Polish law provides several forms of business operations, including sole proprietorships (JDG) and companies regulated by the Commercial Companies Code (KSH). This article walks you through the step-by-step process of starting a business, its costs, and the key differences between various business structures.

1. Choosing the Right Business Structure

Sole Proprietorship (JDG)

A JDG (Jednoosobowa Działalność Gospodarcza) is the simplest and most commonly chosen form of business in Poland. It is run by an individual under their own name, without a separate legal identity.

✅ Advantages of JDG:

• Simple registration with CEIDG (Central Register and Information on Business Activity).
• No required initial capital.
• Full control over finances and immediate access to profits.
• Various taxation options available.
• Possibility to suspend business operations if needed.

❌ Disadvantages of JDG:

• Full personal liability for business debts.
• Mandatory social security (ZUS) contributions, even in months with no income.
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Companies Under the Commercial Companies Code (KSH)

The KSH (Kodeks Spółek Handlowych) describes two main types of companies:

• Partnerships (e.g., general partnerships, limited partnerships, professional partnerships) – partners often bear personal liability for the company's obligations.
• Corporations (e.g., limited liability company (Sp. z o.o.), simple joint-stock company (PSA), joint-stock company (S.A.)) – these have legal personality, and shareholders are only liable up to their contributed capital.

The key differences between these types include shareholder liability, registration requirements, capital obligations, and formalities for document changes (e.g., notarized agreements).

2. How to Register a Business?

🔹 JDG (Sole Proprietorship):

1. Register with CEIDG – online, at the municipal office, or through online banking.
2. Choose a taxation method – progressive tax, flat tax, or lump sum tax.
3. Register with ZUS – social and health insurance registration within 7 days.
4. Set up a business bank account and obtain necessary permits (if required for your industry).

🔹 Sp. z o.o. (Limited Liability Company) – the most popular corporate form:

1. Draft the articles of association – via the S24 online system or a notary.
2. Register with KRS – obtain an entry in the National Court Register (KRS).
3. Obtain NIP (tax ID) and REGON (statistical number) – assigned automatically upon KRS registration.
4. Open a company bank account and obtain necessary permits (if required).
5. Register the company's beneficial owners in the CRBR (Central Register of Beneficial Owners).

3. Business Operating Costs

🔹 JDG Costs:

• ZUS contributions – mandatory, even with no income.
• Taxes – depend on the chosen taxation method.
• Accounting – simplified or full accounting, depending on revenue.

🔹 Company Costs:

• Share capital – for Sp. z o.o., a minimum of 5,000 PLN.
• Full accounting – higher costs compared to JDG.
• Registration fees – court fees for KRS registration range from 350 PLN to 600 PLN, plus notary fees if applicable.
• Additional costs – e.g., maintaining a shareholder register for PSA.

4. Virtual Office and Business Registration

A virtual office allows businesses to register under a professional address without renting a physical office space.

✅ Advantages of a virtual office:

• Reduces costs associated with office rent.
• Handles correspondence and administrative tasks.
• Allows business registration without using a personal home address.

Common use cases:

• Freelancers and startups.
• Remote-based businesses.
• Entrepreneurs who do not require a physical office.

5. Summary and Recommendations

✔ JDG – Ideal for small-scale businesses and beginners.
✔ Sp. z o.o. – Best for larger businesses and those looking to limit liability.
✔ PSA and S.A. – Suitable for startups and large enterprises.
✔ Partnerships (general, limited partnerships) – Great for businesses with multiple partners sharing responsibility.
✔ Virtual office – Perfect for companies not needing a physical location.

By understanding these structures, their costs, and requirements, you can choose the best option for your business in Poland. 

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