Legislative work on this issue has picked up speed and the draft amendment to the Commercial Company Code was recently published. The groups of companies affected by the reform are listed there.
The New Holding Regulations
Under the proposed amendments, while pursuing its own specific interests, a subsidiary is also guided by the interests of its group of companies and is placed under an obligation not to act to the detriment of any minority shareholders or creditors, explain the Ecovis experts.
A decision on whether to participate in a group of companies is to be made by the shareholders’ meeting/general meeting of a subsidiary, by a qualified majority of votes.
The decision must be disclosed in the relevant register of business entities, both by the subsidiary and the parent company. If the parent company is a foreign company, the relevant registration should be made only in the Polish register.
The most important implication of participating in a group of companies will be the parent company’s power to issue legally binding instructions to subsidiaries. The draft amendment specifies the minimum content of such binding instructions, along with the permissible grounds for the subsidiary refusing to comply.
Additionally, members of the corporate authorities of a subsidiary will be held harmless and indemnified against any loss that may result from their compliance with such binding instructions.
The management board of a subsidiary will be required to include a report on the relationship with the group in its annual report on the subsidiary’s operations.
All capital groups having subsidiaries in Poland should therefore consider the possible consequences of the new holding regulations being introduced. The experts from ECOVIS Legal Poland are monitoring the legislation process and will keep affected companies informed on the introduction of the new regulations.
For further information please contact:
Piotr Pruś, Attorney-at-law, Partner, ECOVIS Legal Poland Pruś and Partners Law Firm, Warszawa, Poland
Email: piotr.prus@ecovis.pl
The New Holding Regulations
Under the proposed amendments, while pursuing its own specific interests, a subsidiary is also guided by the interests of its group of companies and is placed under an obligation not to act to the detriment of any minority shareholders or creditors, explain the Ecovis experts.
A decision on whether to participate in a group of companies is to be made by the shareholders’ meeting/general meeting of a subsidiary, by a qualified majority of votes.
The decision must be disclosed in the relevant register of business entities, both by the subsidiary and the parent company. If the parent company is a foreign company, the relevant registration should be made only in the Polish register.
The most important implication of participating in a group of companies will be the parent company’s power to issue legally binding instructions to subsidiaries. The draft amendment specifies the minimum content of such binding instructions, along with the permissible grounds for the subsidiary refusing to comply.
Additionally, members of the corporate authorities of a subsidiary will be held harmless and indemnified against any loss that may result from their compliance with such binding instructions.
The management board of a subsidiary will be required to include a report on the relationship with the group in its annual report on the subsidiary’s operations.
All capital groups having subsidiaries in Poland should therefore consider the possible consequences of the new holding regulations being introduced. The experts from ECOVIS Legal Poland are monitoring the legislation process and will keep affected companies informed on the introduction of the new regulations.
For further information please contact:
Piotr Pruś, Attorney-at-law, Partner, ECOVIS Legal Poland Pruś and Partners Law Firm, Warszawa, Poland
Email: piotr.prus@ecovis.pl
