Correct name of an alternative investment company, given a selected legal form and abbreviations of sp. z o.o., sp. k. and SE

Naming a company seems to be a simple and pleasant issue. In practice, however, there are problems connected with the correct name of alternative investment companies, depending on their business form.

What is the correct name of an alternative investment company: “XYZ spółka z ograniczoną odpowiedzialnością alternatywna spółka inwestycyjna spółka komandytowa”, “XYZ alternatywna spółka inwestycyjna spółka z ograniczoną odpowiedzialnością spółka komandytowa” or “XYZ sp. z o.o. ASI sp.k.”? How should an alternative investment company being a European company be established?

Responses to those questions are given below.

Business name of a legal person – General principles

A general regulation on a business name of a legal person is set out in the Civil Code. In turn, detailed regulations on the establishment, operation and business name of particular legal persons, depending on a legal form of their business, are set out in separate statutory acts.

Pursuant to Art. 43⁵ of the Civil Code, the name of a legal person is the main element of its business name. As a rule, the name must be freely chosen by an enterprise. The enterprise can use a name of an object or a person or a fanciful or combined name, provided that the business name of a partnership meets strict regulations set out in Art. 43⁵ § 2 of the Civil Code.

Pursuant to Art. 43⁵ § 4 of the Civil Code, the enterprise can use an abbreviated business name. The use of an abbreviated business name of a legal person can simplify its operation. The legislator allows legal persons to use an abbreviated business name provided that such an abbreviated name is entered in the register of companies. It is necessary to note, however, that given the regulations on the National Court Register and applicable registration forms, the abbreviated business name will not be visible in the transcript of the register of companies.

It is not permitted to abbreviate names of shareholders being legal persons or surnames in the business name of a legal person, in particular commercial partnerships. In turn, it is permitted to use an abbreviated name of a legal form of an enterprise, like “sp. z o.o.”. Other regulations, like Art. 160 § 2 and Art. 24 § 2 of the Code of Commercial Companies, stipulate that an abbreviated name of a legal form with a full name of the enterprise can used, as well.

Therefore, it is only possible to define an abbreviated business name in the articles of incorporation/association which are filed with the register by the company, which is not, however, justified by law and has solely a functional meaning (see: R. Pabis (in:) J. Bieniak, M. Bieniak, G. Nita-Jagielski, K. Oplustil, R. Pabis, A. Rachwał, M. Spyra, G. Suliński, M. Tofel, R. Zawłocki, Kodeks spółek handlowych. Komentarz, Warsaw 2012, p. 633).

Detailed regulations on a joint stock company are set out in Art. 305 of the Code of Commercial Companies. The business name can be chosen freely, but it should contain the phrase “spółka akcyjna”. In accordance with Art. 305 § 2 of the Code of Commercial Companies, the company can use the abbreviation “S.A.”.

The same applies to a limited liability company. Regulations applicable to the business name of a limited liability company and the use of the abbreviated business name are set out in Art. 160 of the Code of Commercial Companies. The business name can be chosen freely, but it should contain the phrase “spółka z ograniczoną odpowiedzialnością”. In accordance with Art. 160 § 2 of the Code of Commercial Companies, the company can use the abbreviation “spółka z o.o.” or “sp. z o.o.”.

The use of the business name or abbreviated business name of a limited liability company is subject to the same regulations like those applicable to joint stock companies. Thus, it must be assumed that the only solution is to incorporate the abbreviated business name into the company’s articles of incorporation/association to be filed with the register. In addition, it is not possible to specify an abbreviated business name in the draft articles of incorporation/association which are made available in the IT system for the purpose of the electronic registration of a company, either.

Alternative investment companies – Special regulation

In the case of alternative investment companies, the use of an abbreviated business name is subject to different rules because of the Act of 27 May 2004 on Investment Funds and the Management of Alternative Investment Funds (hereinafter referred to as the “Funds Act”). Based on the Funds Act, alternative investment companies must use the phrase “alternatywna spółka akcyjna” or “ASI” in their name.

Pursuant to Art. 8c.6 of the Funds Act, the phrase “alternatywna spółka inwestycyjna” or “ASI” can and must be used in the name, announcement or advertisement, as well as to define the company’s business activity solely by an alternative investment company that is managed by the alternative investment company manager authorised to perform such a business activity.

Therefore, if we analyse Art. 8c.6 of the Funds Act in the context of general principles applicable to business names of legal persons, it must be stated that an alternative investment company managed by the alternative investment company manager authorised to perform such a business activity in accordance with the Funds Act, i.e. having the permission of the Polish Financial Supervision Authority to act as the alternative investment company manager or being recorded in the register of alternative investment company managers, must use the phrase “alternatywna spółka inwestycyjna” or the abbreviated phrase “ASI” in the company’s business name.

