can be described as a general partnership that has some of the advantages of a typical partnership with certain characteristics of a commercial business.
In the case of a limited partnership, the least number of members to be formed in Poland should be created by two or more individuals who are limited partners & the second as general partners.
Limited partners function as “silent partners” investing in capital similar to passive shareholders of a publicly traded company, but not having any involvement in the decision-making process of the firm.
Why should you choose the limited partnership?
As per the provisions of the new law, Limited partnerships which are based in Poland can register under their name, and be granted all rights & legal responsibilities of the firm. It is also permissible to utilize an abbreviation like “LLP”.
In the case of a limited partnership, the minimum number of partners is a general partner with unlimited liability and about the company, at least one partner should be limited in responsibility.
A limited partnership permits tax pass-through since its earnings are not taxed at a business level. Losses or income are included on the tax returns, and any tax due is paid at the personal level.
Limited and general partners are liable for different obligations and liability levels regarding debts. The partnership may not be able to pay for its assets. Every partner pays tax on their portion of profits.
Limited partners can utilize losses to offset the passive income they earn on the tax return. Losses of general partners may be used to protect additional income, up to the amount of their investment within the company, as their losses are typically considered passive.
How much Capital is required for the limited Partnership
A contract for limited partnerships stipulates the number of partners contributing to the partner. It is extremely flexible with regard to capital:
- It is an absolute minimal sum of capital that is specified in the legal regulations.
- The General Partner could join the partnership with the ownership of either movable or immovable real estate ( the real estate) as well as other property rights, knowledge, as well as services.
- A limited partnership can make a contribution through services or work, but only if contributions are sufficient to cover the total amount of the liability.
- Thus it is recommended that the limitation of the partnership amount of liability, which defines the scope of liability for the limited partner must be covered by the tangible assets, which are a security to the creditors of the business.
Procedure of Polish limited partnership registration
Below is the process of polish limited partnership registration that you must determine before forming a company in Poland:
Step 1:- Select a name for the business names of the limited partnership that should include the surname(s) of at least one general partner as well as an additional designation such as “spolka Komandytowa”.
Step 2:- You must have an official address (also referred to as your primary address).
Step 3:- Appoint a general partner GP who has no limit on liability for the obligations of the partnership towards the creditors of the partnership. GP is the sole manager of the partnership.
Step 4:- Choose the limited partner(s) who are sometimes referred to as “silent partners”. In other words, LP can make investments in the company, but they have no vote or influence over the day-to-day operations of the company.
Step 5:- Register at National Court Register.
Limited partnership structures provide insurance against liability up to the value of the capital investment of the company’s limited partners.
Cost of Polish limited partnership registration
When it comes to the costs associated with the polish limited partnership registration, this thing you should consider:
- The cost of making a notarial deed
- Costs of a certified translation (in the case of someone who doesn’t speak Polish),
- Court fees are to be entered into the National Court Register for an announcement in the MSiG:
- PLN 350, in event of registration online,
- PLN 600, for instance for the “traditional” registry,
- Lawyers / Law Firm charge for incorporation assistance.
Taxation of the limited partnership
Since January 1st, 2021, the Polish Tax Law implemented the double taxation of LLCs. In the meantime, limited partnerships are taxed under CIT taxation in the same conditions as a restricted liability corporation (or joint stock company, i.e. at 9%, and then 19% rate (subject to the fulfillment of relevant conditions).
From the 1st of January, 2021 Polish law allows an Estonian CIT (0% tax rate) for LLPs). However, every partner pays taxes (PIT or CIT depending upon whether the person is natural or a legal person) on the share of the earnings at the 19% rate.
Benefits of Polish limited partnership registration
Limited partnerships are particularly attractive to business partnerships when only a specific, short-term project is the primary focus; such as in the movie industry and real estate planning. Benefits of a polish limited partnership registration typically comprise:
Protection against limited liability – Limited partners are generally not held accountable for liabilities and business debts.
Pass-through taxation – Income tax is not paid by the company. Profits and losses are reported on partners’ tax returns and the tax to be paid is refunded at the individual level.
Control over the day-to-day business – General partners in the limited partnership enjoy full control over every business decision.
Flexible management – Partners are more flexible in their management structure.
Fewer formal requirements – Limited partnerships have lesser formal regulations and paperwork than corporations.
Another source of capital investment – The addition of limited partners can provide another source of capital investment without losing control, just as when you join a business partnership.
Conclusion
If you’re thinking of creating a company within Poland through a limited partnership and need legal advice in the process of polish limited partnership registration, our Odint Consultancy team of attorneys can assist you. They will also be able to help you to open an account with a bank in Poland for your business.
FAQ’s
The applicant should submit to the Registrar an application for the registration of the Limited Partnership together with a statement of particulars in compliance.
Registration of the partnership firm is not mandatory and it is the choice of the partners if they wish to register the partnership company or not.
Limited partnerships are a special kind that is a variation of a general partnership. Although it’s like general partnerships in many aspects, a limited partnership is comprised of one general partner and one or more limited partners.
A limited partnership isn’t an entity legal in its own right, but it can create accounts with banks to conduct business, and also contract with business partners, customers and customers
At least one partner has to be a general partner, with unlimited liability. One partner at least must have a restricted partner. The liability of this person is usually restricted to the amount of the investment