The Polish legislature decided to regulate the "right of groups of companies" only to a minimum extent. It is often stressed that Article 4(1)(4), Article 6 and Article 7 KSH is the most necessary to standardise relations in the field of dominance and dependence.
In this article I will try to answer questions when a company is a parent company, what obligations a company has depending on and what are the consequences of their non-compliance.
Definition of the parent company
Under the Commercial Companies Code, the parent company is a commercial company where:
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- have directly or indirectly a majority of the members' meeting or general meeting (also as a pledge or user), or on the board of another capital company;
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- is entitled to appoint or dismiss a majority of the members of the management board of another capital company;
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- is entitled to appoint or dismiss a majority of the members of the supervisory board of another capital company;
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- the members of its Management Board shall be more than half the members of the Management Board of another capital company;
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- hold directly or indirectly a majority of the votes in a personal company;
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- has a decisive influence on the activities of the subsidiary, in particular on the basis of the contracts laid down in Article 7 KSH (contracts providing for the management or transfer of profits by a subsidiary).
In practice, there may be a situation where two the companies have a majority at their meetings. A parent company is then considered to have a higher percentage of the vote in the meeting second the company (subsidiary).
Where each of the commercial companies holds an equal percentage of the vote at the meeting second the company, whether or not there is a dominant relationship, is determined by the fact that it has an influence on the subsidiary also on the basis of another link described in point 2-6 above.
Therefore, where each of the commercial companies holds an equal percentage of the vote at the meeting second the company, the parent company will be a company which (for example) is entitled to appoint the majority of the members of the bodies second companies.
However, there may be a situation that two the companies have a majority at their meetings at the same time have the same effect on each other on the basis of another link. In such a case, the parent company shall be considered to have an influence on that company. second the company on the basis of more links. If, on the basis of the above rules, it is also impossible to determine which of the companies is the parent company and which subsidiary is considered to be the parent company and the subsidiary company.
The determination of the relationship of dominance and dependency may therefore require careful examination of the provisions of the KSH and of the contracts / statutes of companies.
Obligation to obtain authorisation to act
Although the relationship of dominance and dependency concerns commercial (personal and capital) and cooperative companies, the obligation to obtain the consent referred to below applies only to capital companies.
According to Article 15(1) KSH concluding a loan, loan, guarantee or other similar agreement by a capital company with a member of the board, supervisory board, review committee, proxy, liquidator or to any of these persons requires the consent of a meeting of shareholders or a general meeting of the company. According to section 2 the provision in question in the case of companies in relation to which they are dependent shall entail an additional obligation to obtain the consent of the meeting of shareholders or of the general meeting of the parent company.
In practice, this means that a member of the board of directors of the parent company will require a loan with a subsidiary to be made available to the assembly of shareholders or to the general meeting of the parent company for approval. For the sake of order, it should be pointed out that the obligation to obtain consent concerns all contracts to which the substance belongs either the transfer of funds from the subsidiary to the assets of persons indicated in the provision (in the parent company) or to those which they secure against persons third the obligations of those persons.
Consequences of not obtaining the consent of the parent company
Article 17(1) KSH makes it clear that if the law requires the approval of the relevant authority to carry out a legal act by the company, the legal act carried out without the required resolution is invalid. Therefore, the lack of the agreement described in the preceding subparagraph will result in no effect. That's right.
17 section 2 KSH provides an opportunity to confirm such action (confirmation has retroactive effect since the legal act was carried out), but only the authority has the power to do so 2 months after the operation.