In Poland there are several legal forms of conducting business. You can run your business as: an individual entrepreneur, a legal entity that is an entrepreneur or an organizational unit that is not a legal entity but is treated as an entrepreneur. Choosing a form of business is important. The best time to make a choice is when you already know what you want to offer your clients, how big you want your company to be, how many people you want to employ, etc. Depending on the choice you make, it can help or hinder your business. Read the article to the end and find out what forms of economic activity exist in Poland.
Sole proprietorship
Sole proprietorship is the most popular form of business in Poland. It is a very good idea if your business will be small with low business risk and based mainly on your money. Additionally, you don’t have to have initial capital when you set up your business. In this form you can hire employees and sign orders. However, you cannot incorporate other partners into your business.
Forms of Business Activity in Poland – Civil Partnership
If you want to run a business with a partner, a civil law partnership is a good and simplest solution. The advantages of this form of business include low cost of formation and the possibility of keeping simplified accounts. It is worth mentioning that a civil law partnership is not entitled to the status of an entrepreneur. Only the partners in a civil partnership are entrepreneurs with regard to the business they conduct.
Forms of Business Activity in Poland – Capital Companies
Capital companies include: limited liability company and joint-stock company. The essence of the functioning of these business entities is capital. It may take a monetary form, a tangible form (e.g. machinery, technological facilities, real estate) as well as an intangible form (e.g. copyrights, patents). The main purpose of capital is to protect the company’s creditors from insolvency. This solution is most often chosen by large companies employing at least 10 people.
Forms of business activity in Poland – Partnerships
Among partnerships we can distinguish: general partnership, partnership, limited partnership and limited joint-stock partnership. Their common features include the necessity of having at least one partner, personal liability of partners (does not have to be all of them) for the company’s liabilities. Additionally, companies are organizational units without legal personality.
What to pay attention to when choosing a form of business activity?
Each of the presented forms of business activity has its own characteristics that distinguish it from the other. Answering a few questions may help you in making a decision:
- How will you run the business – alone or with partners?
- How will you be responsible for the company’s liabilities?
- Who can represent the company in more than just official matters?
Additionally, familiarize yourself with taxation and types of accounting, perhaps this will help you make the right decision.