Mediation proceedings
During the firm’s ongoing legal support for a Polish limited liability company (spółka z ograniczoną odpowiedzialnością, or sp. z o.o.), while handling a matter involving the company’s claims against one of its subcontractors, the firm identified an ongoing dispute between the client’s shareholders.
The shareholders held equal numbers of shares in the company’s share capital. Their conflict affected the company’s business and gradually paralyzed its internal operations. Lawyers from the firm’s Corporate Law and Corporate Services team arranged a mediation meeting. During several mediation sessions, the shareholders, with support from their lawyers, identified the cause of the dispute and set out possible ways to resolve it.
The meetings led to a settlement between the shareholders, enabling an Extraordinary General Meeting of Shareholders to be held efficiently to approve the sale of some shareholders’ shares to the company for subsequent redemption.
Some of the existing shareholders who wanted to remain in the company did not have sufficient funds. The firm’s lawyers therefore developed and proposed the following solution:
- Shareholders leaving the company transferred their shares to the company for subsequent redemption.
- Because the company did not have enough capital to redeem the shares from pure profit, the proposed solution used a reduction of the company’s share capital to carry out the redemption.
- The company’s entire payment obligation to the departing shareholders for the shares sold was divided into installments. The share sale agreement precisely set out the repayment terms.
The firm prepared draft resolutions for the shareholders’ meeting, analyzing the applicable Polish Commercial Companies Code and the company’s articles of association. It then prepared the necessary agreements for the transfer of shares by some shareholders to the company.
Share capital reduction procedure
After the documents were prepared, the company carried out the share capital reduction by adopting the required shareholders’ meeting resolutions. The firm was also responsible for the next steps: publishing the required announcement in the Court and Commercial Gazette and preparing the applications to the National Court Register (KRS) to report the capital reduction and change in the composition of the shareholders.
These steps resolved the dispute, settled the shareholders leaving the company, and enabled the company to continue operating while protecting the jobs it had created. Attorney Natalia Kaca and attorney Krzysztof Macionczyk handled the matter for the firm. The client is prepared to confirm the information above in a way that protects the confidentiality of the data.
