The last article describing the merger by acquisition concerns third the phases of this process, namely the so-called authorisation phase.
It stands out three model phases of the merger procedure:
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Phase of preparatory activities carried out by the boards of merging companies (Article 498-505 k.s.h.), so-called management phase.
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Phase of resolutions of the meetings of the shareholders of the merging companies (Article 506 k.s.h.), so-called ownership phase.
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Registration and announcement phase of the call (Article 507-508 k.s.h. in conjunction with Article 493(2-5) k.s.h.), the so-called authorisation phase of the merger by public authorities.
We wrote about the management phase HERE , while about the ownership phase HERE .
Today we're going to look at how it goes. third the phase as well as describing the effects of this method of merger. The registration and publication phase is the final stage of the merger procedure.
Application of resolutions to court and announcement of merger
The obligation to apply to the registered court the merger resolution shall lie with each of the merging companies. These activities should be carried out by the Management Board of each company.
According to Article 507 k.s.h. the management of each of the merging companies should submit to the register court a resolution on the merger of the company in order to enter in the register a reference to such a resolution indicating whether the merging company is the acquiring company or the acquired company.
Where the registered offices of the competent registry courts are situated in different localities, the registered office of the acquiring company or the newly established company shall immediately inform the registered office of the acquiring company.
The registered office of the company being acquired shall forward the documents of the company being removed from the register for storage to the registered office of the acquiring company.
Article 508 k.s.h. provides that the merger notice shall be made at the request of the acquiring company.
Notice of merger of companies may be made (see the Court and Economic Monitor) at the earliest on the day following the date of merger within the meaning of Article 493, the announcement is to inform that the merger has already taken place.
Failure to comply with the notice is not the basis for bringing an action for repeal of the resolution (Article 249(422) k.s.h.) and action for annulment (Article 252(425) k.s.h.), because they do not concern a resolution, but a different obligation. Under Article 508 k.s.h.
the content of the notice has not been specified, but it should be assumed that the notice should contain the individualising data of the merged or acquired companies, together with the designation of their respective registered courts and the National Court Register numbers, the individualising data of the acquiring company and the data on the entry of the merger (the indication of the court which entered the merger in the register, date and signature of the order and entry).
According to Article 493(1) k.s.h. the company is dissolved without carrying out winding-up proceedings on the date of removal from the register. It is stressed that the requirement to carry out liquidation of the acquired company does not make sense in the light of the continuation of the legal existence of such a company within the acquiring company.
The connection follows – according to Article 493(2) k.s.h. – as from the date of entry of the merger in the relevant register according to the registered office of the acquiring company. This entry shall result in the deletion of the acquired company.
The adoption of the merger resolution by the companies is at the same time an indication of the dissolution of the company in question under Article 270(4) and under Article 459(4) k.s.h., i.e. This constitutes ‘another reason provided for by law’.
At the same time, the acquired company may not be removed from the register before the date of registration of the increase in the share capital of the acquiring company, if such increase is to take place and at the same time cannot occur before the date of entry of the merger in the relevant register according to the registered office of the receiving company. It should therefore be stressed that the inclusion of a connection in the register results in Next, the removal of the acquired company, such operations may not take place in the opposite order.
Requested merger procedure - reference
Content Article 515 k.s.h. the merger may be carried out without an increase in the share capital if the acquiring company has shares or shares of the company being acquired or shares acquired, in accordance with the regulations Article 200 or Article 362 kr.h. and in the cases referred to under Article 366 k.s.h.
Content Article 515(1) k.s.h. it follows that, where the acquiring company owns the shares of the acquiring company, an increase in the share capital of the acquiring company is optional. Article 515(2) k.s.h.
also includes the authorisation for the acquiring company to acquire its own shares or shares in order to release them to the shareholders of the acquired company. The maximum total nominal value of shares or shares shall not exceed 10% the share capital of the acquiring company.
