Download Limited partnership

Commercial Law
STUDENT: ȘĂULEAN RUXANDRA ANDREEA
Companies
- concept A company is an association or collection of individuals,
whether natural persons, legal persons, or a mixture of both. Company members
share a common purpose and unite in order to focus their various talents and
organize their collectively available skills or resources to achieve specific,
declared goals. Companies take various forms such as:
 Voluntary associations which may include nonprofit organization
 A group of soldiers
 Business entities with an aim of gaining a profit
 Financial entities and banks.
A company or association of persons can be created at law as legal person
so that the company in itself can accept Limited liability for civil responsibility
and taxation incurred as members perform (or fail) to discharge their duty within
the publicly declared "birth certificate" or published policy.
Companies
- concept -
Because companies are legal persons, they also may associate and
register themselves as companies – often known as a corporate group.
When the company closes it may need a "death certificate" to avoid
further legal obligations.
A company can be defined as an "artificial person", invisible,
intangible, created by or under law, with a discrete legal entity, perpetual
succession and a common seal. It is not affected by the death, insanity
or insolvency of an individual member.³
³http://en.wikipedia.org/wiki/Company
Polish companies
The Polish legislation provides and regulates several kinds of
commercial companies, such as:
 registered partnership
 professional partnership
 limited partnership
 limited joint-stock partnership
 limited liability company
 joint stock company
Polish companies
- civil law partnership Characteristics of civil law partnership are very similar to those of
the English partnership. Partners execute a contract, in which they undertake to
attempt to achieve a common economic objective by acting in a manner indicated
in the contract, inter alia by making contributions. As a contribution is considered
contributing property or other rights into the partnership as well as providing
services to it.
Each of the partners is entitled and obligated to manage the
partnership’s business. Each of them is also entitled to execute contracts in the
name and on behalf of the partnership, unless otherwise provided for in the
partnership contract or in a partners’ resolution.
Another important feature of civil law partnership is that all partners are
jointly and severally liable for the partnership’s obligations. Their liability is
unlimited.
It is the only partnership that is regulated by the Civil Code, all the other
partnerships are provided for by the Code of Commercial Companies.
Registered partnership
Polish companies
- registered partnership The definition of registered partnership contained in the Code of
Commercial companies is rather vague. Therefore, it is best to define it by its
features:
- although the Code stipulates that it is not a legal person, it provides
that registered partnership may execute contracts and take part in litigations.
Therefore, it is very similar to a legal person;
- each partner is liable for the partnership’s obligations without any limitation –
jointly and severally with the other partners and the partnership;
- the partnership commences to exist at the moment of its entry into the
Companies’ Register;
Polish companies
- registered partnership -
- each partner is entitled to represent the partnership (i.a. execute contracts on its
behalf), unless the partnership contract provides otherwise or court revokes his
right to represent the company due to ‘important reasons’.
- the partnership contract may provide that each of the partners is entitled to
transfer his rights and obligations arising from the partnership contract to a third
party. In such a case he must obtain a consent of all the other partners, unless
otherwise provided for in the partnership contract.⁴
⁴ http://polishcompanylaw.pl/
Polish companies
- registered partnership Procedures of registered partnership formation
In order to form a registered partnership one should sign a partnership
agreement, which must be in written form. The agreement does not have to be
drafted in the form of a notarial deed. After an agreement is concluded, the
partnership should be registered in the National Court Register (KRS).
A KRS application should be filed with the regional court having
jurisdiction for the registered seat of the entity which the entry concerns.
An application for entry of the registered partnership in the register must
be filed on an official form KRS-W1, which must be properly and legibly filled in,
pursuant to the partnership agreement. Other forms shall also be attached to the
application:
KRS-WB specifying personal details of the partners,
 KRS-WM classifying the activities of the partnership and
 KRS-WK indicating partners entitled to represent the partnership.

Polish companies
- registered partnership -
Along with the above-mentioned forms one should present to the court a
copy of the registered partnership agreement (original), first and last names of the
partners, business name of the partnership and addresses of the partners or their
service addresses as well as officially certified (by a notary) specimen signatures of
persons entitled to represent the partnership.
