Converting a Sole Proprietorship (JDG) to a Company in Poland 2026

Why convert a JDG to a company?

Reasons for:

1. Protection of personal assets — in a JDG, you are liable with all your assets
2. Lower taxes — corporate income tax (CIT) at 9% (small companies) instead of PIT at 19%
3. Professional image — "spółka z o.o." (LLC) sounds more serious
4. Easier to attract investors — shares, stock
5. Succession — easier to transfer the business

Reasons against:

1. Costs — notary, National Court Register (KRS), full accounting
2. Double taxation — CIT + PIT on dividends
3. Less flexibility — decisions require partner consent
4. More formalities — general meetings, minutes

Available conversion forms

1. Limited Liability Company (spółka z o.o.)

Advantages:

• You are liable only up to your contribution (not personal assets)
• CIT at 9% (small companies, up to 2 million EUR revenue)
• Easy to add new partners

Disadvantages:

• Double taxation: CIT + PIT on dividends (19% Belka tax)
• Full accounting (more expensive)
• Notary, KRS

2. Limited partnership (spółka komandytowa)

Advantages:

• Pass-through taxation
• Limited partner is liable only up to their contribution
• No double taxation (tax transparency)

Disadvantages:

• Requires at least 2 partners
• General partner is liable with all their assets
• Notary costs

3. General partnership (spółka jawna)

Advantages:

• No double taxation
• Tax transparency
• Management flexibility

Disadvantages:

• All partners are liable with all their assets
• Does not protect assets

Conversion process — step by step

Step 1: Resolution on conversion

• Prepare a resolution to convert the JDG into a company
• For an LLC — requires the form of a notarial deed
• Notary cost: from 500 zł to 2,000 zł

Step 2: Asset audit

• Prepare an inventory of JDG assets
• Valuation of assets (equipment, real estate, receivables)
• May require an appraiser

Step 2: Registration in KRS

• Submit an application to register the company in the National Court Register (KRS)
• Cost: 250 zł (court fee) + 100 zł (publication in the Court and Economic Monitor)
• Time: 3–7 days

Step 3: Deregistration from CEIDG

• After KRS registration — deregister the JDG from CEIDG
• The conversion is continuous — you do not need to close and reopen

Step 4: ZUS and taxes

• The company gets a new NIP and REGON
• VAT registration (if applicable)
• ZUS — an LLC does not have entrepreneur ZUS (but employer ZUS applies)

Conversion costs

| Element | Cost | |---------|------| | Notary (LLC) | 500–2,000 zł | | KRS (court fee) | 250 zł | | Publication in MSiG | 100 zł | | Full accounting (annual) | 3,000–6,000 zł | | Legal advisory | 1,000–5,000 zł | | Total | 5,000–13,000 zł |

PCC-3 on contribution to a company

PCC exemption

Converting a JDG to a company is exempt from PCC-3 (tax on civil law transactions) — if the assets contributed to the company are a continuation of the business.

When is PCC required?

• If you contribute additional assets (e.g., a new property)
• If you change the business profile

LLC and taxes

CIT (corporate income tax)

• 9% CIT — small companies (revenue up to 2 million EUR) and newly established
• 19% CIT — large companies

Double taxation

1. CIT — the company pays 9–19% on profit
2. PIT (Belka tax 19%) — you pay on dividends

Effective rate: ~26% (9% CIT + 19% Belka tax on the remainder).

Retained profit — how to avoid double taxation?

• Management board remuneration — a company cost (reduces CIT), but taxed with PIT
• Profit shares — taxed with Belka tax
• B2B contract — if you are the sole partner, you can have a B2B contract with the company

FAQ

Is converting a JDG to a company expensive?

Yes — costs from 5,000 to 13,000 zł (notary, KRS, accounting).

Does an LLC always have lower taxes?

Not always. Double taxation (CIT + Belka tax) can be higher than PIT. It depends on how you withdraw profit.

Can I convert a JDG to a company without closing it?

Yes. The conversion is continuous — you do not need to close the JDG and open a company from scratch. Assets and liabilities transfer to the company.

Is a limited partnership better than an LLC?

It depends. A limited partnership has tax transparency (no double taxation), but requires 2 partners and a general partner with full liability.

Need help?

I provide accounting for JDGs and companies — conversion, CIT, full accounting. From 149 zł + VAT per month.

Reply to [email protected] or visit oxyok.com/pl.

Note: Converting a JDG to a company: costs 5,000–13,000 zł. LLC — CIT 9% + Belka tax 19%. Consult an accountant and lawyer before making a decision.