On the basis of the amended with effect from March 1, 2020, the provision of Article 515 of the Code of Commercial Companies, the lawyers of Babiaczyk, Skrocki i Wspólnicy law firm successfully carried out a merger of two limited liability companies whose total share capital exceeds PLN 40,000,000.
The merger was carried out in the form of the so-called downstream merger, i.e. the acquisition of the parent company by its subsidiary. In the doctrine and jurisprudence from before the amendment of the Polish Commercial Companies Code numerous controversies arose as to whether it was possible to merge in such a case 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 shares or own shares of the acquiring 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.