How is Poland different: companies in the UK

How is Poland different: companies in the UK

If you’re a UK-based businessman worth your salt, you did a thorough research on companies in the UK before you started to operate yours. The information is readily available on many portals and it boils down to two main types (not counting the sole traders) – companies and partnerships.

Not so when you want to explore your opportunities in other countries – the types of companies can be vastly different than what you’re used to and the subtle differences can send you to bureaucracy hell or, even worse, cause significant financial losses. You could read all the information supplied by the government, but most of it is in other languages, which you probably don’t know.

This is the main reason for this post – since I’m passionate about Poland and want to help you discover its great business potential, I prepared a handy reference about UK and Polish business types to start you off. It’s actually a start of bi-weekly series, where I’ll compare Polish business entities to those in US, Australia and New Zealand (UK being done already).

This reference will omit the sole trading, however it’s worth mentioning that its Polish form, indywidualna działalność gospodarcza, is one of the most popular business formats in Poland (data from CEIDG the Polish agency for business identification and registration). This post will also just touch upon the state enterprises (legal entities owned by the Polish government and acting in business on its behalf) as Polsteam, which you might want to do business with, but won’t be able to open. The spółka partnerska (a partnership company) is also of little interest since it’s restricted to a group of independent professionals (but you can ask me about it in the comments!).

Spółka cywilna (a so-called civil partnership) is also a very popular business entity in Poland, and it’s not actually a company at all – it’s more of a contract between agreeing parties as to the partnership. Since it doesn’t exist as its own legal person, the partners are responsible for all its losses. It can be non-profit and in this respect it can be likened to a non-profit company. The starting capital isn’t needed and you can form this ‘company’ for a set or indeterminate time. Since this company doesn’t have legal personality, all invoices need to bear the names of all its owners. Unless agreed otherwise, the partners participate in profits in the same proportion in which they participated in the contributions. Since UK law doesn’t differentiate between civil and commercial companies, this entity doesn’t have a UK equivalent.

Spółka z ograniczoną odpowiedzialnością (a limited liability company) is actually the most popular business type in Poland. It belongs to the so-called commercial companies (and as such is subject to KSH, Polish commercial companies code) and the partners aren’t responsible for its debts with their own monies, only with the company capital. You can recognise it by sp. z o.o. at the end of a company name. Minimum share capital is 5 000 PLN and its closest to a private company limited by shares in the UK. The main differences between this company and private company limited by shares are tax-related and it’s strongly advised to refer to a good accountant before making significant decisions in this regard.

Spółka jawna (a general partnership) – this company has no legal personality, but it does have some legal abilities, thanks to which it’s sometimes identified as a partial legal person. The partners are responsible for debts with their personal funds, but only after the company funds are depleted. The president does not get special reimbursements for company presidency. The main difference between this company type and English general partnership is that the Polish spółka jawna requires registration; it does not exist until registered.

Spółka akcyjna (a joint stock company) is a company where stocks can be bought by shareholders and allows for an unequal business ownership. In this, it’s similar to British public limited company.

Spółka komandytowa (sometimes called limited partnership) does not really have an equivalent in UK system. It’s similar to general partnership, but at least one partner is responsible for its debts with his own monies and the other is only responsible up to the contributed amount.

Spółka komandytowo-akcyjna combines the partner responsibilities of the type above with shareholder responsibility for debts to the amount of shares held. Its minimum share capital is 50 000 PLN and it doesn’t have a UK equivalent.

We will finish with spółdzielnia – it’s not a company, but an association closest to UK cooperative, which is also quite popular in Poland. You can sometimes recognise it by Spółdzielcz(-y/-a) after the company name.

This information is by no means exhaustive and if you’d like to know more you can take a look at the English translation of the CEIDG site or you can ask me a question in the comments (or contact me for a no-obligation consultation).

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