Corporate Liability in Polish Companies
Which Business Structure is Most Advantageous? Understanding Liability in Polish Companies
When deciding on the most profitable business activity and structure in Poland, understanding your liability for the company’s obligations is crucial. The choice between capital companies and partnerships significantly impacts the protection of your personal assets.
Capital Companies
In capital companies, such as a Spółka z Ograniczoną Odpowiedzialnością (Sp. z o.o.), Spółka Akcyjna (S.A.), or Prosta Spółka Akcyjna (P.S.A.), partners are not liable for the company’s liabilities with their personal assets. Their financial risk is limited to the amount of capital they contributed, providing better protection of personal assets if the company faces financial difficulties. Creditors cannot pursue claims against the private assets of the partners.
However, this protection is not absolute. The company’s management board—and often the shareholders who perform functions on the management board—may be held liable for the company’s obligations if they neglect duties related to managing the company’s affairs or fail to file for bankruptcy on time.
Partnerships
In partnerships, such as a Spółka Jawna, Spółka Partnerska or Spółka Komandytowa, partners are liable with all their assets. If the company becomes insolvent, creditors can pursue claims from both the company’s assets and the private assets of the partners, resulting in significantly higher financial liabilities.
Key Considerations
Capital companies offer better protection of personal assets but involve greater formalization in management, fund disposal, and potential liability of board members for negligence. Partnerships are simpler to organize but carry higher financial risks for participants.
Before choosing your business’s legal form, consult an accounting office. Experienced professionals can help you analyze accounting documentation and assess the financial situation of partners, guiding you towards wise and informed financial decisions.
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