The amendment to the Act on the formation of the agricultural system and its impact on joint-stock companies

On October 5, 2023, an amendment to the Act ( Dz.U. 2023 item 1933) on the shaping of the agricultural system, introduced by the Act of July 13, 2023 on amending the Act on the management of agricultural property of the State Treasury and other acts, entered into force.

The amendment mainly changed the definition of agricultural real estate. Currently, the law does not apply to agricultural real estate where the area of agricultural land is less than 0.3 hectares. Previously, agricultural real estate within the meaning of the Act was considered to be real estate within the meaning of the land registry with a total area of more than 0.3 hectares, even if the agricultural use of the property was less than 0.3 hectares.
As a result of the amendment, Article 3a of the Law on Formation of the Agricultural System was also amended, extending the National Support Centre for Agriculture’s (NSCA) right of first refusal to purchase shares in:

• a joint-stock company within the meaning of Article 4 § 1 item 2 of the Commercial Companies Code (CCC), which is the owner or perpetual usufructuary of an agricultural property with an area of at least 5 ha, or agricultural properties with a total area of at least 5 ha;
• in a parent company within the meaning of Article 4 § 1 item 4 of the CCC, which holds shares in a company that owns or is a perpetual usufructuary of agricultural real estate with an area of at least 5 hectares or agricultural real estate with a total area of at least 5 hectares.

The NSCA will be able to exercise its authority for a period of two months. During this period, it will not be possible to effectively transfer shares or stocks in the company, which in practice means that any contract concluded in violation of the NSCA’s preemptive right will be invalid. The law provides one exception to this rule. The NSCA will not be entitled to the right of first refusal in the situation of acquisition of shares and stocks for the purpose of their redemption.

The obligation to notify the NSCA of a parent company’s share capital increase with respect to a company that is the owner or perpetual usufructuary of an agricultural property with an area of at least 5 hectares, or an agricultural property with a total area of at least 5 hectares, has also been expanded. As before, the company will be required to submit the notice after the increase is entered in the register of entrepreneurs.