Pursuant to Art. 8 of the Funds Act, an alternative investment company may operate as:

• a limited liability company, joint stock company or European company;
• a limited partnership or a partnership limited by shares where a limited liability company, joint stock company or European company is a sole general partner.

Given the generally applicable principle concerning an obligation to indicate a legal form in the business name of a legal person, alternative investment companies must use the phrase “alternatywna spółka inwestycyjna” together with their legal form in their name.

Thus, what should be the name of an alternative investment company operating as a limited liability company which is to be called “XYZ”?

“XYZ alternatywna spółka inwestycyjna spółka z ograniczoną odpowiedzialnością”.

Simple, isn’t it?

As mentioned above, the problem appears when the abbreviated name is to be used. There is no legal or technical way to register an abbreviated business name with an abbreviated legal form in the register of companies.

In the event the abbreviation “ASI” is used, given the possibility and obligation of use of the abbreviation or full name “alternatywna spółka akcyjna”, as stipulated in the Funds Act, the problem seems to be very significant.

As it is not possible to register in the National Court Register the abbreviated name, which in the case of our fictitious company could be:

®      “XYZ ASI spółka z ograniczoną odpowiedzialnością”

®      “XYZ alternatywna spółka inwestycyjna sp. z o.o.”

®      “XYZ ASI sp. z o.o.”,

in practice there can appear a problem connected with the correct use of the company’s abbreviated business name or the use of such an abbreviated version of the business name which was not set out in the company’s articles of incorporation/association.

In addition, the situation becomes even more complicated if an alternative investment company is to operate as a limited partnership or a partnership limited by shares where a limited liability company, joint stock company or European company is a sole general partner.

For example, let’s assume that our alternative investment company will operate as a limited partnership where XYZ spółka z ograniczoną odpowiedzialnością (limited liability company) is a sole general partner.

What should be the correct name of our company?

Given the special regulation stemming from the Funds Act and the regulations of the Code of Commercial Companies applicable to limited partnerships, based on which: if a general partner is a legal person, the name of the limited partnership should contain the full business name of such a legal person plus the phrase “spółka komandytowa” (limited partnership) (the first sentence in Art. 104 § 3 of the Code of Commercial Companies), the correct name of our company will be as follows:

“XYZ spółka z ograniczoną odpowiedzialnością alternatywna spółka inwestycyjna spółka komandytowa”.

The abbreviated name of our company could be:

„XYZ spółka z ograniczoną odpowiedzialnością ASI sp.k.”.

It is necessary to point out that when the business name of a limited partnership is abbreviated, the abbreviated business name of the general partner must not be used (!). Therefore, the following variants must not be used:

“XZY sp. z o.o. ASI sp.k.”

or

“XYZ sp. z o.o. alternatywna spółka inwestycyjna sp.k.”

What should be a business name of an alternative investment company that is a European company?

Legal regulations on a European company do not provide for detailed principles applicable to a business name of a European company. The only requirement is to add an abbreviation “SE” (Societas Europaea) before or after the company’s business name. In addition, the regulation on a European company refers to regulations applicable to a joint stock company and being in force in the member state where the European company has its registered office.

Adequate application of regulations on a joint stock company means that a European company is governed by regulations applicable to a joint stock company, in particular with regard to the establishment and use of the company’s business name and the protection of right to the company’s business name.

Summing up, the business name of a European company can be chosen freely, provided that it also contains the name of the company’s legal form, i.e. “SE”. In the case of a European company having its registered office in Poland, Art. 305 of the Code of Commercial Companies will apply accordingly, provided that the European company is not obliged to incorporate a full legal form “spółka akcyjna” (or “Societas Europaea”) in its business name and will have to use the abbreviation “SE” instead of “S.A.”.

The business name of an alternative investment company being a European company can be for example:

“XYZ alternatywna spółka inwestycyjna SE”

and the abbreviated version of the business name can be:

“XYZ ASI SE”.

However, whatever the legal form of an alternative investment company, to register such a company correctly in the National Court Register, the full business name must be given in the field “Business name used by the company” in the relevant registration form, i.e. the business name incorporating the phrase “alternatywna spółka inwestycyjna” required by the Funds Act.

This issue is also very important during the preparation of the articles of incorporation/association because if the obligatory phrase “alternatywna spółka inwestycyjna” is not used, the application for registration of the company in the National Court Register will be rejected.

Kamila Spalińska, Attorney-at-law 

Roksana Dworak, Lawyer