On the basis of the amended, with the effect from 1st March 2020, Article 515 of Polish Commercial Companies Code lawyers from Law firm Babiaczyk, Skrocki i Wspólnicy have successfully carried out a merger of two limited liability companies, whose total share capital exceeds 40.000.000 PLN.
The merger was carried out in the form of so called downstream merger, which means the acquisition of the parent company by the subsidiary company. In the doctrine and jurisprudence from before the amendment of the Polish Commercial Companies Code numerous controversies arose as to whether it is possible to merge in such a way without increasing the share capital. However, the recent changes in the regulations have explicitly allowed the acquiring company to issue to the shareholders of the company being acquired own shares of acquired company, which the company acquired as a result of the merger by universal succession. As a result, it is not necessary to issue and subsequently redeem own shares or stocks.
The merger operation is tax-neutral, which is beneficial for the Law Firm’s Client.