However, it should be pointed out that if the value of the shares or shares of the acquiring company proves insufficient for the exercise of the rights of the shareholders of the acquired company, the acquiring company will have to increase its share capital with a missing amount while releasing its own shares or shares held or acquired under the terms of Article 515(1)(3) k.s.h.
A simplified merger procedure is also possible in the case of mergers of limited liability companies whose sole shareholders are natural persons of no more than 10 persons (Article 516(7) k.s.h.).
Legal effects of the merger by acquisition
The main effects of the merger are:
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Universal success of the rights and obligations of the company to be acquired (Article 493(1) (k.s.h.)
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Administrative success of the transfer to the acquiring company is subject to a concession, authorisation and relief granted to a company acquired or merged by the new company, unless the law or decision granting the authorisation, concession or concession provides otherwise (Article 494(2) (k.s.h.)
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Deletion of the company taken over without carrying out liquidation proceedings (Article 493(1) (k.s.h.)
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The shareholders of the acquired company become shareholders of the acquiring company (Article 494(4) (k.s.h.)
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Members of the boards of merging companies are liable for damage caused during the merger procedure (Article 512 k.s.h.)
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Separate management of the assets of each company until the date on which the creditors are satisfied or secured and who are before expiry six months from the date of notification of the merger they requested payment in writing Article 495 k.s.h.)
The acquiring company will enter into all the rights and obligations of the acquired company on the date of merger.
In particular, the acquiring company shall be transferred from the date of the merger of the licence, concessions and reductions granted to the acquired company, unless the law or decision granting the licence, concession or concession provides otherwise.
The disclosure in the perpetual books or registers of the transfer to the acquiring company of the rights disclosed in those books or registers shall take place at the request of that company.
The shareholders of the acquired company will become shareholders of the acquiring company on the date of merger
According to Article 512 k.s.h. members of the board, supervisory board or review committee and liquidators of both merging companies for damage caused by an act or omission contrary to the law or provisions of the contract or the articles of association, unless they are not guilty.
To safeguard the interests of creditors were introduced two provisions: Article 495(496))) k.s.h. Article 495 k.s.h.
provides that the assets of each of the combined companies should be managed by the acquiring company or the newly bound company separately, until the date on which the creditors whose claims arose before the date of merger and who before the expiry of the six months from the date of notification of the merger they requested payment in writing.
The separate management of the assets of the companies which took part in the merger means that the activities related to the conduct of property matters linked to the assets of the various companies should be separated. Management should mean the administration of assets, supervision and care of assets and representation activities.
In turn, according to Article 496 k.s.h. in the period of separate management of the company's assets to the creditors of each company, priority shall be given to the satisfaction of the assets of its original debtor from the creditors of the remaining merging companies.
Creditors of the merging company who made their claims within the time limit six months from the date of the notification of the merger and the claim that their satisfaction is threatened by the merger, they may require that the court having jurisdiction according to the registered office of the acquiring company or the newly bound company provide them with adequate safeguards for their claims if such a security has not been established by the merging acquiring company or the newly bound company.
Impact of the merger on employment relations
In terms of employment relations at the merger, the effect of a change of employer is automatic, without the need to sign new contracts with employees.
In accordance with the procedure laid down in the Labour Code Article 231), the current and new employer is obliged to inform employees in writing of the expected date of the transition of the establishment, i.e.
the organised part of the company and, inter alia, its causes, legal, economic and social consequences for workers, at least on 30 the days before the expected date of transition of the establishment.
Within time 2 months after the passing of the establishment, the worker may terminate the employment relationship without notice, for a seven-day prejudice.
The employer on the day of the acquisition of the establishment or part of it, is obliged to propose new working conditions and salaries to employees providing work on a different basis than the employment contract.
Author:
Aleksandra Księżyk – Legal advisor, Director of the Legal Department in Warsaw Chancellery Russell Bedford Dmowski and Partners Law Firm sp. k.