What does the company merger process involve?
Under Polish company law, a merger is a formal process involving either the transfer of all assets of one company to another company, known as a merger by acquisition, or the formation of a new company to which the merging companies transfer all their assets, known as a merger by formation of a new company. A merger of this kind usually takes place within a corporate group or between cooperating or related entities.
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When should a company merger be considered?
A merger may be an appropriate response to the following needs: simplifying the structure of a corporate group, consolidating business operations, optimizing business processes, diversifying risks, transferring specific resources from one company to another, or implementing an established growth strategy.
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Which companies can merge?
Mergers most commonly take place between companies with share capital, including limited liability companies, joint-stock companies and simple joint-stock companies. However, a company with share capital may also merge with a partnership. A general partnership, professional partnership or limited partnership cannot act as the acquiring company or the newly incorporated company in a merger process.
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How does the company merger process work?
The first step should be to analyze all companies participating in the merger and determine the legal, tax and accounting implications of the process under Polish law. The relevant documentation is then prepared, including the merger plan, draft amendments to the articles of association or statutes of the acquiring company, or draft articles of association or statutes of the newly incorporated company. The merger also requires the adoption of the relevant merger resolutions and registration with the registry court.
Company merger process: Grant Thornton support
Drawing on many years of experience in carrying out hundreds of projects of this kind, the Grant Thornton team provides support in selecting the appropriate reorganization route within a corporate group. Where a merger-based scenario is chosen, we offer comprehensive legal, tax and accounting advice.
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Comprehensive legal, tax and accounting support in implementing the merger process
Planning and support in carrying out the merger process, including recommendations and practical guidance developed by our experienced experts.
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Thorough analysis and preparation of a written report explaining the implications of the process
As part of the merger process carried out by our experts, we may prepare a written report explaining the merger procedure to shareholders or members of governing bodies, as well as all legal, tax and accounting implications and details of the process. The report serves as a practical guide to the process, while also providing additional reassurance to shareholders and internal teams involved in its implementation.
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Preparation of merger documentation
Our support also includes preparing the documentation required to carry out the process, in particular the merger plan, merger resolutions and the relevant provisions of the companies’ articles of association or statutes.
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Representation in registration proceedings relating to the merger
We represent clients before registry courts throughout Poland. We are responsible for filing the application to register the merger together with all required documentation. We monitor the proceedings and remain in regular contact with the registry court to ensure that the merger is registered on the requested date. This carefully planned approach enables the change to be implemented as smoothly as possible, with minimal disruption to day-to-day business operations. Where required, we also file applications for the appointment of an independent auditor to review the merger plan.
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Ongoing support with post-merger formalities
We provide ongoing support both before and after the formal completion of the merger. We inform clients of their post-merger obligations and assist them in fulfilling these obligations. We also support communications with customers, employees and public institutions.
Company mergers: key facts
- The company merger process usually takes approximately 3 to 5 months, depending on the types of companies involved and whether the various statutory simplifications are available.
- Company mergers are governed by the principle of succession, under which the acquiring company or newly incorporated company assumes all rights and obligations of the acquired company or merging companies as of the merger date. This is one of the features that makes a merger an attractive alternative to other methods of reorganizing businesses and transferring assets between entities.
- Partnerships may also merge with one another, but only by forming a company with share capital or a limited joint-stock partnership, or through acquisition by a limited joint-stock partnership.
- In some merger processes, the merger plan must be reviewed by an independent expert, and the management boards of the merging companies must prepare relevant reports.
Implementation process
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Company analysis, discussion of the client’s needs and process planning
At this stage, we review the client’s business operations. We examine matters such as the company’s assets, employment issues, agreements with customers and suppliers, administrative decisions and permits. Once we have identified the client’s needs, we prepare an implementation plan.
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Process implementation: carrying out the merger
At this stage, we guide the client through all the formalities associated with the merger. We manage the entire process, from liaising with the notary and preparing all the necessary documentation to filing the application with the National Court Register and continuously monitoring the registration of the merger.
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Ongoing consultations during the process and after registration of the merger
We understand that a merger is an organizational challenge for the entire company or group of companies. Our many years of experience allow us to support clients with all ongoing matters related to the reorganization. We also ensure that clients receive guidance on all formalities that must be completed following the merger, acknowledging their specific circumstances.
At this stage, we review the client’s business operations. We examine matters such as the company’s assets, employment issues, agreements with customers and suppliers, administrative decisions and permits. Once we have identified the client’s needs, we prepare an implementation plan.
