Converting a JDG into a sp. z o.o. in 2026: 6 steps, costs and taxes

You convert a sole trader business (JDG, jednoosobowa działalność gospodarcza) into a single-member sp. z o.o. in six steps: a valuation, a conversion plan at a notary, an opinion from a court-appointed auditor, a conversion statement, the articles of association and the KRS entry. The company comes into being on the day of the entry and takes over the rights and duties of the JDG, including contracts, permits and licences (art. 584¹ and 584² KSH, the Commercial Companies Code).

Law as of 22 October 2026.

Converting makes sense when the business has contracts, licences or concessions you do not want to move by hand. It also has costs that guides often skip: for two years the company does not get 9% CIT, and the shareholder pays full ZUS from day one. Below: the steps, the costs, taxes, ZUS and a comparison with founding a new company. Whether a company pays off at all, we calculate in JDG or sp. z o.o..

Who can convert a JDG

Any individual entrepreneur running a business in their own name can convert it (art. 551 § 5 KSH). The result is always a single-member company: on the day of conversion the former entrepreneur becomes its only shareholder (art. 584² § 3 KSH). You can admit more shareholders only afterwards, for example by selling some shares.

The share capital of a sp. z o.o. is at least 5,000 zł, and one share at least 50 zł (art. 154 KSH).

Conversion step by step

1. Valuation and financial statements. Set the book value of the business assets on a chosen day in the month before the plan is drawn up. Prepare a valuation of assets and liabilities and financial statements as of that day. If you keep a KPiR (the simplified tax ledger), the statements are built from the KPiR totals, other records, a stock count and documents (art. 584⁷ KSH).
2. Conversion plan at a notary. The plan is a notarial deed (art. 584⁶ KSH). Attached to it: the draft conversion statement, the draft articles of association, the valuation and the financial statements (art. 584⁷ § 2 KSH).
3. Court auditor. On your application, the registry court for the business seat appoints an auditor (biegły rewident). The auditor examines the plan and, within the period the court sets, no longer than two months, files an opinion with the court and with you. The court sets the auditor's fee, and you pay it (art. 584⁸ KSH).
4. Conversion statement. You make it as a notarial deed. It states the legal form, the share capital, any rights granted to you personally as shareholder and the management board (art. 584⁹ KSH).
5. Articles of association and the board. You sign the articles of association and appoint the board members (art. 584⁵ pkt 3 and 4 KSH). The only shareholder usually also becomes the president.
6. KRS application. All board members file the application for entry (art. 584¹¹ KSH). The court fee is 500 zł (art. 52 ust. 1 of the act on court costs in civil cases). On the day of the entry the JDG becomes a company and the entrepreneur is removed from CEIDG, the business register (art. 584¹ and 584⁵ pkt 5 KSH).

You cannot convert through S24, the online template system. The plan and the statement need notarial deeds, so the reduced 250 zł fee for template companies does not apply.

What the conversion costs

For comparison: a new company with 5,000 zł capital costs about 274 zł through S24. Details in how to start a sp. z o.o., and the monthly running costs are in the company cost calculator.

What passes to the company and what does not

• Contracts, permits, licences and reliefs pass to the company, unless a statute or the decision says otherwise (art. 584² KSH).
• Business name. If you change it by more than adding "spółka z ograniczoną odpowiedzialnością", for at least a year you show the old name in brackets with the word "dawniej" (formerly) (art. 584³ KSH).
• Old debts. For JDG obligations that arose before the conversion you are jointly liable with the company for 3 years from the conversion day (art. 584¹³ KSH). Limited liability covers only new obligations.
• Tax rights. The company takes over the JDG's tax rights linked to the business, except those that cannot continue under CIT rules (art. 93a § 4 of the Tax Ordinance). The provision covers rights only, not obligations: the JDG's tax arrears stay with you.
• NIP. The tax number does not pass to the company. A NIP passes to a successor only in the cases the act lists, and a JDG conversion is not among them (art. 12 ust. 1 of the act on taxpayer registration). The company gets its own NIP.