The court fee for entry into the register amounts to PLN 500.
Formation of the partnership does not require any minimum initial
capital specified by law.
Polish companies
- registered partnership Obligations of the entrepreneurs
Each partner shall be liable for the obligations of the partnership without
limitations with his entire assets jointly and severally with other partners and with
the partnership (subsidiarily). This means that in the case of a debt, the creditor
may institute legal action at his choice:
 against all debtors jointly
 against some of them
 against each of them
Satisfaction of a creditor by at least one of the co-debtors exempts the
others. The debtor who has met the obligation may demand from the other
debtors to reimburse the part of the obligation owed by them. ⁵
⁵http://www.migrant.info.pl/registered-partnership.html
Professional partnership
Polish companies
- professional partnership It is very similar to registered partnership – majority of
provisions concerning registered partnership apply also
to professional partnership.
There are three important differences:
a) only certain professionals may become partners of such a partnership
(e.g. medicine doctors, architects, advocates etc.);
b) other partners are not liable for mistakes of a partner while providing
his professional services;
c) professional partnership may be managed by a management board (if
the partnership contract so provides).⁶
⁶ http://polishcompanylaw.pl/
Polish companies
- professional partnership Formation of a Professional Partnership in Poland
Under Polish Law professional partnership is a form of partnership,
which is available only to following self-employed professionals: advocate,
pharmacist, architect, construction engineer, statutory auditor, insurance broker,
tax advisor, stock-broker, investment advisor, accountant, doctor, dentist, vet,
notary, nurse, midwife, attorney-at-law, patent attorney, expert in real estate and
sworn translator.
Professional partnership doesn't have a legal personality, but it does have
a legal capacity instead. In fact it may acquire rights in its own name as well as sue
or be sued.
To establish a personal partnership a deed of partnership is required in
writing and later registration in National Court Register. The establishment costs
are quite low, because the notary form is not required for professional
partnership.
Polish companies
- professional partnership Partner in professional partnership is not liable for debts and obligations
arose in relation to other partners undertaking their professional activity, as well
as for actions or omissions of employees who worked under supervision of
another partner at the time of providing a service related to the company's
business. Each partner is fully liable for all other debts and obligations. In
addition in deed of partnership partners may broaden the scope of their
responsibility, to the level of Professional partnership.
Professional partnership may be represented by partners, an appointed
proxy or Management Board.
To establish a professional partnership at least two individuals entitled to
pursue their profession.⁷
⁷http://www.companyformation.info.pl/professional.html
Limited partnership
Polish companies
- limited partnership A limited partnership in Poland is a type of business
characterized by the fact that it may, in its own name, acquire rights and incur
obligations.
The limited partnership is a commercial partnership, which
combines many of the features of typical partnership and certain features of a
commercial company. The limited partnership in Poland may be formed by at
least two individuals, one as a limited partner and the other one as a general
partner .
According to the new law provisions, a limited partnership aims to
keep the company under its own name in front of the company's creditors and
other legal or financial obligations. In this sense, at least one partner is liable
without limitation (the general partner), having unlimited responsibility in
relation with the company, and at least one partner with limited liability.⁸
⁸ http://www.lawyerspoland.eu/limited-partnership-in-poland
Polish companies
- limited partnership The legal requirements of a limited partnership in Poland
The name of a limited partnership in Poland must contain the name of
one or more general partners and the additional designation "limited
partnership". It is also acceptable to use the abbreviation "LLP".
The articles of association for a limited partnership in Poland shall
include the name and registered office of the company, the objects of activity, the
duration of the company (if it is marked), the determination of the contributions
by each partner and the value, the indicated amount of the responsibility of each
limited partner to creditors.
The limited partnership agreement should be concluded in the form of a
notarial deed.
