Limited joint-stock partnership - basic information
Features of a limited joint-stock partnership, who is responsible for the partnership's obligations, what are the accounting and tax matters?
This type of partnership combines the involvement of an active partner (general partner) with the provision of capital by shareholders. The limited joint-stock partnership is intended, for example, for large family enterprises, which intend to raise capital for further business activity and at the same time avoid a hostile takeover.
Features of limited joint-stock partnership
A limited joint-stock partnership is a partnership whose purpose is to run an enterprise under its own name. It is a personal commercial partnership. It does not have legal personality, but has legal capacity (may acquire rights and incur obligations on its own behalf) and judicial capacity. A general partner and a shareholder may be one or more entities from among: natural persons, legal persons, organizational units without legal personality, to which the regulations grant legal capacity.
The minimum capital is PLN 50,000.
Liability of shareholders
In a limited joint-stock partnership, at least one partner (general partner) bears unlimited liability for the partnership's obligations (i.e. all his assets), and the partner is not responsible for the partnership's obligations. The only possible risk for the shareholder is the possible loss of value of the shares held. As a general rule, the liability of shareholders relates only to the partnership's obligations (i.e. the liability of shareholders is not related to their personal debts).
Representation
The partnership shall be represented by its general partners, unless they are unrepresented in the statutes. Shareholders may represent the company only as proxies.
Supervision
The shareholder does not have the right of individual supervision over the company. When the number of shareholders exceeds 25, it is necessary to establish a supervisory board (every 3 members, 5 in a public S.K.A.). The Supervisory Board shall not be entitled to issue binding instructions to general partners on company matters. The term of office of the Board shall be 5 years.
General meetings of shareholders are held in the place where the company has its registered office (if the articles of association allow, in another place). Minutes of general meetings are drawn up in the form of a notarial deed.
Name
The company name of a limited joint-stock partnership should contain the names of one or more general partners and an additional designation "limited joint-stock partnership". If the general partner is a legal person, the company name of the limited joint-stock partnership should contain the full text of the company (names) of the legal person with an additional designation S.K.A. However, this does not preclude the name of the general partner, who is a natural person, from being indicated. If the name or surname of a shareholder appears in the company's name, the shareholder shall be liable towards third parties in the same way as a general partner.
Articles of Association of the limited joint-stock partnership
The articles of association are the. It should take the form of a notarial deed.
The articles of association should at least contain the following
- company name and registered office
- the objects of the partnership
- the duration of the partnership, if specified
- an indication of the contributions to be paid by each general partner and their value
- amount of share capital, method of its collection, nominal value of shares their number with indication whether shares are registered or bearer
- the number of shares of different classes and the rights attaching thereto if different classes of shares are to be introduced
- the surnames and names or names or the business names of the general partners and their registered offices, addresses or addresses for service
- the organisation of the general meeting and of the supervisory board where the law or the articles of association provide for the establishment of a supervisory board.
An amendment to the articles of association requires the consent of all the general partners and a resolution of the general meeting adopted by a majority of ¾ of votes. All these activities should be performed in the form of a notarial deed.
Registration of a limited joint-stock partnership
The steps necessary to set up a partnership are as follows:
- the adoption of the articles of association in the form of a notarial deed
- acquisition of all shares by shareholders
- making cash contributions by the shareholders
- appointment of a supervisory board.
Limited joint-stock partnerships are registered in the National Court Register.
NIP and REGON
NIP and REGON numbers are assigned "automatically" when the partnership is registered in the National Court Register.
Profit distribution
The general partner and the shareholder participate in the profit of the partnership in proportion to their contributions to the partnership. If the contribution of the general partner is his work of representing the company and managing its affairs for which he receives remuneration from the partnership, he shall not be entitled to a share in the profit of the partnership in the part corresponding to the contribution of this work.
Distribution of shares
They may be registered shares or bearer shares. A partnership should maintain a share register - obligatorily kept by general partners having the right to manage the partnership's affairs. It includes entries for registered shares and for provisional certificates. Preference shares may be established. A general partner, who is liable for the partnership's obligations with all his assets, is entitled to deduct from the accrued tax on the payment from profit the amount of the tax paid by the limited joint-stock partnership on its profts, in the part the tax paid by the partnership has reduced economically the profit received by the general partner. It means that the general partner should calculate his/her share in the partnership's profit (according to the articles of partnership), and then calculate the income tax on the base of this share. Next, the income tax so calculated should be reduced by the amount equal to the product of the percentage share and the amount of the tax paid by the limited joint-stock partnership. As a consequence, the actual taxation of general partner's income will oscillate around 19 %. A general partner has the right to reduce the tax when the profit earned by the partnership in a given tax year is paid out to him within five consecutive tax years, counting from the end of the year following the year in which the partnership achieved it.
VAT
The partnership is a VAT payer.
Accountancy
The partnership is obliged to keep full accounting records.
Obligations towards ZUS
When a partnership is registered, it will automatically be registered with the Social Insurance Institution as a payer. It is not necessary to additionally register partnerships with the Social Insurance Institution (ZUS). In the case of limited joint-stock partnerships there is no obligation to register their shareholders in the Social Insurance Institution (ZUS).