Converting your JDG into a sp. z o.o.: when it makes sense and how it works

You can turn your JDG (sole trader business) into a sp. z o.o. (Polish limited company) without closing it. The law calls this a transformation, przekształcenie, and the new company simply carries on your business. It needs a notary, an auditor appointed by the court and an entry in KRS, the court register, so it is slower and more expensive than opening a new company. It is worth it mainly when you have contracts, permits or tax reliefs you cannot easily move.

Does a company make sense for you?

A company is not automatically cheaper than a JDG. Before you choose a route, check that the move itself pays off. In 2026 a one-person sp. z o.o. brings:

• ZUS from day one. A sole shareholder pays ZUS like a self-employed person, even without taking any money out: about 2,757 PLN a month in 2026 (1,926.76 PLN social contributions with sickness insurance, plus 830.58 PLN health). Start-up relief and mały ZUS plus (reduced ZUS based on income) do not apply.
• Full accounting. Every company keeps full books. Online accounting offices charge from about 620–650 PLN a month.
• Two layers of tax. The company pays CIT (corporate income tax) on its profit, and a dividend is taxed again when you take it out: 26.29% in total at the 9% CIT rate, 34.39% at 19%. A transformed JDG is stuck on 19% for its first two tax years (see below).

A company usually pays off when a lot of profit stays in it, when you bring in a partner, or when you want your personal assets kept apart from the business. Our guide JDG or sp. z o.o.? compares the two in detail, and what a sp. z o.o. costs to run lists every fee.

Watch out: a company protects its shareholders, not its board members. If you are also the only board member, you can still be personally liable for the company’s debts, taxes and ZUS when enforcement against the company fails, unless, for example, you filed for bankruptcy in time.

Three ways to move from a JDG to a company

A new company set up in S24, the Ministry of Justice’s online system, is the quickest and cheapest: a 250 PLN court fee, no notary and no auditor. But S24 accepts cash contributions only, so a contribution in kind (aport) needs the notary route. With a fresh company, your clients sign new contracts with it, and permits have to be applied for again. You then close your JDG or suspend it.

Transformation fits best when the business has long contracts, public tenders, licences or tax reliefs attached to it, or clients who would rather not re-sign anything.

How a transformation works, step by step

The Commercial Companies Code (KSH) sets out what a transformation needs. A JDG can only become a one-person company, so you are its sole shareholder.

1. Choose a balance date. The plan values your business on a day in the month before the plan is drawn up.
2. Prepare the numbers. You need a valuation of the business’s assets and liabilities, and financial statements as of that day. If you kept a KPiR (the simple tax book) rather than full books, the statements are built from the KPiR totals, your other tax records, a stocktake (spis z natury) and other documents.
3. Sign the transformation plan at a notary (plan przekształcenia, a notarial deed). Drafts of the transformation declaration and of the company’s articles are attached.
4. Ask the registry court to appoint an auditor (biegły rewident). The auditor checks the plan and has up to 2 months from appointment to deliver a written opinion. The court sets the auditor’s fee.
5. Sign the transformation declaration at a notary (oświadczenie o przekształceniu). It states the company form, the share capital (at least 5,000 PLN) and the board members. The articles of association and the board appointment are usually signed in the same deed.
6. File the KRS application. Every board member signs it. The court has 7 days to decide, and the clock restarts if it asks you to fix something. Our guide to KRS explains the register itself.
7. The KRS entry is the transformation day. From that day you are the company’s shareholder. KRS reports the transformation to CEIDG (the register of sole traders) within 7 working days, but you must also file a deletion application (CEIDG-1, free) to remove your JDG’s entry.

Tip: step 2 is where most of the time goes, and clean, complete records make it faster. Komplet, our free Mac app, files each invoice into the right month and pairs it with the bank payment, so your accountant has the year in one place.

After the entry, the same first duties apply as for any new company:

If the company’s name is more than your old business name plus “sp. z o.o.”, it must show the old name in brackets with the word dawniej (“formerly”) for at least a year.

What it costs

The 300 PLN is the general fee for “other” applications to the registry court, and we read it as covering the auditor request. The court will tell you the exact amount. We found no reliable figure for what notaries and auditors actually charge, so ask for quotes first.

Also ask the notary whether PCC applies to your transformation. PCC is the civil law transactions tax, 0.5% of the share capital when a company’s articles are signed. We could not confirm from the law text alone whether it covers a transformation.

What changes for tax, ZUS and your NIP

Taxes. Under the Tax Ordinance, the company takes over the tax rights linked to your business, except those that cannot continue under company tax rules. The JDG’s income up to the transformation day remains yours and goes into your own PIT return. From that day the company pays CIT:

• No 9% CIT in the tax year the company starts or the next one. The rate is 19%.
• Quarterly CIT advances in the first year are open to a company that is “starting a business”. The law text does not make clear whether a transformed JDG counts, so ask your accountant before you plan on quarterly payments.
• Estonian CIT (tax only when profit is paid out) is allowed for a transformed JDG, if you meet its conditions, including the one on employment.

ZUS. Your JDG’s contributions end and the sole-shareholder contributions start, at the full rate. If you were on start-up relief or reduced ZUS, that ends too. Ask ZUS to confirm the exact dates for your case. Our page on ZUS for a sp. z o.o. owner has the details.

NIP. The law lists the transformations where a NIP (tax number) passes to the successor, and a JDG becoming a company is not one of them. The company gets its own NIP, which appears in KRS automatically. Your personal NIP stays with you.

Old debts. You remain jointly liable with the company for the JDG’s business debts from before the transformation, for 3 years from the transformation day.

What happens to contracts, VAT and KSeF

Contracts and permits. The company takes over all the JDG’s rights and obligations, including permits, licences and reliefs, unless a law or the decision granting them says otherwise. Contracts carry on, but tell every client, supplier and your bank about the new name, NIP and KRS number.

VAT and invoices. From the transformation day, invoices go out in the company’s name with its new NIP. Its bank accounts need to appear on the VAT white list, the public list of VAT payers and their accounts. The VAT Act does not spell out how the VAT registration passes over (a VAT-R for the company, and what happens to the JDG’s). Settle it with your accountant or the tax office before the transformation day.

KSeF. Your automatic owner access to KSeF, the National e-Invoice System, is tied to you as a sole trader, not to the company. The company logs in with a qualified e-seal bearing its NIP, or files ZAW-FA naming one person who then grants the other permissions. Do this before the first invoice is due. KSeF explained covers the basics.

For foreigners: a board member does not need a PESEL (Polish personal ID number) to be entered in KRS. But the free online filing of the yearly financial statements must be signed by someone whose PESEL is in KRS. Otherwise it goes through a paid route or a lawyer.

What to do next

1. Work out whether a company pays off for your income, using the ZUS, accounting and tax figures above.
2. Pick the route: transformation, a contribution, or a new company.
3. Ask your accountant for a valuation and a date for the financial statements, and ask a notary for a quote.
4. Plan KSeF access, VAT and the bank for the new NIP before the transformation day.
5. After the KRS entry, file CEIDG-1 to delete your JDG’s entry, report to CRBR within 14 days and file NIP-8 within 21 days.