Efficient and effective execution of capital companies merger process

Experience / 06.03.2024

A team of attorneys and advocates successfully carried out the process of joint-stock company merger for a Client from the manufacturing industry. Both of the merging companies were limited liability companies, while the merger process itself involved the acquisition of all the assets of one company by the other.

The activities that the law firm carried out in connection with the above procedure included:

  • preliminary legal analysis,
  • preparation of draft documents, including the merger plan with the required appendices,
  • submission of the relevant applications to the Registry Court,
  • ongoing legal advice.

The case was precedent-setting, as it was the first time that the provision of Article 5151 of the Companies Act, introduced by the September 2023 amendment, was applied, which gives the possibility of merging capital companies without granting shares to the acquiring company, in a situation where one partner holds directly or indirectly all the shares of the merging companies, or the partners of the merging companies hold shares in the same proportion in all the merging companies. This further simplified the merger procedure, as the merger plan did not include a description of the exchange ratio of the shares of the target company, as well as eliminated the need to increase the share capital, and thus also dropped the obligation to determine surcharges.

The lawyers of the law firm also recommended taking advantage of the additional simplifications provided for in Articles 516 § 61 and 516 § 7 of the Code of Commercial Companies, in view of which:

  • the merger plan was not subject to mandatory publication in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy), as well as on the websites of the merging companies;
  • the Boards of Directors of the merging companies were exempt from the obligation to prepare a written report justifying the merger, its legal basis and economic justification;
  • the Boards of Directors of each of the merging companies were exempted from the obligation to inform the Boards of Directors of the other companies of any material changes in assets and liabilities that occurred between the date of the merger plan and the date of the adoption of the merger resolution;
  • the merger plan did not require an audit by a certified public accountant.

The experience and knowledge of the law firm’s lawyers allowed the Client to avoid carrying out the costly activities that are normally associated with the procedure in question, such as the cost of the auditor’s opinion and the cost of publishing notices in the Court and Commercial Gazette. In addition, the entire procedure was carried out extremely efficiently and was completed in just over 3 months, which is even faster than the Client expected.