Transformation of a civil partnership into a general partnership

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The transformation of a civil partnership into a general partnership is provided for in the Code of Commercial Companies. The most important consequence of this is the change in the form of economic activity - a civil partnership, operating on the basis of a partnership agreement,, as a result of transformation into a general partnership, becomes an entity of commercial law and is subject to the same entry in the National Court Register. This is stated in the provisions of the Commercial Companies Code:

Art. 26 § 4 The company referred to in art. 860 of the Civil Code (civil partnership), may be transformed into a general partnership, however, the general partnership agreement cannot be concluded using the template of the agreement. The transformation requires notification to the registry court by all partners.

Transformation of a civil law partnership into a general partnership - resolution of the partners and adjustment of the agreement to the requirements of the general partnership

The first step towards transforming a civil partnership is adopting a resolution by its partners to transform it into a general partnership. It should clearly express consent to the transformation and specify the scope of matters that are the subject of entry in the National Court Register.

The civil partnership agreement must be adjusted by the partners to the requirements that the law provides for the general partnership agreement, which was confirmed by the resolution of the Supreme Court of March 12, 2003, reference number III CZP 96/02: To the application for registration of a general partnership pursuant to Art. 26 § 4 of the Code of Commercial Companies and Partnerships a civil partnership agreement with changes should be attached, adjusting its content to the requirements for a general partnership.

In view of the above, adjusting the contract in accordance with Art. 25 of the Commercial Companies Code includes the preparation of an annex to the existing civil law partnership agreement, which includes:

  • company and registered office of the company,

  • specification of contributions made by each partner and their value,

  • the company's subject of activity,

  • the duration of the company, if specified.

In addition, the general partnership agreement should also specify the manner of representing the company, indication of partners managing the company's affairs, distribution of profits and losses, and specify the activities of day-to-day management and activities beyond ordinary management.

In addition to the annex to the civil law partnership agreement, a consolidated text of the general partnership agreement should be prepared, which, like the annex, must be signed by all partners in the presence of a notary. The notarized specimen signatures of partners authorized to represent the company together with a notarized list of partners constitute attachments to the registration forms of the general partnership in the register of entrepreneurs of the National Court Register.

General partnership application to the National Court Register

Notifications of a general partnership, in accordance with the provisions of Art. 26 § 4, may be made by each of the partners in the local court of registration to the register of entrepreneurs of the National Court Register. The notification is made on the KRS form - W1 (application for registration of the entity in the register of entrepreneurs - general partnership) with the following attachments:

  • KRS - WH (method of establishment of the entity),

  • KRS - WB (partners of a general partnership),

  • KRS - WK (partners authorized to represent the company),

  • KRS - WM (subject of activity).

Registration of a general partnership in the register of entrepreneurs is subject to a fee of PLN 500, while the announcement of an entry in the Court and Economic Monitor - in the amount of PLN 100. A proof of payment of these fees must be submitted with the application.

 

Important!

In addition to the above attachments, the application for registration of a general partnership should be accompanied by a copy of the articles of association adapted to the provisions of the general partnership agreement, as well as specimens of signatures of persons authorized to represent the partnership, certified by a notary, as well as the surnames and names of partners, their addresses or addresses for service.

Transformation of a civil law partnership into a general partnership - the effects of transformation

Entry of a general partnership in the register of entrepreneurs is constitutive - upon entry of the transformed company into the register, a commercial law company is established, and the existing partners of the civil partnership become partners of the general partnership. Thus, on the day of transformation, the court deletes the civil partnership ex officio from the register. It should be noted that as a result of the transformation, the civil law partnership is not liquidated and a new company is created in its place. The change concerns only the systemic form, so the legal existence of the transformed company continues. Therefore, the general partnership will use the NIP and REGON number of the civil partnership.

 

Important!

The general partnership established from the transformation of a civil partnership is the legal successor of the civil partnership - it enters into its rights and obligations and, as a rule, becomes the subject of concessions, concessions and permits that the partnership was entitled to before the transformation. Moreover, in accordance with the judgment of the Supreme Court of 7 May 2009, reference number IV CSK 14/09, the general partnership established from the transformation becomes the owner of the movable property and real estate of the former joint civil partnership without the need to perform additional legal actions.

 

The change in the legal form of the company, due to the identity of the transformed and transformed company, does not affect the settlements of income tax by its partners. They will retain the status of taxpayers of personal income tax, therefore they will independently settle the income from participation in the company. The transformed company, i.e. the general partnership, will also be able to continue recording business operations in the revenue and expense ledger kept so far. However, according to the provision of Art. 12 sec. 3 point 1), if the company had an accounting book before the transformation, there is no obligation to close the book and open a new one.

Under the legal transactions tax, the transformation of a civil law partnership into a general partnership will have consequences if the existing assets of the partnership increase as a result of the transformation. Then the amendment to the articles of association will be subject to tax on civil law transactions, and the rate will be 0.5%. In such a case, the taxable amount is the value of the general partnership's contributions as a result of the transformation, less the fees incurred in connection with the registration of the company in the National Court Register and the notary's costs incurred in drawing up an annex to the articles of association of a civil partnership or a new general partnership agreement. However, this tax is not subject to that part of the contribution which has already been taxed with tax on civil law transactions before the conversion.

When a civil partnership is transformed into a general partnership, the issue of liability of its partners changes. Pursuant to the Code of Commercial Companies, a partner of a general partnership is liable for the obligations of the partnership with all his property, jointly and severally with other partners and with the partnership. Importantly, the partners' liability is subsidiary - the company is liable first, and then the partners are liable with all their assets without restrictions. Enforcement of the creditor against the assets of the partner will therefore take place only when it is not possible to recover the debt from the assets of the partnership, i.e. unlike in the case of partners of a civil law partnership who are immediately jointly and severally liable with all their assets without restrictions.