Polish companies
- limited partnership The incorporation procedure of a limited partnership in Poland
The limited partnership is formed at the moment of registration. The
application file for registering a limited partnership to the register court should
include:
- a standard applicaation form,
- the company's name, registered office and address of the company;
- the objects of the company ,
- the names or company (s) of general partners and, separately, the names or
company which represent the limited partners, as well as the circumstances that
limit the ability of a shareholder to act, if any,
- the names of persons authorized to represent the company and the manner of
representation, where the general partners have entrusted other persons to
represent the company,
- the sum of the partnership,
- the proof of payment for the registration taxes and fees.
Limited joint-stock partnership
Polish companies
- limited joint-stock partnership A limited joint - stock partnership is a partnership where at least
one partner is liable for the obligations of the partnership without limitation (the
general partner) and at least one partner is a shareholder. The statutes of a limited
joint-stock partnership must be made in the form of a notary deed. The limited
joint-stock partnership is created upon its registration in the register of
entrepreneurs held in the National Court Register.
Capital requirements of limited joint-stock partnership
The initial share capital of the limited joint-stock partnership must be at
least 50 000 PLN. The share capital of a joint-stock company divides into shares
of equal nominal value. The nominal value of a share may not be lower than 1
grosz. There are no requirements as to the minimum level of contributions of
general partners.
A general partner may make a contribution to the share capital or to
other funds, however making of the contribution to the share capital does not
exclude his unlimited liability for the obligations of the partnership.
Polish companies
- limited joint-stock partnership The contributions may be made in cash or in kind. The provision of
services or work for the partnership may represent an in-kind contribution of a
general partner, unless a contribution is made to the share capital. The capital
share of the general partner equals the value of the contribution effectively made.
The general partner has neither the right nor the obligation to increase the agreed
contribution.
Management of limited joint-stock partnership
Management of the affairs of the limited joint-stock partnership may not
be entrusted to third parties to the exclusion of the partners. Each general partner
has the right and obligation to manage the affairs of the partnership, however, the
statutes may provide that management of the affairs of the partnership is
entrusted to one or several general partners. General partners do not have the
right to manage the affairs of the partnership with regard to matters which are
reserved for the competence of the general assembly or the supervisory board. The
partners may not receive remuneration for managing the affairs of the
partnership.
Polish companies
- limited joint-stock partnership Representation of limited joint-stock partnership
The limited joint-stock partnership is represented by general partners,
who are not deprived of the right to represent the partnership under the statutes.
A shareholder may represent the partnership only as an attorney in fact. A
shareholder who effects an act in law in the name of the partnership without
disclosing his power of attorney or outside of his powers is liable without
limitation for the consequences of such act in law as against third parties.
Supervisory board
The supervisory board consists of at least three members who are
appointed and dismissed by the general meeting. The supervisory board must be
established where there are more than twenty-five shareholders. Upon an
application of the shareholders, representing at least one fifth of the share capital,
the election of the supervisory board must be made by the next general meeting by
way of a vote in separate groups. The term of office of a member of the
supervisory board may not be longer than five years.
Polish companies
- limited joint-stock partnership -
The supervisory board exercises permanent supervision over all areas of
the activities of the company. The special duties of the supervisory board include
evaluating of the general partners report on the operations of the company and of
the financial report for the previous financial year with regard to their conformity
with the books and documents, as well as with the actual state of affairs, and
proposals of the management board concerning the division of profits or the
financing of losses, as well as submitting to the general assembly annual written
reports on the results of such evaluation.
The statutes may expand the powers of the supervisory board.
Polish companies
- limited joint-stock partnership Transfer of the rights and obligations of a general partner in limited
joint stock partnership
The rights and obligations of a general partner in a limited joint stock
partnership may be transferred to another person only where the articles of
association so provide, as a rule, only upon the written consent of all of the
remaining general partners. In the case where all rights and obligations of a
general partner are transferred to another person, the withdrawing partner and
the acceding partner are jointly and severally liable for the obligations of the
withdrawing partner arising in connection with his membership of the
partnership and for the obligations of the partnership.
Transfer of shares
The shares are transferable. The statutes may provide that the consent of
the company is necessary for the transfer or encumbrance of registered shares or
limit the transferability of registered shares in another manner. The transferee
and the transferor are jointly and severally liable to the company for the
outstanding performances due to the company in respect of the share transferred.
