Structure and process, legal regulation and consents


How are acquisitions and disposals of privately owned companies, businesses or assets structured in your jurisdiction? What might a typical transaction process involve and how long does it usually take?

To dispose of privately owned companies (which, in Poland, generally means a limited liability company or a joint-stock company), businesses or assets, a sale and purchase agreement is usually executed between the relevant parties. The entire transaction process may be broken down into the following stages:

  • concluding of a letter of intent or a framework agreement;
  • due diligence;
  • negotiations and drafting of transaction documentation;
  • closing (conclusion of the sale and purchase agreement or any ancillary agreements, or both); and
  • post-closing actions.

A frequently encountered model in Poland is to sign a framework or conditional agreement that defines the conditions that must be fulfilled before signing of the final agreement transferring ownership, such as, for example, obtaining permission for a concentration from the Polish competition watchdog or for an acquisition of real estate by a foreigner. After closing, the buyer is required to pay taxes due and, in order to disclose the changes made by the transaction, file the relevant motions with, inter alia, the National Court Register (NCR) and the Land and Mortgage Register. Additionally, following a share deal and acquisition of the shares, under the Commercial Companies Code, the buyer is obliged to notify the company of any change of shareholder and, if applicable, of the establishment of control by the buyer over the company. The length of the process of acquiring a privately owned company, business or assets depends on the complexity of the issues and the number of parties involved. From our experience, owing to competitive pressure between the parties involved, transactions based on an auction process with multiple potential buyers are usually more effective and shorter.

Legal regulation

Which laws regulate private acquisitions and disposals in your jurisdiction? Must the acquisition of shares in a company, a business or assets be governed by local law?

Private acquisitions and disposals are mainly regulated by:

  • the Civil Code;
  • the Commercial Companies Code;
  • the Act on Competition and Consumer Protection;
  • the Act on Commercialisation and Certain Employee Rights;
  • the Labour Code;
  • the Act on Trade Unions;
  • the Act on Information and Consultation of Employees;
  • the Act on Acquisition of Real Estate by Foreigners; and
  • the Act on the National Court Register.

Under Polish law, the acquisition of shares in a company, a business or assets may be governed by any law chosen by the parties. However, there is some doubt among legal professionals and commentators whether this freedom in choice of law negates the effect of the mandatory provision of the Commercial Companies Code that provides that the disposal of shares in a Polish limited liability company must be made in written form with notarised signatures. A similar issue arises with respect to a transfer of shares of a Polish private joint-stock company (which are different depending on whether the company has registered or bearer shares). A transfer of registered shares must be made in writing by making a declaration on a share certificate or in a separate document and requires delivery of the share certificate. The transfer of bearer shares does not require any specific form, and the shares are transferred by delivery of the share certificates. In asset deals, the sale of an enterprise must be made in written form with notarised signatures, but if the enterprise includes real estate located in Poland, the agreement must be made in the form of a notarial deed, regardless of the chosen law.

Legal title

What legal title to shares in a company, a business or assets does a buyer acquire? Is this legal title prescribed by law or can the level of assurance be negotiated by a buyer? Does legal title to shares in a company, a business or assets transfer automatically by operation of law? Is there a difference between legal and beneficial title?

Polish law does not distinguish between legal and beneficial title: a buyer may acquire only full legal title to shares or assets. Thus, it is not possible for the buyer to negotiate a level of assurance. It is crucial for the buyer to determine if the seller has legal title to shares in a company, a business or assets before entering into the transaction. A seller who has no legal title to shares cannot successfully transfer the shares to the buyer. Such legal defects occur, for example, when the shares being sold are encumbered by a right of pre-emption, the previous sale and purchase agreement failed to meet the legal form requirements (see question 2) or if the shares were created through a capital increase not entered in the NCR before the date of sale. It is also essential for the buyer to examine the pledge register to verify whether the shares or assets are subject to a registered pledge. If a registered pledge has been established and the pledge agreement prohibits the sale, the sale will be invalid unless the buyer did not know and could not have known of the prohibition. In the case of a transfer of real estate, a buyer can rely on the Land and Mortgage Register, according to which if the seller of the real estate is entered in the Land and Mortgage Register as the rightful owner, the seller may effectively transfer title to the real estate to a good-faith buyer, even if the seller is not in fact the rightful owner.

