Legislative changes that entered into force on 1 January 2020 allow craftspeople to operate through commercial companies and partnerships. Previously, this was not permitted, and craftspeople operating in that form lost the privileges associated with guild membership.
A new definition of craftsperson
The latest amendment to the Crafts Act (Journal of Laws 2019, item 1495) changed the definition of a craftsperson. Since the beginning of the new year, it has no longer been limited to master craftspeople and journeymen operating as sole traders. It now also covers commercial companies and partnerships, including Polish limited liability companies (sp. z o.o.), formed by appropriately qualified individuals. This form of operation is particularly attractive to larger businesses seeking to limit the risks of personal liability for their business while retaining the privileges granted to craftspeople, including those relating to vocational training and state funding for it.
However, the particular nature of craft occupations has prompted certain restrictions, discussed below.
Types of craft companies and partnerships
A commercial partnership qualifies as a craftsperson if its business draws on the professional craft qualifications and personal work of at least one partner. Partners without those qualifications may be the spouse, ascendants or descendants of the craftsperson partner. A partnership may, of course, also be formed entirely by partners whose professional qualifications allow them to qualify as craftspeople. The permitted partnership forms are Polish registered partnerships, limited partnerships and partnerships limited by shares.
The legislature also allows a single-member capital company to qualify as a craftsperson. In practice, these will probably be Polish limited liability companies. As noted above, this is particularly advantageous for those operating on a larger scale. Such a company may arise only through the conversion of a sole trader business run by a craftsperson. Converting a sole trader business into a company is a relatively time-consuming process requiring numerous documents. It can, however, significantly reduce the risk associated with liability for the business out of one’s personal assets.
Craft companies are not available to the largest businesses
Craft companies and partnerships must also qualify as micro, small or medium-sized enterprises under the Entrepreneurs’ Law. This requirement applies both to partnerships and to capital companies. The largest businesses will therefore be unable to enjoy the entitlements associated with guild membership.
The Act of 6 March 2018, the Entrepreneurs’ Law, defines only micro, small and medium-sized enterprises. A ‘large enterprise’ is an entity falling outside those definitions, namely one which, in each of the last two financial years:
- had an average annual workforce of at least 250 employees; or
- recorded annual net turnover from sales of goods, products and services and from financial operations exceeding the PLN equivalent of EUR 50 million, while its total balance sheet assets at that year-end also exceeded the PLN equivalent of EUR 43 million.
You can read about other legislative changes that entered into force at the beginning of this year here.