Polish companies
- limited joint-stock partnership Share in profits and participation in losses of limited joint stock
partnership
As a rule, a general partner and a shareholder participate in the profits of
the partnership in proportion to their contributions made to the partnership,
unless the statutes provide otherwise.
As a rule, general partners participate in the losses in shares in which
they participate in the profits. The statutes may release a general partner from
participation in losses. If, as a result of a loss sustained by the partnership, the
capital share of the general partner has diminished, the profits need to be first of
all used to supplement the share of the partner.
A shareholder participates in the losses only up to the value of his
subscription for shares.
Each general partner has a right to personally inquire about the state of
the assets and business of the partnership and personally review the books and
documents of the partnership.
Polish companies
- limited joint-stock partnership Each shareholder has a right to receive not later than fifteen days before
the ordinary general meeting of shareholders the copies of the general partners’
report on the operations of the company and of the financial report, together with
a copy of the supervisory board report and the opinion of the auditor.
Liability for the obligations of limited joint-stock partnership
Each general partner is liable for the obligations of the joint-stock
partnership without limitation with all his assets jointly and severally with the
remaining general partners. However, his liability is subsidiary to the liability of
the partnership, i.e. a creditor of the partnership may conduct execution from the
general partner’s assets only where execution from the assets of the partnership
has proved ineffective.
The shareholders are not liable for the obligations of the partnership.
Liquidation of limited joint-stock partnership
The liquidation of a limited joint-stock partnership is conducted in the
event of its dissolution, unless the partners agree on another mode of bringing the
operations of the partnership to an end.⁹
⁹http://www.polzlaw.pl/publications_forms-limited-joints.html
Limited liability company
Polish companies
- limited liability company Limited liability company, abbreviated sp. z o.o., is the legal title of
a private limited company in Poland.
Formation
The necessary steps for establishing a “sp. z o.o.” (spółka z ograniczoną
odpowiedzialnością) are determined by Article 163 KSH (Kodeks spółek
handlowych). It first requires the notarization of the articles of incorporation. It
must take place in Poland. The conclusion of the articles of incorporation creates a
legal capacity subject, the company prior registration.
The second step requires the full payment of the share capital as codified
by the articles of incorporation. Where required the payment includes the agreed
surplus over the nominal value of the company share.
Polish companies
- limited liability company The third step is the appointment of the board and possibly other organs
of the “sp. z o.o.”. The Board of Directors or the first board members can already
be appointed at formation. Once all deposits are paid in full, the board may
register for entry into the business register. The application is inter alia
accompanied by a statement of all board members that the deposits were placed
to cover the common stock in full by all shareholders in the company. The
registration of the company in the business register takes about two to four weeks.
By registering the company in the business register, the company becomes a legal
entity. After registration in the business register, the Board of Directors has to
request the so-called REGON number at the statistics agency. This is issued within
one to two days. Subsequently the Board of Directors has to register the company
at the company's financial authorities and obtain the so-called “NIP”-Number
(Taxpayer Identification Number) and the VAT number.
The granting of the NIP requires the submission of a lease or other proof
that the company has any accommodation, also a bank account contract is
required. For these reasons it is recommended that already with formation the
Board of Directors is appointed. In this way, in the start-up phase before
registration in the business register the company is already able to open a bank
account and sign a lease agreement.
Polish companies
- limited liability company Capital
The share capital amounts to at least 5,000 zloty. The shares can either
be of equal or unequal height, depending on the articles of incorporation. If a
shareholder can have more than one share, the shares must be equal and
indivisible. The minimum nominal value of a share amounts to 50 zloty.
The Board of Directors
The board consists of one or more individuals. To the board may be
appointed both shareholders and third parties. Board members may be foreigners
or persons resident abroad. The members of the Board are appointed and
dismissed by resolution of the shareholders, unless the articles of incorporation
provides otherwise, such as the appointment by the Supervisory Board.
Board members are generally appointed for one year. An excess of this
one year term of office may also be agreed. The term of office generally terminates
with the date of holding of the shareholders’ meeting, which approved the
financial statements for the last full financial year of the exercise of Executive
Function. Board members are also free to withdraw from its role as manager.