Multiple sellers

Specifically in relation to the acquisition or disposal of shares in a company, where there are multiple sellers, must everyone agree to sell for the buyer to acquire all shares? If not, how can minority sellers that refuse to sell be squeezed out or dragged along by a buyer?

Minority shareholders of limited liability companies may not be squeezed out. However, the articles of association of a limited liability company may provide for the possibility of a forced buy-back of shares in certain situations. In addition, shareholders holding more than half of the share capital may apply to the court for the expulsion of a minority shareholder (or shareholders, if allowed by the articles of association) with good cause. The shares of the expelled shareholder are taken over by the remaining shareholders or third parties for a fair market price as determined by the court.

Unless the articles of association provide more stringent requirements, minority shareholders of private joint-stock companies may be squeezed out if they hold no more than 5 per cent of the shares, the majority shareholders hold at least 95 per cent of the shares and there are no more than five majority shareholders each holding not less than 5 per cent of the shares. The milestone steps of this squeeze-out procedure are:

  • adoption of a squeeze-out resolution at a general shareholders’ meeting by a qualified majority of 95 per cent of the votes (one share, one vote principle): the general shareholders’ meeting may be held at any time subject to three weeks’ notice (two weeks’ notice if all issued shares are registered shares and the meeting may be called by registered mail or courier);
  • announcement of the squeeze-out resolution together with a call to deposit the share certificates of the squeezed-out shares with the company or a brokerage house;
  • valuation of the squeezed-out shares either by an expert appointed by the general shareholders’ meeting or the court (within the time period agreed with the company or set by the court) and announcement of the squeeze-out price;
  • deposit of the share certificates by the squeezed-out shareholders with the company or a brokerage house (within one month of the announcement of the squeeze-out resolution for those not present at the meeting);
  • payment of the squeeze-out price by the majority shareholders to the company within three weeks of the announcement of the squeeze-out price; and
  • transfer of share ownership and possession of the deposited share certificates to the majority shareholders and release by the company of the squeeze-out price to the minority shareholders: after the company receives the full purchase price (if the minority shareholders do not deposit all share certificates relating to the squeezed-out shares, the management board may cancel these share certificates and issue new ones in their place).
Exclusion of assets or liabilities

Specifically in relation to the acquisition or disposal of a business, are there any assets or liabilities that cannot be excluded from the transaction by agreement between the parties? Are there any consents commonly required to be obtained or notifications to be made in order to effect the transfer of assets or liabilities in a business transfer?

According to Polish contract law, a buyer may generally choose which assets or liabilities should be subject to the transaction. Nevertheless, if an asset deal entails a transfer of a work establishment, or an organised part of it, the employees assigned to the transferred assets are automatically transferred to the acquirer (article 23(1) of the Labour Code). A transferred employee may not refuse to work for the new employer, but has a right to terminate his or her employment agreement within two months of the transfer upon seven days’ advance notification. Moreover, unlike the buyer of specific assets who does not assume liability relating to the transferred assets, the buyer of an enterprise (the Polish Civil Code defines an enterprise as a set of tangible and intangible assets dedicated to a business activity) is subject to joint and several liability for the past operations of the enterprise unless the buyer was not aware of these obligations despite having exercised due care. This liability is subject to a statutory cap of the value of the acquired enterprise. Although it is standard practice to allocate liability differently in the sale and purchase agreement, such agreement is binding only between the parties and third parties continue to have recourse to both the seller and the buyer.

In transactions involving the transfer of assets or liabilities, it is necessary to obtain various types of approvals or permits, the lack of which may cause the entire transaction to be invalid. These include corporate approvals in the form of resolutions from specific corporate authorities (such as the shareholders’ meeting or the supervisory board), third-party consents to the transfer of obligations and approvals from relevant government authorities (eg, the Minister of the Interior and Administration or the Competition Authority; see question 6).