A new NIP means a new VAT registration if the company is to be an active VAT payer: you file VAT-R before the first sale (art. 96 ust. 1 of the VAT act), as described in VAT registration in Poland. KSeF works per NIP, so the company needs its own KSeF permissions, and from the day of conversion it issues invoices under its own NIP.

Taxes after the conversion

CIT: 19%, not 9%, for two years

A company formed by converting a JDG does not apply the 9% rate in the tax year it started and in the next year (art. 19 ust. 1a pkt 2 of the CIT act). It pays 19%. The same rule covers a company that received a previously run business or its assets worth more than 10,000 euro (pkt 3). The other conditions for 9% are in CIT 9% or 19%.

Estonian CIT has no such exclusion. Art. 28k ust. 1 pkt 5 of the CIT act excludes companies formed by merger, division or contribution of a business, but not by converting an entrepreneur. You file the notice by the end of the first month of the tax year in which you want the lump-sum tax (art. 28j ust. 1 pkt 7). More in Estonian CIT.

Fixed assets and PIT

On the conversion day you draw up a list of the business assets (art. 24 ust. 3f of the PIT act). The company depreciates fixed assets from the initial value the JDG used (art. 16g ust. 1 pkt 4b of the CIT act). For the period up to the conversion you settle PIT as before, in your return for that year.

ZUS and health contribution

As the only shareholder you are insured like a person running a business (art. 8 ust. 6 pkt 4 of the social insurance act). Preferential ZUS is only for people running a business (art. 18a of that act), so it ends with the conversion.

Example for 2026: a JDG on preferential ZUS and the 19% flat tax with a low income pays 420.86 zł in social contributions and 432.54 zł minimum health contribution, 853.40 zł a month in total. The only shareholder of a company pays 1,788.29 zł in social contributions and 830.58 zł health contribution, 2,618.87 zł in total. The difference is 1,765.47 zł a month, or 21,185.64 zł a year. Details in sole shareholder ZUS contributions.

Conversion or a new company

Example: the company earns 200,000 zł a year and keeps the profit. At 19% it pays 38,000 zł CIT, at 9% 18,000 zł. The art. 19 ust. 1a exclusion therefore costs 20,000 zł a year, 40,000 zł over two years. If your JDG is mostly you and a laptop, a new company usually comes out cheaper. If you hold a licence, long contracts or substantial assets, converting saves work. How much you keep when you pay out profit, check in the dividend or salary calculator.

How Norman helps

Norman runs the accounting of a sp. z o.o. in Poland from the first day after the entry: it sends the company's invoices to KSeF, pulls purchase invoices and matches bank payments to documents. Full books come with Pro for 49 zł a month, net, and CIT, VAT and JPK_V7, which Norman prepares for your approval, with Max for 119 zł. Work out the company's costs after the conversion for free in the company cost calculator, and read more about Norman on the home page.

Frequently asked questions

How long does converting a JDG into a sp. z o.o. take?

The longest stage is the auditor's opinion: the court sets a deadline of no more than two months from the auditor's appointment (art. 584⁸ § 4 KSH). Add the valuation, two notary visits and the KRS processing time.

Do I keep my NIP after the conversion?

No. The JDG's NIP does not pass to the company, because the NIP act does not list this conversion among the exceptions (art. 12 ust. 1). The company gets its own NIP and registers for VAT itself.

Am I liable for the JDG's debts after the conversion?

Yes, jointly with the company for 3 years from the conversion day, for business obligations that arose before that day (art. 584¹³ KSH).

Will a converted company pay 9% CIT?

Not in the year it started and the year after; then it pays 19% (art. 19 ust. 1a pkt 2 of the CIT act). Estonian CIT is available from the start.

Do I need an auditor for the conversion?

Yes. A court-appointed auditor examines the entrepreneur's conversion plan (art. 584⁵ pkt 1 and 584⁸ KSH). The court sets the auditor's fee.