Transformation into Joint Stock Company in Poland
Transforming a limited liability company into a joint-stock company in Poland seems attractive given the later possibility of raising capital by way of a public issue of shares.
It should be noted, however, that not every limited liability company in Poland may be transformed - it is not possible to transform a company that is being liquidated, that has begun the division of its assets or a company in bankruptcy. As of the date of the adoption of a resolution on the transformation of the company, a transformed company shall have the approved balance sheets for the past two years, or, if its activity was conducted for a shorter period of time, for the whole period of activity not covered in the annual balance sheet.
A transformation of a company in Poland is initiated by drawing up of draft terms of transformation ("the Plan") at the general shareholders' meeting, an essential part of which shall be the balance sheet value of the assets of the company being transformed as at a certain date in the month preceding submission of "the Plan" to the shareholders, which, together with the attachments, shall be subject to examination by an appointed by the court (at the general meeting's request) auditor for their correctness and reliability.
After obtaining the opinion, the company shall twice notify the shareholders of the intention to adopt a resolution on the transformation of the company within the terms referred to in art. 560 Polish Commercial Company Code and shall convene the general meeting to adopt a resolution on the subject matter. The notification shall include essential provisions of the Plan and the opinion of an auditor, material provisions of the draft terms of transformation and the statutes as well as the venue and time (not shorter than two weeks prior to the proposed date of adoption of a resolution on transformation) at which the shareholders of the company being transformed may review a full version of the Plan and attachments, as well as the opinion of the auditor.
The general shareholders' meeting shall adopt resolutions on the transformation of the company in Poland, adoption of the statutes as well as the constitution of the governing bodies of the joint-stock company. The resolution on transformation (in a form of a notarial deed) shall, among others, stipulate the share capital (not to be lower than the share capital of the transformed company), the rights granted personally to the shareholders participating in a transformed company (if applicable), the amount designated for payment to the shareholders who do not participate in a transformed company (not to be greater than 10% of the balance sheet value of the assets of the company), the surnames and first names of the members of the management board of a joint-stock company as well as the consent to the wording of the statutes of a transformed company.
The resolution shall be adopted by shareholders representing at least ½ of the share capital, with a majority of ¾ of the votes, unless the resolution stipulates higher thresholds). After adopting the resolution of the transformation, the management board is obligated to summon the shareholders who have not made such declarations on the date of adoption of the resolution to submit such declarations within one month of the date of adoption of a resolution on the transformation of the company. A shareholder who has not declared that he wished to participate in the transformed company, shall have a claim for payment of an amount representing his shares or his in-kind contributions (if made).
After adoption of applicable resolutions and submission of shareholders' declarations, all members of the joint-stock company management board sign and submit an application for registration of the transformation in the register with the NRC, including documents and declarations required in the application for registration of the joint-stock company in the register.
Transformation is finalized with the registration of the joint-stock company and deletion of the limited liability company from the register.
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