Are there any legal, regulatory or governmental restrictions on the transfer of shares in a company, a business or assets in your jurisdiction? Do transactions in particular industries require consent from specific regulators or a governmental body? Are transactions commonly subject to any public or national interest considerations?

Generally, the direct or indirect acquisition of real estate in Poland by foreigners (individuals, companies and partnerships), except those from the European Economic Area, requires a permit issued by the Minister of the Interior and Administration. A transaction is null and void if the required permit is not obtained prior to closing. The unrestricted transfer of agricultural land is allowed only to individual farmers or certain public entities. Transfer of such land to other entities is limited and requires a permit issued by the President of the Agricultural Property Agency. In the case of a share deal, the Agricultural Property Agency has a pre-emptive right over shares in companies that are owners of agricultural land, excluding shares admitted to trading on a regulated market and shares disposed of by the State Treasury.

Moreover, business combinations such as mergers, takeovers of direct or indirect control, joint-venture formations or acquisitions of assets that generate a turnover exceeding €10 million in Poland in any of the two financial years preceding the notification may be subject to notification and approval of the President of the Office of Competition and Consumer Protection (Competition Authority). A notification to the Competition Authority is compulsory only if at least one of the following conditions (subject to certain exceptions) is met:

  • the combined worldwide turnover of the capital groups of both parties to the transaction in the financial year preceding the year in which the notification is made exceeded €1 billion; or
  • the combined turnover of the capital groups of both parties to the transaction in Poland in the financial year preceding the year in which the notification is made exceeded €50 million.

Transaction completion prior to clearance or lack of notification, if it is required, may result in a fine of up to 10 per cent of the turnover in the financial year preceding the year in which the penalty is imposed.

Provisions aimed at protecting strategic Polish companies from hostile takeovers were introduced in the form of the Act on Controlling Specific Investments, dated 24 July 2015. The Act obliges investors to notify Poland’s Minister of Energy or Prime Minister of their intention to buy shares in a strategic company. The relevant authority then has 90 days to either allow or block the deal. The list of strategic companies has been determined by the Council of Ministers with an ordinance dated 27 December 2018, and includes eight Polish companies in the energy, oil, gas, fuel and telecom sectors.

Are any other third-party consents commonly required?

Apart from mandatory provisions of law and approvals from relevant government authorities, the articles of association of a company may impose additional restrictions on transactions such as requirements for shareholder approval for share transfers or asset transactions above a certain value. Transactions carried out in breach of the articles of association are valid, but the management board members may be held liable for such breach.

It should be also kept in mind that transfer of an enterprise does not entail a universal succession of rights and liabilities related to the enterprise, therefore contractual liabilities connected with the transferred enterprise do not automatically transfer. As a result, if a transaction involving an enterprise includes contracts, effective transfer of the obligations arising under those contracts requires the consent of the other party under each contract.

Moreover, in the case of transactions involving individuals, if a party to the transaction (either the seller or the buyer) is married, the subject of the transaction or the funds applied to the purchase price are part of the joint marital assets of the party and his or her spouse, it is advisable to obtain consent from the spouse. Otherwise, in the case of an asset deal involving an enterprise or real estate property, under the Polish Family and Guardianship Code, the lack of spousal consent may result in the invalidity of the transaction, and, in a share deal, may impede or prevent satisfying claims out of the joint assets of spouses.

Regulatory filings

Must regulatory filings be made or registration (or other official) fees paid to acquire shares in a company, a business or assets in your jurisdiction?

Share purchases of private companies as well as mergers and divisions of companies should be registered in the NCR. Mergers and divisions become effective upon registration, whereas share transfers are effective irrespective of registration. In the case of an asset deal involving real estate, changes in real estate ownership and perpetual usufruct are subject to registration in the Land and Mortgage Register. The transfer of real estate ownership occurs when a notarial deed is signed, whereas the transfer of perpetual usufruct occurs upon the registration of the transfer in the Land and Mortgage Register. Registrations are subject to court and registration fees of usually nominal amounts.