The Joint-Stock Company is Not King: Legal Form Affects the Performance of the Company

The choice of legal form affects many aspects of the company's operation and is one of the key decisions that an entrepreneur must make. In this article, we conduct a comparative analysis of six legal forms of companies in terms of efficiency, indebtedness, growth and risk. Based on 72,596 observations of companies operating in Poland in the years 2005–2018, we show that the corporate form and limited liability, contrary to popular opinion, do not ensure the highest efficiency. They also do not stand out in terms of growth and risk. The article contributes to the entrepreneurial literature by showing that entrepreneurship, direct involvement with the company, and the specific bond between partners are still key success factors. On the other hand, by showing that the agency problems resulting from the separation of ownership from management destroy all the attributes assigned to corporations, the study contributes to the literature on corporate governance.