The process of merging companies consists of many stages. The most important of these is the merger date. Using the example of merging by acquisition, under the Polish law, we answer 3 essential questions about this moment.

 

When does a merger of companies takes place?

The merger of companies takes place on the day of entering its in the register of the acquiring company (the merger date)[1]. Just adoption of a merger resolution is not sufficient - it is necessary to report the merger[2] and enter it in the register.

The day of merger of companies is the day on which the merger information is entered in the register of the acquiring company. It is not the day on which the court issues a decision regarding the registration. In practice, these events may not take place on the same day. Example - due to the failure of the KRS system, the data contained in the court decision may be entered into the registry on a different day.

It is important that the entry in the register of the acquiring company is decisive for the effectiveness of the merger. The acquired company only files an application to the National Court Register to enter a note about the adoption of the merger resolution. Consideration of this application and entry of the note do not have a direct impact on the registration and the effect of a merger of companies.

What are the effects of a merger of companies?

 In particular, the main effects of the merger are:

The merger of companies may also cause numerous consequences, including obligations on accounting and tax grounds (depending on the method adopted for merger process).

The date of the merger of the companies is also significant due to the so-called post-merger obligations, for which the deadlines are set by this day.

However, the detailed effects of the merger should be evaluated individually in relation to a specific process. It is worth analyzing these effects at the planning stage of the entire process.

What happens to the acquired companies?

 The entry of the merger of companies has the effect of deleting the acquired company from the KRS[3]. In practice, the information on deletion may appear in the register days or even weeks after the entry of the merger. However, in this case it is only a declaratory entry.

Deletion of the acquired company from the KRS cannot take place before the merger is registered, nor before the registration of an increase in share capital in the acquiring company - provided that such an increase occurs in the course of the merger[4].

In practice, the entry of the merger and the increase in share capital occur at the same moment - based on the same court decision. At that moment, the shareholders of the acquired company become shareholders of the acquiring company and get the newly created shares in the share capital of the acquiring company.

 

The day of merger is just the beginning

The day of merger of the companies is the culmination moment of the merger process. However, it is not its last stage. After the merger of the companies, there are numerous obligations that have to be fulfilled as so-called post-merger obligations. In practice, these obligations depend on the individual situation of the merging companies.

Each merger process requires an individual approach. If you have any questions in this regard, we encourage you to contact us.

 

****

[1] Article 493 § 2 of the Commercial Companies Code

[2] National Court Register

[3] Article 493 § 2 of the Commercial Companies Code

[4] Article 493 § 3 of the Commercial Companies Code