Registered Partnership

General Information

Registered partnership (in Polish: spólka jawna) is intended to serve as a form of operating small and mid-size business by a small group of partners. Every partner is liable for obligations of the partnership without limits, with all his assets, but his liability is subsidiary i.e. a creditor of a partnership may carry out an execution only if execution from partnership's assets proves to be ineffective.

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

Incorporation

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

A partnership deed must be performed in writing. It shall include business name of a partnership, seat and address, specification and value of contributions made by each partner, objects of the partnership and duration of partnership if specified.

Registered partnership come into existence upon entry into the commercial register.

Capitalisation and Financing

Registered 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. None of partners is exempt from obligation to make a contribution. There are, however, different objects of contributions, including contribution in cash, contribution in-kind or performance of work or services. According to the code of commercial partnerships and companies there is no minimal value of the initial capital of registered partnership.

Board Structure

Every partner has the right and duty to manage the affairs within the scope of normal course of the partnership's business. The partnership deed or resolution of partners may provide that one or several partners are authorized to conduct the affairs of a partnership to the exclusion of other partners. If the partnership deed does not provide otherwise, in the event of disagreement concerning managing the affairs within the scope of normal course of the partnership's business, the unanimous consent of partners having the right to conduct affairs of the partnership is required. The unanimous consent of all partners is required in affairs outside the scope of normal course of the partnership's business.

Every partner has the right to represent the partnership in court and out-of-court actions. The partnership deed may provide that a partner is deprived of the right to represent the partnership or may require joint representation. Names of partners who have the right to represent the partnership shall be reported to the registration court.

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, registered partnership is obliged to maintain books of account. However, registered partnership which only partners are natural persons and its annual net revenue does not exceed the equivalent in PLN of 1.200.000,00 EUR, can maintain simple revenue and cost register.

Employee Participation in Corporate Bodies

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