Establishment of a general partnership

General Partnership is a partnership which may acquire rights in its own name, including ownership of real estate and other rights in rem, incur liabilities, sue and be sued. Its characteristic feature is the personal liability of each debtor for the company's obligations. Each partner is liable for the company's obligations with all his or her assets without limitation, jointly and severally with the other partners and the company.

The law stipulates that this liability is subsidiary, meaning that it takes on a complementary character. Accordingly, a creditor may only pursue enforcement against assets belonging to the partner if enforcement against the company's assets proves ineffective

The basis of a general partnership is the articles of association, which should be in writing under pain of nullity. It should specify at least five elements.

Contrary to the colloquial understanding, the word "company" in legal language does not mean the business conducted and the rights associated with it. Instead, the firm is the name of the business. According to the requirements of the Commercial Companies Code, the name of a general partnership should contain the surnames or business names (names) of all the partners, one or more of them, and the additional designation "general partnership". It is permissible to use the abbreviation 'sp. j.' in trade.

The registered office of the general partnership shall be inwhere its governing body has its seat. This will therefore be the place where the company's management and representation activities are carried out. If the partners reside in different localities, there is no obstacle to the registered office being the locality in which the principal place of business of the company is situated or the place where most of the persons conducting the company's affairs and representing it reside. The registered office of a company should be distinguished from its address, that is, its postal designations including street name, building and premises number.

According to the Code of Commercial Partnerships and Companies, a shareholder's contribution may be either in cash or by transferring or encumbering things or rights, or even by providing labour or services to the company. Non-monetary contributions made to a general partnership may include:

The value of each type of contribution should be determined by means of, inter alia, an expert valuation, values set out in documents (contracts, invoices) or the knowledge of the shareholders. The correct determination of the contributions made to the company and their value is important, inter alia, from a tax point of view, as the value of the contributions constitutes the basis for taxation with the tax on civil law transactions.

In addition, the commitment to contribute to general partnership is the basis for a claim for a contribution to the company by the shareholder who has undertaken to make the contribution.

The objects of the business should define the scope of the activities permitted to be undertaken by the company. It must be agreed with the shareholders and correspond to its objectives.

It should be specified according to the Polish Classification of Business Activities (PKD), with the proviso that the verbal description of the subject of activity indicated in the articles of association does not have to coincide with the description of the subject of activity included in the PKD.

It is possible to establish a partnership without indicating its time frame. However, if the partners decide on a temporary duration, then this should be indicated in the articles of association by a specific date, period or the performance of specific tasks.

The above-mentioned elements constitute the absolute minimum content of the articles of association. Other elements may also be included, including the manner of amending the agreement or transferring all the rights and obligations of a shareholder to another person. The Code of Commercial Partnerships and Companies contains standard solutions concerning these issues, allowing, however, for their modification.

General Partnership is established upon the conclusion of the articles of association, but comes into existence only upon entry in the Register of Entrepreneurs of the National Court Register. It is then that a general partnership (like other commercial law companies) becomes a legal entity. The legal subjectivity of a company does not, however, mean that it has a legal personality, but that it is endowed with such attributes as: legal capacity, legal action capacity or judicial capacity.

Such services include: consultations explaining how this type of company operates in the legal world, the rules of liability for its debts or tax issues.

Help lawyers is indispensable in the process of setting up this type of business, facilitating and speeding up the whole procedure and ensuring that there are no blatant oversights that could damage the interests of shareholders at the outset.