Simple Joint Stock Company vs. Limited Liability Company

Simple Joint Stock Company vs. Limited Liability Company Due to the recently introduced form of business that is the Simple Joint Stock Company, a large number of entrepreneurs will have to face a difficult choice – whether to stay with the current way of operating in the form of a limited liability company, or to transfer their business to the new opportunities combined with the Simple Joint Stock Company. Both forms have their advantages as well as their similarities. However, which one seems to be the right choice? Simple Joint Stock Company vs. Limited Liability Company – formation of the company Both forms of business must be concluded in the form of a notarial deed, just as in both cases you can use the registration via an ICT system – S24, as long as it involves only a cash contribution. Both companies also have, to a certain extent, the influence on the modification of the deed of incorporation, as well as the relationship between the partners, if there is such a possibility in the special provisions (they usually give entrepreneurs a lot of room for manoeuvre). An important difference is the amount of the minimum capital. In a Simple Joint Stock Company it is 1 PLN, and in a limited liability company it is PLN 5,000.

Simple joint-stock company vs. limited liability company – conducting business activity When it comes to conducting the business itself, a limited liability company is owned by its shareholders and a simple joint-stock company is owned by its shareholders. Naturally, there can be more than one shareholder or partner, but in the case of sole proprietorships, the formal requirements are increased, imposing stricter documentation of activities between the shareholder and the company. Another similarity is that in both cases the partners (shareholders) are not liable for the company’s obligations (In specific, defined situations, however, members of the management board may be liable). A simple joint-stock company, however, has a different composition of company bodies than a limited liability company. In a limited liability company there is only the management board, whereas in a Simple Stock Company, apart from the management board, there is also the Board of Directors or the Supervisory Board. Resolutions in both companies operate on a similar basis, as does the convening of meetings, but the regulations provide for an electronic form of voting for the Simple Joint Stock Company.

Simple Joint Stock Company vs. Limited Liability Company – asset structure The issue that has more differences than in the case of the formation or operation of a business is certainly the asset structure. A possibility that is quite new so far is the possibility to make a contribution in kind – an activity impossible in the case of a limited liability company. Another key fact is that in a Simple Joint Stock Company the shares have no de facto nominal value. This means that it is impossible to increase their value. However, new shares can be issued. Profit is distributed proportionally, on very similar principles. Upon fulfilment of a number of conditions, it is also possible to make advance payments to shareholders during the financial year.