Limited Partnership

General Information

A limited partnership (in Polish: spólka komandytowa) is a partnership in which at least one partner (general partner) bears unlimited liability towards the partnership's creditors and the liability of at least one partner (limited partner) is limited.

A limited partner is liable for the partnership's obligations only up to the amount of the commandite sum. He is released from liability up to the value of contribution made to the partnership. The general partner's liability is the same as partner of registered partnership.

Limited partnership is not a legal person, but can, in its own name, acquire rights, contract obligations, sue and be sued.

The provisions on registered partnership applies accordingly to limited partnership, unless Polish code of commercial partnerships and companies provides otherwise.

Incorporation

Limited partnership may be established by at least two individuals, partnerships, companies or other legal entities.

A partnership deed shall be made in the form of a notarial deed. Limited partnership come into existence upon entry into the commercial register.

Capitalisation and Financing

Limited partnership has its own assets, which consists of property contributed to or acquired by the partnership during its existence. Contributions made by each partner and their values are determined by the partnership deed. Limited partner cannot be exempt from obligation to make a contribution. Performance of work or services cannot be an object of contribution of limited partner, unless value of his other contributions is not lower than the commandite sum. 

According to the code of commercial partnerships and companies there is no minimal value of the initial capital of limited partnership.

Board Structure

If the partnership deed does not provide otherwise, limited partner has no right to manage the affairs of the partnership's business. He may only represent the partnership in the capacity of a proxy.

General partner has the right and duty to manage the affairs of the partnership and right to represent the partnership in court and out-of-court actions.

The partnership deed may provide that a general partner is deprived of the right to represent the partnership or may require joint representation.

Annual Costs

Annual Costs of operating a business vary depending on size and object of partnership. They may include legal and accounting services as well as costs of licenses and permits. In some types of businesses possession of civil liability insurance is mandatory.

Corporation Taxation and Financial Reporting

The main advantage of all types of partnerships in Poland is the income tax system. A partnership is not taxable as a separate entity, only partners are obliged to pay tax on income derived from partnership.

In Polish personal income tax system progressive tax is a general rule. However, every individual conducting economic activity may choose to pay proportional tax (flat tax) at a rate of 19%.

According to article 2 of the accounting act, limited partnership is obliged to maintain books of account.

Employee Participation in Corporate Bodies

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