Polish companies
- limited liability company -
Other bodies at a glance
The Supervisory Board performs the constant, the Auditing
Committee the periodic supervision over the affairs of the Company. The
appointment of a Supervisory Board or Audit Commission at a “sp. z oo”, in which
the capital stock amounts more than 500,000 zloty and also more than 25 existing
shareholders, is mandatory. Otherwise the shareholders are responsible for an
agreement in the articles of incorporation on the appointment of a supervisory
board or audit commission. Both organs consist of at least three members who are
appointed or dismissed by shareholders' resolution. The duties and
responsibilities of those supervisory organs include the annual audit and the
examination of the annual report of the Board of Directors.
Polish companies
- limited liability company Rights and obligations of shareholders
The main duties of the shareholders include the provision of full deposit,
the compensation of excessive determined contributions in kind and the
reimbursement of unjustified payments (Art. 175, 198 KSH). Under the special
relation of the articles of incorporation may accrue the following duties:
acquisition of administrative or supervisory duties, the obligation to
recurring contributions in kind (Art. 176 KSH) or to pay further margins (Article
177 KSH).
Toward the property rights primarily belongs the right to
receive dividends (Art. 192 KSH), the subscription rights (Article 258 KSH), the
participation of the net profits (Art. 191 ff KSH) and the settlement proceeds
(Article 286 KSH), a claim for contributions in kind (Art. 176 KSH) and the
repayment of the deposit for capital reduction and cancellation of the share and
the right for repayment of unused further margins (Article 179 KSH).
Polish companies
- limited liability company The administrative rights include especially the participation
of corporate resolutions (Art. 227 ff KSH), the appeal of such resolutions (Article
250 KSH), minority protection, the action for dissolution of the Company and to
the expulsion of shareholders (Article 271 No. 1, 266 § 1 KSH) and the individual
right to obtain information and control of each shareholder (Art. 212 KSH, which
can only be restricted or excluded if the appointment of a supervisory body is
provided, Article 213 § 3 KSH).
Deviation from the equality in principle envisaged in terms of rights and
duties of all shareholders may be prerogatives recognized under the special
relation of the articles of incorporation. In particular, those prerogatives may
affect the right to vote (more than three votes per share) and the right to dividend
(maximum of 150% of the dividend to be paid to a non-privileged share).¹⁰
¹⁰ http://en.wikipedia.org/wiki/Limited_liability_company_(Poland)
Joint stock company
Polish companies
- joint stock company Under Polish Law, joint-stock company is a capital company and is
fully available to foreigners. As a corporation it has a legal personality, it can be
established by one or more individual or a legal persons, with a stipulation that a
sole shareholder limited liability company may not establish a joint stock
company. There are several forms of business activity for which the joint stock
company is a formal requirement to conduct such an activity or obtain a proper an
authorization.
In order to establish joint stock company signing the deed of
establishment of the company and a statute as a notarial deed is required. The
minimum share capital for establishing a joint stock company is 100,000 PLN.
Later after the contributions to share capital are made and Management Board
and Supervisory Board are established the company needs to be entered into the
National Court Register. Nominal value of share may not be lower than 1 grosz
(01/00 of 1 PLN). The shareholders are not liable for company's debts and
obligations.
Polish companies
- joint stock company Joint stock company is advised for persons or entities, who plan to
conduct a large scale business activity and plan or do not exclude the possibility of
issuing shares as a way of obtaining capital.
Due to the presence of shares, the company formation process is very
formal and for the draft of Statute legal advise is recommended.
The bodies of the company consist of the General Assembly,
Management Board and Supervisory Board.
Joint stock company is rather expensive in operation due to lots of
formalities like frequent requirement of notarial deed form. However it offers, a
lot of possibilities with regards to obtaining capital and further company
development (for instance stock exchange debut). In addition the minimum share
capital requirement for establishing a joint stock company was reduced from
500,000 PLN to 100,000 PLN which considerably reduced the overall cost of
establishing.¹¹
¹¹http://www.companyformation.info.pl/joint-stock.html