Overview: Polish Limited Partnership Registration
Thinking of opening a business in Poland?
A Limited Partnership, or “spółka jawna” in Polish, could be the ideal solution for you. This type of business structure offers a balance of flexibility and liability protection.
In this article, we will go over the ins and outs of forming a limited partnership in Poland.
We’ll go over everything from legal requirements and tax ramifications to perks and potential obstacles.
So, whether you’re an experienced entrepreneur or just starting, let’s look at why a Limited Partnership could be the best option for your Polish endeavor.
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.
How to Incorporate a Limited Partnership in Poland?
The following steps to register a limited partnership in Poland are:
1. Name & Structure of a Partnership: The first step is to choose the name and structure of the partnership. Partnership name should be unique and include the surname of at least one partner with the term “spółka komandytowa” or its abbreviation “sp.k.”. The limited partnership is requires at least two partners:
- General partner: Full liable for the partnership obligations
- Limited partner: Liability is limited to their contribution, known as the “sum komandytowa.”
2. Prepare Partnership Agreement: The second step is to prepare a partnership agreement. Partnership agreement must be prepared in the form of notary deed. In partnership agreement, you have to mention required information:
- Name and registered office of the partnership.
- Subject of activity (nature of the business).
- Details of partners and their contributions.
- Scope of responsibility for each partner, particularly the limited liability of the limited partner.
3. Registration with National Court Register: The third step is to register your limited partnership with the National Court Register (KRS). To do this, file an application form (KRS-W1) along with required documents. This can be done by:
- Online through the KRS system (S24 platform) or
- At a local court competent for the location of the partnership’s registered office.
Required documents include:
- Notarized partnership agreement.
- Declaration of the partners on contributions.
- Fee payment confirmation (for registration and publication in the Polish Court and Commercial Gazette).
4. Obtain a REGON, NIP, and VAT Number: The fourth step is to obtain a REGON, NIP, and VAT Number. After registration of your limited partnership with KRS, your limited partnership will automatically receive a REGON number (statistical number) and a NIP number (tax identification number). If the partnership is involved in activities subject to VAT, apply for VAT registration.
5. Open a Bank Account: The fifth step is to open a bank account for your new limited partnership. Limited partnerships need a bank account for conducting business transactions and managing financial operations
6. Publication in the Court and Commercial Gazette: The sixth and final step is to publish your limited partnership in the Court and Commercial Gazette. The court will publish the registration of the limited partnership in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy), providing public notice of the newly established entity.
Document Required to Register a Limited Partnership in Poland
The following documents required to register a limited partnership in Poland:
- Partnership Deed
- Partner’s identity cards or valid passports
- Registered Office address
- Power of Attorney
- Declaration of Capital Contribution
- Payslip of Registration Fee
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 concerning 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.
Cost of Polish Limited Partnership Registration
The cost to register a limited partnership in Poland includes:
- PLN 500 for entry into the National Court Register
- PLN 100 for Court and Commercial Gazette fee
- Cost of making notary deed
- PLN 250 for online registration through the S24 system.
- PLN 100 for the translation fee
Total Estimated Costs:
- Basic Registration (self-handled): Approximately PLN 800 to PLN 1,500.
- With professional assistance: Costs can go up to PLN 5,000 to PLN 15,000 depending on the notary and legal services.
Taxation of Limited Partnership in Poland
Since January 1st, 2021, the Polish Tax Law has enforced double taxation on LLCs. Meanwhile, limited partnerships are taxed under CIT in the same way as a restricted liability corporation (or joint stock company), starting at 9% and subsequently up to 19% (subject to meeting certain conditions).
From January 1, 2021, Polish law enables an Estonian CIT (0% tax rate) for LLPs. Every partner, however, pays 19% income tax (PIT or CIT depending on whether the person is a natural or a legal person) on their share of the revenue.
Benefits of Setting up a Limited
Partnership in Poland
- 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 fewer 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, OnDemand International team of lawyers 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
