Limited company in Poland: is it the best way to start your business?

Błażej Sarzalski        01 October 2015        Please comment!

If you read a title of this post  you may wonder why to choose a limited liability company? It is certainly worth a closer look, since it is the most popular commercial company in Poland.

We’ve recently crossed the magic number of 300,000 registered limited liability companies in Poland. In the moment I write these words, the courts are accepting registry applications of another companies. Why LLC is so popular?

Limited Liability Company in the current legal status is a reasonable combination of all benefits of corporations and partnerships. It enables a development of small family busines while still suitable for doing business on a large scale. This company is also suited to not-for-profit and non-profit activities – can be a public benefit organization, or play a similar role as a foundation – it is clear that under the provisions of the Commercial Companies Code, this company can be created for any legally permissible purpose.

There are several reasons why you should precisely consider this form of business. Its big advantage that distinguishes it from private companies (eg, a general partnership) is that liability of shareholders for debts of the company is excluded. Of course as a shareholder you may lose your contribution, but you will not be liable for any obligations. Another advantage is that, unlike partnerships, LLCs  may have one shareholder (but please consider that option carefully!).

Another advantage is a flexibility of legal relationship in the company. Just as in partnerships, if we want to maintain a stable composition of shareholders, we can easily reduce the possibility of selling shares in the company. On the other hand, the possibility of establishing a supervisory board and audit committee, as well as the employment of managers to the board allows limited liability company to conduct business on a larger scale.

Some of your partners do not want your heirs or spouse in a company? That will not be a problem since it is possible to estop them from inheritance of shares.  Want to have same number of votes as your partner but more money from the company? Or maybe you want to be minority shareholder with right of veto in crucial decisions? Almost everything is possible.

The possibility of individualization of a company makes this form so popular.

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