What is the legal personality of a legal entity, and which companies possess it?

Legal Personality of a Legal Entity

The legal personality of a legal entity refers to its possession of the qualities of a legal subject (legal capacity and capacity to act).

• Legal capacity of a legal entity is its ability to possess the rights and obligations provided by law. It can be of two types:
  1. General (universal) legal capacity. This allows a company to have the rights and obligations necessary for any type of activity in the sphere of civil law. This type of capacity is possessed by commercial organizations, except for state and municipal unitary enterprises.
  2. Special legal capacity. This allows a company to have civil rights that correspond to the purposes of its activity as outlined in its founding document, along with related obligations. This is characteristic of non-profit organizations, as well as state and municipal unitary enterprises among commercial organizations.
• Capacity to act of a legal entity refers to its ability to independently participate in civil turnover, i.e., by its own actions to acquire, create, exercise, and fulfill civil rights and obligations.

IMPORTANT: A legal entity’s legal personality arises at the moment of its state registration and ceases at the moment of its liquidation.

Rights of legal entities with legal personality:

• Right to conclude contracts
• Right to own and manage property
• Right to act as a plaintiff in court
• Right to be a defendant in court
• Right to have a name, location, and seal

Obligations of legal entities with legal personality:

• Obligation to comply with laws and refrain from violations
• Obligation to fulfill contractual obligations
• Obligation to pay taxes and fees
• Obligation to provide activity reports

Which companies have legal personality:

• Limited liability companies (Spółka z ograniczoną odpowiedzialnością, Sp. z o.o.)
• Joint-stock companies (Spółka akcyjna, S.A.)
• Limited partnerships (Spółka komandytowa, Sp.k.)
• State-owned enterprises (Przedsiębiorstwo państwowe, P.P.)
• Municipal companies (Spółka komunalna)
• Non-profit organizations (Organizacje pozarządowe, NGO)
• Foundations (Fundacja)
• Associations (Stowarzyszenie)
• Cooperatives (Spółdzielnia)

What are organizational units without legal personality?

Organizational units without legal personality are structures that operate within a legal entity but do not have separate legal personality. They cannot enter into contracts, bear property responsibility, or act in court on their own behalf. Examples include branches, representative offices, subsidiaries, and partnerships.

Advantages:

• Simplicity of creation (easy registration and dissolution process)
• Limited liability

Disadvantages:

• Lack of the right to conclude contracts and act in court on their own behalf
• Cannot borrow funds under their own responsibility

When is a legal entity established in Poland?

A legal entity with legal personality in Poland (e.g., a limited liability company, a simple joint-stock company, or a joint-stock company) is established at the moment of its entry into the National Court Register.

Before registration, capital companies may exist in the form of “companies in organization,” which have limited legal capacity. They can engage in transactions but are not fully-fledged legal entities.
The only exception is a single-member limited liability company in organization, which cannot represent itself and must wait for registration. Partnerships, on the other hand, are not recognized as incomplete legal entities before registration and cannot conduct business activities until they are entered into the register.

If you have any questions, write to us at office@progressholding.pl.