Moving from a JDG to a sp. z o.o.

Your JDG has outgrown itself: turnover is near the VAT limit, clients want a contract with a company, ZUS and the health contribution keep growing, and you do not want to be liable for business debts with all your personal assets. That is when people look at a sp. z o.o. Below are the two legal routes, what changes in accounting and tax, and what we take on. The choice of business form is yours: we calculate the options on your numbers.

Two routes

• Converting the JDG into a company (art. 551 of the Commercial Companies Code). The company succeeds the JDG: contracts, permits and most rights and obligations pass to it. You need financial statements of the JDG, a conversion plan signed before a notary, an audit of the plan by an auditor appointed by the court, and entry in the KRS. It usually takes 2 to 4 months.
• A new company and closing the JDG. You register a company through S24 within days, move clients and contracts, then close the JDG. It is faster, but there is no succession: contracts and permits are signed again, and a VAT payer closing a JDG accounts for VAT on remaining assets.

What changes after the move

• Bookkeeping: full accounting (księgi rachunkowe) instead of KPiR or ryczałt, and annual financial statements filed with the KRS.
• Tax: CIT at 9% or 19%, and money reaches the owner as a dividend taxed at 19% or as remuneration. This is the law, not advice on what is better.
• ZUS: the sole shareholder of a sp. z o.o. pays social ZUS like a JDG, plus the health contribution. With two or more shareholders the rules differ.
• Liability: the company is liable for its debts; board members only in cases the law names.
• VAT and KSeF: the company registers for VAT and KSeF itself and has its own NIP.

If your residence card is based on the JDG

Changing the business form may change the purpose of your stay. Check this before you move: a board member of a company has a separate legal basis, see residence permit as a board member.

How we do it

1. We calculate tax and ZUS for the JDG and for the company on your numbers, and you choose the route.
2. For a conversion we prepare the JDG financial statements at the required date, and you sign the plan at the notary.
3. We register the company through S24 or with a notary, file CRBR and NIP-8 after the KRS entry and register VAT.
4. We keep full accounting for the company from day one and close the JDG books.

How much it costs

Full accounting for a company from 690 zł a month; the calculator shows the exact amount. We quote registration and conversion support after a short conversation. Notary, auditor and court fees are paid separately.

Frequently asked questions

Which is better, a JDG or a company?

It depends on income, costs, the number of shareholders and your plans. We calculate both on your numbers and the decision is yours. For a comparison at the start see JDG or sp. z o.o..

Will my client contracts survive?

In a conversion the company succeeds the JDG. With a new company the contracts have to be moved to it.

Can I switch in the middle of the year?

Yes. We close the JDG books at the switch date and start full accounting for the company from the same date.

We are the Polish accounting office of the MK Audit international audit and accounting group. The group’s audit practice has worked in Ukraine since 2000; in Poland we provide accounting and HR only. We work online across Poland and meet in person in Warsaw.

Tell us your turnover and how many shareholders the company will have, and we will propose a plan.