Legal steps necessary for the merger of companies:
- Pursuant to Art. 498 and 499 of the Polish Commercial Companies Code, the Management Boards of the companies prepare and agree on the plan of merger of the companies in writing.
According to art. 499 § 1 of the Polish Commercial Companies Code, the merger plan should include at least:
1/ type, name and seat of each of the merging companies, method of merger,
2/ ratio of exchange of shares of the acquired company for shares of the acquiring company and the amount of possible additional payments,
3/ rules concerning the allocation of shares in the acquiring company as well as the date from which the shares entitle to participate in the profit of the acquiring company,
4/ rights granted by the acquiring company to shareholders and persons with special rights in the company being acquired,
5/ special benefits for the members of the governing bodies of the merging companies as well as other persons participating in the merger, if any.
- After agreement on the draft terms of merger, the following appendices to the draft terms of merger shall be drawn up:
1) Draft resolution of the Extraordinary General Meeting of Shareholders
3) Determination of the value of the assets of the Acquired Company on a specified day in the month preceding the submission of the application for announcing the merger plan,
4) Statement containing information on the accounting books of the Acquiring Company prepared for the purposes of the merger as at the date referred to in item (a) above. 4,
5) Statement containing information on the accounting position of the Acquired Company prepared for the purposes of the merger, referred to in item (a) above. 4.
III. Possibility of simplifying the merger of companies
If the Acquiring Company holds 100% of shares in the share capital of the Acquired Company, then, according to Art. 516 of the Polish Commercial Companies Code, the merger procedure allows for a simplified procedure.
The simplified merger procedure consists in the fact that there is no obligation to carry out certain activities, such as:
– Preparation by the management boards of the merging companies of a report justifying the merger, its legal basis and economic justification, and in particular the share exchange ratio being a part of the merger plan.
– Informing each other by the management boards of the merging companies of any material changes in the assets and liabilities of their companies that occurred between the date of preparation of the draft terms of merger and the date of adoption of the resolution on the merger.
– Examination of the draft terms of merger by the statutory auditor and his or her opinion.
- Announcements in Monitor Sądowy i Gospodarczy, the registry court and notices to shareholders
1/ The plan of merger of the companies is subject to publication in the Ministry of Economics, as well as to notification to the Registry Court.
Pursuant to Art. 500 of the Polish Commercial Companies Code, the draft terms of merger should be submitted to the registry court of the merging companies with a request for an expert. The draft terms of merger should be announced not later than one month before the date of the shareholders’ meeting or the general meeting at which the resolution on the merger is to be adopted. (However, in the case of applying the simplified procedure, the merger plan does not require an examination of correctness and reliability by an expert within the meaning of art. 502 § 1 of the Polish Commercial Companies Code in conjunction with art. 516 § 5 and 6 of the Polish Commercial Companies Code).
It is not necessary to announce, if the company, not later than one month before the date of commencement of the shareholders’ meeting at which the resolution on the merger is to be adopted, makes the draft terms of merger available to the public free of charge on its website until the end of the meeting adopting the resolution on the merger.
According to the Art. 504 of the Polish Commercial Companies Code, the management boards of the merging companies should notify the shareholders of both Companies twice, in the manner provided for convening shareholders’ meetings or general meetings, of the intention to merge with another company. The first notice should be given not later than one month before the planned date of adoption of the resolution on the merger, and the second at an interval of not less than two weeks from the date of the first notice.
The notification should contain at least:
1) the number of the Court and Commercial Gazette in which the announcement referred to in Article 500 § 2 was made, unless the notification is the subject of the announcement;
2) the place and time limit in which the shareholders may get acquainted with the documents referred to in Art. 505 § 1 of the Polish Commercial Companies Code, this time limit may not be shorter than one month before the planned date of adoption of the resolution on the merger.
- Registration in the National Court Register
Within 7 days from the date of adoption of the merger resolution, the Management Board of each of the merging companies should report the resolution on the merger to the registry court in order to enter a mention of such resolution with an indication as to whether the merging company is the acquiring company or the company being acquired.
At the request of the acquiring company, an announcement of the merger of the companies shall be made. The obligation to notify the President of the Office of Competition and Consumer Protection of the intended concentration cannot be forgotten. If the consent is not necessary, a statement under pain of criminal liability is sufficient, a statement that the intention of concentration was not subject to the obligation to notify.
The merger takes place on the date of entry of the merger in the register relevant for the seat of the acquiring company. The above entry results in the deletion of the acquired company, which takes place ex officio.
- The effects of the merger of companies in the area of licenses and concessions
Pursuant to art. 394 § 2 of the Polish Commercial Companies Code. In accordance with Article 394 § 2 of the Code of Commercial Partnerships and Companies, the acquiring company shall transfer, as of the merger date, in particular, the permits, licences and discounts, which were granted to the acquired company, unless the act or decision on granting the permit, licence or discounts provides otherwise. It should therefore be determined whether the concession granted to the society does not contain any limitations in this respect.
If the concession does not contain any exclusions, the disclosure in the books and registers of the transfer of the concession to the acquiring company takes place at the request of the Acquiring Company.
Article 13(2) of the Road Transport Act provides for the so-called conditional transfer of rights from the licence. They are allowed in the case of the licence:
merger, division or transformation, in accordance with separate regulations, of an entrepreneur holding a licence.
The only condition for the transfer of rights from the licence provided for in the Road Transport Act is that the acquirer of the licence rights meets the requirements for obtaining the licence.
The regulation in question refers to the principle of conditional continuation of administrative and legal rights resulting from the administrative decision in the case of entrepreneur’s transformation processes, as expressed in the provisions of the Commercial Companies Code. Bearing in mind the provisions of the Act of 15 September 2000. – The Commercial Companies Code (Journal of Laws No. 94, item 1037, as amended) regulating the matter of mergers, divisions and transformations of commercial law companies should, as a rule, support the position that as a result of these processes the rights and obligations succession takes place. The literal wording of Art. 553 § 1 of the Polish Commercial Companies Code, according to which the transformed company is entitled to all rights and obligations of the transformed company, orders that the position that the transformed company and the transformed company are identical entities is justified. Moreover, pursuant to Art. 553 § 2 of the Polish Commercial Companies Code. “The transformed company shall remain an entity, in particular, permits, concessions and reliefs, which were granted to the company before its transformation, unless the act or decision on granting the permit, concession or relief provides otherwise”.
In addition to the conditional transfer of the licence rights set out in Article 13(2), pursuant to Article 13(4) of Ustawa o zwalczaniu nieuczciwej konkurencji (the Act on Trading in Goods), it is possible to obtain consent to the exercise of the rights under the licence by limited liability companies in which the company holding the licence holds shares, if they have entered into an agreement to lease or lease the use of a motor vehicle notified for the purpose of carrying out activities covered by the licence. This consent shall be given by way of an administrative decision issued by the Chief Road Transport Inspector. The only necessary condition for the consent referred to in Art. 13 par. 4 of the T&C is that the commercial law companies fulfil the conditions for obtaining the licence.