What are the differences between them? Establishing which form of business will be most beneficial for me?
Sole proprietorships (JDG) and limited liability companies (Sp. z o. o.) are the legal forms of business that are most popular among those deciding to start their own business in Poland.
Entrepreneurs, as well as people deciding to start their own business for the first time, are faced with the choice of which type of business to choose. From their point of view, the most relevant issue will be the potential benefits that will come with setting up one of them, as well as their degree of complexity. The choice depends on many factors such as the subject of the business, its scope or nature. Also important seems to be the difference in the liability of the founders of these two forms of business, in the settlements arising from the norms of tax law, or in the protection of the entrepreneur in case of possible problems.
Both legal forms have many advantages. Sole proprietorships are regarded as legal forms with minimal formalization, which is one of the reasons why so many people opt for them. Limited liability companies, on the other hand, have gained their popularity due to, among other things, the low value of the required share capital (PLN 5,000) and the limited liability of the partners for the company’s obligations. Thus, it is crucial to analyze the individual situation of each person facing the choice of which legal form to run a business.
Formalities needed to establish a JDG and Ltd.
A sole proprietorship, according to Article 3 of the Law on Entrepreneurs, is an organized profit-making activity, carried out on its own behalf and in a continuous manner. It is considered the simplest of the forms of business and is chosen most often by entrepreneurs. To establish it, any contract or statute is unnecessary. The basis for its activity is only an entry in the Central Register of Business Activity and Information (CEIDG). The entry can be made either “on paper”, at a city/municipality/district office, or online. Entry into CEIDG is free of charge.
Establishing a limited liability company requires much more commitment on the part of the partners than is necessary for a sole proprietorship. Among other things, it will require documents in the form of a memorandum of association, shareholders’ statements of contributions, and a list of shareholders. A limited liability company can be established in two ways: traditional (at a notary) and online (by submitting the appropriate form through the S24 portal). Then the appropriate application for registration in the National Court Register (KRS) must be submitted. The procedure is therefore more formalized, longer and more costly (both the KRS entry and the conclusion of the company’s contract before a notary are subject to a fee).
Legal personality in a JDG and a limited liability company.
A sole proprietor of a sole proprietorship, from the point of view of the law, retains the status of a natural person. Thus, the business activity and the person setting it up are in fact treated as a single entity. Accordingly, such a person naturally has legal capacity and the legal capacity to act, which stems from the very fact of being a natural person.
A limited liability company as a type of capital company has legal personality. It obtains it upon entry in the National Court Register. Thanks to this, as an entity with legal capacity (i.e. the ability to be the subject of rights and obligations) and legal capacity, it can freely shape its legal situation. By free formation of the legal situation is meant the ability to acquire rights and incur obligations.
Liability in a JDG and a limited liability company.
The effect of assuming that a sole proprietor and this particular business are treated as a single entity is that the entrepreneur is liable with all of his assets (both those created by the business and his personal assets) for the obligations of the business. This means that in the case of an unpaid debt, a creditor can seek satisfaction of his claim, for example, from private property owned by the entrepreneur.
The liability of partners in a limited liability company is shaped in a slightly different way than in the case of a JDG, which is already evident from the segment of its name “limited liability”. The company itself, as a legal entity, is liable for the company’s obligations. It is liable with all its assets, and the partners are not liable for the company’s obligations with their personal assets. In certain situations, however, it is possible for the members of the management board of a limited liability company to be liable with all their assets for the company’s obligations.
CEIDG and KRS
A sole proprietorship is subject to entry in the Central Register and Information on Business Activity (CEIDG). This is a system created to record all natural persons who are entrepreneurs within the meaning of the Entrepreneurs’ Law. Interestingly, it is also possible to operate an unregistered business, if the condition is met that the income generated in any month does not exceed 50% of the minimum salary in effect for the year.
Limited liability companies are subject to mandatory registration in the National Court Register (KRS). It is maintained by the business divisions of the district courts. After entry, each limited liability company obtains an individual KRS, NIP and REGON number, which serve to identify it. It is possible to check this data free of charge via the website www.ems.ms.gov.pl.
Amount and types of taxes
Because a JDG is treated as an individual, the entrepreneur running it is required to pay personal income tax (PIT).
As part of this, he can choose one of three ways to tax his business. These are, respectively, general taxation (tax scale), flat tax or lump sum tax on registered income. Depending on individual preferences, the choice of taxation is a decision of the entrepreneur, which can be changed in accordance with the rules set forth in the law.
A limited liability company is subject to so-called “double taxation,” i.e. taxation under the corporate income tax (CIT) rules, and then dividend tax – if it is paid to shareholders. In the case of CIT, the company’s income is taxed according to a tax scale of either 9% or 19% (depending on the size of the business). Eligibility for the indicated preferential rates depends, among other things, on the level of income of the taxpayer. The second tax is on any dividends, if they are paid to shareholders in a given year. The tax on dividends is 19%, regardless of whether the partner is an individual or a legal entity.
Statystycznie rzecz biorąc – w Polsce spółka z ograniczoną odpowiedzialnością jest najczęściej zakładanym rodzajem spółki handlowej. Przepisy polskiego Kodeksu spółek handlowych dopuszczają założenie takiego podmiotu przez pojedynczą osobę fizyczną, jako jedynego wspólnika. Założenie takiej jednostki wydaje się być opłacalnym rozwiązaniem. Czy aby jest tak na pewno?
1 stycznia 2022 r. w życie weszły przepisy wprowadzające tzw. Nowy Ład. Zwiększają one wysokość składki zdrowotnej oraz uniemożliwiają odliczenie jej od podatku. W związku z tymi zmianami prowadzenie biznesu w formie jednoosobowej działalności gospodarczej może się dla niektórych okazać nieopłacalne. Jedną z możliwości zmiany formy jest przekształcenie jednoosobowej działalności w spółkę z ograniczoną odpowiedzialnością. Z czym się to wiąże i jak to zrobić?
Spółka z ograniczoną odpowiedzialnością jest jedną z najpopularniejszych form działalności gospodarczej w Polsce. Wspólnicy, zarząd, kapitał zakładowy – to pojęcia, które przewijają się w tym temacie nieustannie. Czym więc jest kapitał zakładowy oraz ile powinien wynosić? Gdzie zarejestrować spółkę z ograniczoną odpowiedzialnością? Czym różni się zarząd od wspólnika?
