Incorporation of companies

For those entrepreneurs who are just thinking about setting up a company, we have prepared the possibility of comprehensive advice in this area. Legal advisors, attorneys-at-law and tax advisors, together during legal and tax consultations advise on which form of company to choose and which specific type of company to opt for.

Our clients can count on legal and tax recommendations in the area:

• Defining the principles of liability of natural persons for the company’s obligations,
• Outlining the degree of risk exposure of company representatives in a given type of planned business activity,
• Determining and calculating public and legal burdens related and unrelated to the company’s income generation,
• Discussing the degree of complexity and costliness of handling a given type of company in the future,
• Prepare a dedicated Memorandum of Association safeguarding the interests of the partners and defining their rights and obligations,
• Carry out the process of incorporation and registration of the company by a dedicated lawyer, including representation before the registry court,
• Legal support in obtaining any corporate approvals.

To entrepreneurs (partners and management boards of companies) who already run their businesses in the form of a partnership or a capital company, the lawyers of Skarbiec Law Firm provide legal and tax advice on:

• Full legal support (legal counsel or advocate) both in terms of providing recommendations as well as representation of companies before government authorities,
• Corporate services for companies, related to the preparation and verification of corporate and commercial documentation,
• Tax advisory services, provided by dedicated tax advisors, in the field of CIT, VAT and PIT,
• Bookkeeping, including maintenance of commercial books and full HR and payroll services by the accounting office Skarbiec Corporate Services sp. z o.o.

What type of company should I choose – a partnership or a corporation? Or maybe a civil partnership?

Partnerships are based on individuals or other business entities that may be partners in a partnership. This form of business offers, above all, a de-formalised way of functioning in the economic space – e.g. lower costs for legal services related to the day-to-day operation of the entity, such as notarial costs. It also provides greater flexibility in the creation of internal relations between partners, for example when creating the articles of association. However, partnerships are characterised by greater liability of partners for the company’s obligations than in the case of capital companies.

Partnerships include general partnerships, partnerships, limited partnerships and limited joint-stock partnerships.

Establishment and registration of general partnerships ”

Establishment and registration of partnerships ”

Formation and registration of limited partnerships ”

Formation and registration of limited liability partnerships “

A general partnership needs to be distinguished from the above-mentioned entities, which may be an interesting choice for entrepreneurs whose exposure to economic risk is small and, while conducting business on a small scale, they care about simple handling both on legal and accounting grounds (a general partnership may keep accounts on the basis of a revenue and expense ledger).

Another partnership worth considering is the limited partnership, which, although no longer characterised by simplified bookkeeping, limits the liability of some of the partners and offers attractive taxation to those who are liable.

Capital companies, as opposed to partnerships, are characterised by much greater security in the conduct of business, especially in the context of the liability of individuals for the company’s obligations. In certain circumstances, the boards of directors of capital companies may be exempted from subsidiary liability for the obligations of such companies, and the partners are not liable for the obligations of capital companies at all. Although the internal structure and regulations governing the operation of limited liability companies are characterised by greater formalism than in the case of partnerships, in many cases this circumstance is not decisive when choosing a form of business. The operation of limited liability companies is also often more expensive than that of partnerships, but partners and management boards of limited liability companies usually decide to bear the costs of ongoing legal services or ad hoc legal advice in order to achieve an optimal benefit in the area of business security.

Among capital companies, we distinguish between limited liability companies, simple joint-stock companies and joint-stock companies.

Establishment and registration of joint stock companies ”

Incorporation and registration of simple public limited companies “

Incorporation and registration of limited liability companies ”

It is worth mentioning that a limited liability company does not have to be taxed unfavourably at all. Despite double taxation for the benefit of the tax office (at the level of CIT and PIT), at a moderate (which does not mean small) scale of activity, i.e. turnover of up to EUR 2 million per year, the nominal taxation of money paid out by a partner in the form of dividend is 26.29%, which, in comparison with a one-person entrepreneur, who, although paying only 19% tax, is also obliged to bear the burden of health contribution at the level of 4.9%, makes the real burden higher by less than 2.5%. A limited company, therefore, need not ruin an entrepreneur’s wallet at all.

A separate form of company is a civil partnership, which can be established and registered under the provisions of the Civil Code.

When considering the incorporation and registration of a company, it is necessary to take into account not only the differences between a partnership and a corporation. It is also necessary to consider the distinctive features of each company that predispose it to specific types of business, such as the amount of initial capital, the method of representation, the rules for the payment of future profits, participation in losses or the tax environment, etc.

It should also be borne in mind that, usually, companies are established and registered in the traditional manner, i.e. by drawing up a memorandum of association, performing actions before a notary public and filing an application for registration of the company with the National Court Register. However, sometimes, if the factual circumstances justify it, a responsible and reliable lawyer should advise establishing a company in the S24 system – mainly in order not to expose the shareholders to unnecessary costs.