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For business · Law City Katowice

Converting companies and sole proprietorships

Changing legal form while keeping the business running without interruption. Law firm in Katowice, serving all of Silesia and online.

A conversion lets you change your business's legal form without closing it down and starting over — keeping your contracts, tax ID (NIP) and continuity of operations. We handle it in Katowice and across Silesia, from a cost-benefit analysis through to registration with the National Court Register (KRS).

What does a conversion involve?

A conversion is a change in the legal form of a business — for example, turning a sole proprietorship into a limited liability company, or a general partnership into a limited liability company. As a rule, the business continues in its new form without interruption, and the converted company takes on the rights and obligations of the prior business (the principle of succession). There are exceptions to this principle, though — particularly for permits, licenses and reliefs, which, when converting a sole proprietorship, as a rule do not transfer automatically unless a specific provision says otherwise. We analyze every case individually.

Who this is for

  • Sole proprietors who want to limit liability against their personal assets
  • Partners in partnerships (general or civil-law) considering a limited liability company
  • Businesses that want to move to Estonian CIT or organize succession
  • Owners planning to bring in an investor or sell the business
  • Growing businesses for whom the current legal form has become too risky from a tax standpoint

Scope of services

  • Choosing the legal form to match the scale of the business, its tax position and the owners' plans
  • Preparing the conversion plan together with the required attachments and a valuation of the assets
  • Resolutions, the new company agreement or charter, and the application to the National Court Register (KRS)
  • Working with accountants and tax advisors to assess the PIT, CIT and VAT consequences
  • Handling the matter through to registration of the new form, and organizing contracts and permits afterward

Benefits and risks

Benefits

  • Continuity of operations — as a rule, contracts, the tax ID (NIP) and rights remain in force (the principle of succession)
  • Limited personal liability within a limited liability company
  • Access to Estonian CIT and better-organized succession
  • Easier entry for an investor or sale of shares
  • No need to close the business and start a new one

Things to keep in mind

  • The entrepreneur remains jointly and severally liable with the company for pre-conversion obligations for a certain period afterward
  • Some permits, licenses and reliefs don't carry over automatically (especially for sole proprietorships)
  • The conversion itself can trigger tax consequences that need to be calculated
  • Timing depends on the registry court, which is outside anyone's control
  • You'll need to prepare a plan and reports, and sometimes have them reviewed by an auditor

Frequently asked questions

Do I need to change my contracts with business partners and the bank after converting?
Usually not. As of the conversion date, the company as a rule steps into the rights and obligations of the prior business, so contracts generally stay in force. Still, it's worth informing partners and the bank of the new name and legal form, and checking individual contracts for clauses about a change of party or legal form, since some may require consent or an amendment.
Does converting a sole proprietorship into a limited liability company protect my personal assets?
As a rule, a limited liability company is liable for its own obligations with its own assets, not the shareholders' assets. Two things are worth keeping in mind, though. First, for obligations related to the business that arose before the conversion, the entrepreneur remains jointly and severally liable with the company for a certain period afterward. Second, in certain situations, members of the management board can be held liable for the company's obligations. We go over the scope of that liability using your company's specific situation.
How long does a conversion take, and what does it cost?
The timing depends on the starting and target legal form, on how complete the documents and reports are, and on how long the registry court takes to review the application, which is outside our control. We set the cost individually after a conversation, since it depends on how complex the matter is. After an initial review, we give you a quote and an outline of the work.
Can I keep running the business during the conversion?
Yes. A conversion is designed to happen without interrupting operations — the business keeps running as normal, and the change of legal form takes effect on the date the converted company is entered in the National Court Register (KRS). We plan the process so day-to-day operations aren't affected.
Do the tax ID (NIP) and statistical number (REGON) change?
As a rule, the NIP stays the same thanks to the principle of continuity. What changes is the KRS number and some of the registry data. The details depend on the starting and target legal form — we check them for your specific case.
Does every conversion require an auditor's review?
Not always. An auditor's review of the conversion plan is required in some cases (for example, when converting a sole proprietorship into a limited liability company). We check this at the outset and factor it into the timeline.
Can I opt for Estonian CIT right after converting?
A company formed through conversion can choose Estonian CIT, but it must meet the statutory conditions, and additional rules apply in the first years regarding so-called conversion income. We analyze this before you decide.