LLC Limited Partnership Formation and Registration in Poland
The LLC Limited Partnership: A Structure for Sleeping Soundly
When a Polish entrepreneur first encounters the phrase “spółka z ograniczoną odpowiedzialnością spółka komandytowa,” the reaction is often bewilderment. The name sounds like a typographical error, or perhaps the result of careless copy-pasting. In fact, behind this seemingly redundant designation lies one of the most sophisticated business structures in Polish commerce—an arrangement that solves a problem entrepreneurs have grappled with for centuries: how to run a business without risking everything you own.
Anatomy of a Hybrid
Let us begin by dispelling a fundamental misconception. The sp. z o.o. sp.k. is not a distinct type of company. Polish commercial law recognizes four types of partnerships and two types of corporations—nothing more. What we colloquially call the “LLC limited partnership” is simply an ordinary limited partnership in which the general partner happens to be a limited liability company.
Why does the name suggest a separate legal form? Blame the rules governing business names. A limited partnership must include the full name of its general partner. When that general partner is “ABC spółka z ograniczoną odpowiedzialnością” (ABC Limited Liability Company), the entire limited partnership bears the name “ABC spółka z ograniczoną odpowiedzialnością spółka komandytowa.” Hence the linguistic construction that confounds newcomers while serving as a recognition signal for practitioners: here is a business structure assembled with care.
Two Partners, Two Worlds
Every limited partnership requires at least one general partner and one limited partner. Their roles differ so fundamentally that speaking of “partners” in the traditional sense of equality seems almost misleading.
The general partner manages the partnership’s affairs and represents it to the outside world. She signs contracts, negotiates with counterparties, makes operational decisions. For this privilege of control, she pays the highest price—unlimited personal liability for the partnership’s obligations, with no ceiling whatsoever.
The limited partner occupies a passive position. He does not manage, does not represent, does not involve himself in daily operations. In exchange, his liability is confined to the komandytowa sum specified in the partnership agreement—and if he has contributed capital equal to or exceeding that sum, he bears no liability at all.
And here we arrive at the essence of the sp. z o.o. sp.k.
The Mechanism That Changes Everything
What happens when the general partner is not a flesh-and-blood human being, but a limited liability company?
The limited partnership incurs an obligation. If it cannot pay, the creditor reaches for the general partner—which is the LLC. The LLC, in turn, is liable with all its assets. But if that LLC exists solely to serve as general partner and conducts no other business, its assets may amount to nothing more than the minimum share capital required by law: five thousand złoty, roughly twelve hundred dollars.
The same natural persons who own the LLC simultaneously appear as limited partners of the limited partnership. Their liability? Capped at the komandytowa sum—which may be set at a symbolic single złoty.
The net effect: no natural person anywhere in the structure bears unlimited personal liability. The business operates, contracts are signed, operational risk exists—but the house, the car, and the savings of the owners remain untouched.
Who Actually Runs Things?
If the general partner is an LLC rather than a human being, who makes the decisions in practice?
An LLC acts through its management board. When an LLC serves as general partner, it is the board of that LLC that effectively manages and represents the entire limited partnership. Board members become the people actually responsible for operations—though formally they act as an organ of a legal entity, not as direct participants in the limited partnership.
This arrangement carries an additional advantage: replacing the people who run the business requires only changing the LLC’s board, not restructuring the partnership’s roster of partners. A flexibility no simpler form can offer.
A limited partner formally cannot represent the partnership—but nothing prevents granting him a power of attorney or appointing him as a commercial proxy (prokurent). In practice, the same natural person often serves simultaneously as limited partner, LLC shareholder, and LLC board member. Complete control with minimal risk.
Liability: Protection in Layers
The liability architecture deserves examination, layer by layer.
Layer one: The limited partnership is liable for its obligations with all its assets.
Layer two: When the partnership’s assets prove insufficient, the creditor may reach the general partner. In our case, that means the LLC—which is also liable with all its assets. But if the LLC exists solely as a general partner and conducts no other activity, those assets may be limited to the statutory minimum: five thousand złoty.
Layer three: The LLC’s shareholders bear no liability for its obligations. This is the foundational principle of limited liability companies.
Layer four: The LLC’s management board may face subsidiary liability, but only if they fail to file for bankruptcy in time. Watching the calendar eliminates even this risk.
Layer five: Limited partners are liable only up to the komandytowa sum, reduced by whatever capital they have actually contributed. With proper structuring, this figure can reach zero.
The result: even spectacular business failure need not mean personal financial catastrophe.
The Name: How to Get It Right
The rules governing limited partnership names require inclusion of the general partner’s full corporate name. At the same time, abbreviations of legal form designations are permitted.
In practice, this creates a subtle distinction:
- Correct in official documents: ABC spółka z ograniczoną odpowiedzialnością sp.k.
- Acceptable in commerce: ABC sp. z o.o. sp.k.
One may abbreviate “spółka komandytowa” to “sp.k.” and the general partner’s legal form designation. One may not, however, abbreviate the general partner’s actual name—if the LLC is called “Kowalski i Wspólnicy spółka z ograniczoną odpowiedzialnością,” that entire phrase must appear in the limited partnership’s name.
Counterparties and authorities accept colloquial abbreviations, but knowing the correct form matters—particularly for high-value contracts or court documents.
Taxation: Where the Advantage Lies
Until the end of 2020, Polish limited partnerships enjoyed tax transparency—the partnership itself paid no corporate income tax, and profits were taxed only at the partner level. Since 2021, limited partnerships have been CIT taxpayers, which altered the calculus but did not eliminate the structure’s advantages.
The general partner (the LLC) receives its share of the limited partnership’s profits. It may credit the CIT paid by the limited partnership against its own tax on that income. This mechanism mitigates the effect of double taxation.
Limited partners who are natural persons benefit from an exemption covering fifty percent of their profit share (up to an annual limit of sixty thousand złoty). They may also elect flat-rate taxation at nineteen percent—often more favorable than progressive rates for high earners.
Flexibility in profit allocation permits optimization. The partnership agreement may modify the statutory default rules—instead of distribution proportional to contributions, the partners may establish whatever proportions reflect their actual involvement and expectations.
Social Insurance: The Unavoidable Element
Natural persons who are partners in a limited partnership are subject to social insurance contributions as if they were conducting individual business activity. This means monthly ZUS payments—an element that must figure into any calculation of the structure’s cost-effectiveness.
Where insurance titles overlap (for instance, when a limited partner is also employed under a labor contract), the situation grows complicated, but health insurance contributions remain mandatory regardless of other circumstances.
This represents one of the structure’s genuine drawbacks: the “ZUS burden” on partners constitutes a cost that cannot be engineered away.
The Balance Sheet: Who Is This Structure For?
The sp. z o.o. sp.k. makes sense when:
- You operate in a high-risk industry—construction, development, transportation—where a single disaster can generate liabilities exceeding the company’s assets
- You want to maintain full operational control without exposing personal assets
- You are building a structure involving investors who will contribute capital but prefer neither management involvement nor unlimited risk
- You value flexibility in allocating profits among partners with varying levels of engagement
The sp. z o.o. sp.k. may be excessive when:
- Your business carries low operational risk
- The scale of operations does not justify the cost of maintaining two entities
- Structural simplicity matters more than liability optimization
Complexity as the Price of Security
Let us be frank: the sp. z o.o. sp.k. is a demanding structure. Two entities mean two sets of books, two sets of financial statements, doubled registry obligations. Administrative costs exceed those of sole proprietorship or even a standalone LLC.
But for the entrepreneur building something larger—employing people, signing contracts for significant sums, operating in an environment where a single mistake can cost a fortune—this complexity is the price of peaceful sleep.
A structure in which natural persons retain complete control without exposing personal assets is no accidental legal creation. It represents the careful exploitation of possibilities that Polish company law provides—possibilities that thousands of entrepreneurs employ in the most demanding industries.
The sp. z o.o. sp.k. is not for everyone. But for those who need it, it represents the difference between a business conducted in perpetual anxiety and an enterprise where one can focus on what truly matters: building value.
Founder and Managing Partner of Skarbiec Law Firm, recognized by Dziennik Gazeta Prawna as one of the best tax advisory firms in Poland (2023, 2024). Legal advisor with 19 years of experience, serving Forbes-listed entrepreneurs and innovative start-ups. One of the most frequently quoted experts on commercial and tax law in the Polish media, regularly publishing in Rzeczpospolita, Gazeta Wyborcza, and Dziennik Gazeta Prawna. Author of the publication “AI Decoding Satoshi Nakamoto. Artificial Intelligence on the Trail of Bitcoin’s Creator” and co-author of the award-winning book “Bezpieczeństwo współczesnej firmy” (Security of a Modern Company). LinkedIn profile: 18 500 followers, 4 million views per year. Awards: 4-time winner of the European Medal, Golden Statuette of the Polish Business Leader, title of “International Tax Planning Law Firm of the Year in Poland.” He specializes in strategic legal consulting, tax planning, and crisis management for business.
