{"id":3994,"date":"2023-01-16T08:45:11","date_gmt":"2023-01-16T08:45:11","guid":{"rendered":"https:\/\/sawaryn.com\/?p=3994"},"modified":"2026-10-22T12:14:56","modified_gmt":"2026-10-22T12:14:56","slug":"polish-holding-law-minority-buyouts-audit","status":"publish","type":"post","link":"https:\/\/sawaryn.com\/en\/publikacje\/polish-holding-law-minority-buyouts-audit\/","title":{"rendered":"Polish Holding Law: Buyouts of Minority Shareholders\u2019 Interests or Shares and Other Changes"},"content":{"rendered":"<p>Since October 2022, rules have governed relations between parent companies and subsidiaries in corporate groups. The main change is that a parent company may demand the <a href=\"https:\/\/sawaryn.com\/en\/publikacje\/polish-holding-law-minority-buyouts-audit\/\"><strong>compulsory buyout of minority shareholders&#8217; interests<\/strong><\/a>, including in a Polish limited liability company, not only a joint-stock company. Minority shareholders also gained the right to demand a <a href=\"https:\/\/sawaryn.com\/publikacje\/prawo-holdingowe-wykup-udzialow-lub-akcji-wspolnika-mniejszosciowego\/\"><strong>buyout of their own interests<\/strong><\/a> and the right to request an audit of the corporate group.<\/p>\n<h2>What the October 2022 holding-law rules changed<\/h2>\n<p>The <a href=\"https:\/\/sawaryn.com\/publikacje\/prawo-holdingowe-nowe-przepisy-dla-spolek\/\"><strong>amendment to the Polish Commercial Companies Code<\/strong><\/a> covered three areas concerning minority shareholders:<\/p>\n<ul>\n<li><strong>Squeeze-out<\/strong>: the parent company&#8217;s right to compel the purchase of minority shareholders&#8217; interests or shares in a subsidiary.<\/li>\n<li><strong>Sell-out<\/strong>: a minority shareholder&#8217;s right to demand that their interests or shares be bought out.<\/li>\n<li><strong>Right to an audit<\/strong>: the possibility of asking a court to order an examination of the accounting and operations of a corporate group.<\/li>\n<\/ul>\n<p>Previously, squeeze-out and sell-out rights applied only to joint-stock companies. They now also apply to <a href=\"https:\/\/sawaryn.com\/en\/publications\/a-limited-liability-company-the-most-important-information\/\"><strong>Polish limited liability companies (sp. z o.o.)<\/strong><\/a>.<\/p>\n<h2>Squeeze-out: compulsory buyout of minority shareholders&#8217; interests<\/h2>\n<h3>What a squeeze-out means<\/h3>\n<p>A squeeze-out is the right to demand the compulsory purchase of minority shareholders&#8217; interests or shares in a subsidiary. The parent company may require the subsidiary to buy those interests on the parent company&#8217;s account.<\/p>\n<h3>Conditions for a squeeze-out after the amendment<\/h3>\n<ul>\n<li>The parent company must hold <strong>at least 90% of the subsidiary&#8217;s share capital<\/strong>.<\/li>\n<li>The shareholders&#8217; meeting (or general meeting) adopts a resolution for the compulsory buyout of interests or shares held by shareholders representing <strong>no more than 10% of the share capital<\/strong>.<\/li>\n<li>The rule now also applies to <strong>Polish limited liability companies<\/strong>, not only joint-stock companies.<\/li>\n<\/ul>\n<h3>Lowering the threshold in the company&#8217;s articles<\/h3>\n<p>The company&#8217;s articles (or statute) may provide for less restrictive buyout conditions:<\/p>\n<ul>\n<li>The threshold may be lowered below 90% of the share capital.<\/li>\n<li>The lowest permitted threshold is <strong>75% of the share capital<\/strong>. It cannot be lowered further.<\/li>\n<\/ul>\n<h3>How squeeze-out worked before the change<\/h3>\n<p>Before the amendment, squeeze-out applied only to joint-stock companies and required:<\/p>\n<ul>\n<li>Shareholders seeking the buyout to hold at least <strong>95% of the share capital collectively<\/strong>.<\/li>\n<li>The buyout to concern shares held by <strong>no more than five minority shareholders<\/strong>, who together held no more than 5% of the capital.<\/li>\n<\/ul>\n<h2>Sell-out: a minority shareholder&#8217;s right to demand a buyout<\/h2>\n<h3>What sell-out gives a minority shareholder<\/h3>\n<p>Sell-out is the reverse of a squeeze-out: a minority shareholder themselves demands that the company buy their interests or shares. Before the amendment, this right belonged only to shareholders in joint-stock companies. It now also covers shareholders in Polish limited liability companies.<\/p>\n<h3>When sell-out is available<\/h3>\n<p>Sell-out applies in subsidiaries participating in a corporate group where the parent company holds <strong>at least 90% of the interests or shares<\/strong>. The parent company may meet the required ownership threshold in either of these ways:<\/p>\n<ul>\n<li><strong>Directly<\/strong>, through its own interests or shares.<\/li>\n<li><strong>Indirectly<\/strong>, through other entities or under arrangements with other persons.<\/li>\n<\/ul>\n<h3>How to request a buyout<\/h3>\n<ol>\n<li>Minority shareholders representing <strong>no more than 10% of the share capital<\/strong> request that the buyout be placed on the agenda of the next shareholders&#8217; meeting.<\/li>\n<li>This right may be exercised <strong>no more than once in a financial year<\/strong>.<\/li>\n<li>The earliest possible date is <strong>three months after the company&#8217;s participation in the corporate group is disclosed in the National Court Register (KRS)<\/strong>.<\/li>\n<\/ol>\n<h3>One-time buyout request when a corporate group is formed<\/h3>\n<p>A shareholder who <strong>voted against the resolution<\/strong> to form a corporate group may make a one-time request for the buyout of their interests or shares. The conditions are:<\/p>\n<ul>\n<li>Deadline: <strong>one month from the date the resolution forming the group is adopted<\/strong>.<\/li>\n<li>The shareholder&#8217;s share in the capital <strong>does not matter<\/strong>: the request is available regardless of the number of interests held.<\/li>\n<\/ul>\n<h3>Sell-out when the rules for binding instructions change<\/h3>\n<p>Sell-out is also available if minority shareholders do not consent to adding provisions to the company&#8217;s articles (or statute) concerning <strong>refusal to follow a binding instruction<\/strong>. In this case as well, the shareholder&#8217;s share in the capital does not matter.<\/p>\n<h2>The right to request an audit of a corporate group<\/h2>\n<h3>Who may request an audit<\/h3>\n<p>Shareholders of a subsidiary participating in a corporate group may request an audit if they represent <strong>at least one-tenth of the share capital<\/strong>.<\/p>\n<h3>What the audit covers<\/h3>\n<p>The registry court appoints an audit firm to examine:<\/p>\n<ul>\n<li>The accounting of the corporate group.<\/li>\n<li>The operations of the corporate group as a whole.<\/li>\n<\/ul>\n<h3>Who bears the cost of the audit<\/h3>\n<ul>\n<li>The audit is paid for by <strong>the shareholder who submitted the request<\/strong>.<\/li>\n<li>The company reimburses the cost only if the audit <strong>reveals abuse or actions detrimental<\/strong> to the company.<\/li>\n<\/ul>\n<h2>What to check in your company<\/h2>\n<p>If your company operates in a <a href=\"https:\/\/sawaryn.com\/en\/?p=3978\"><strong>corporate group<\/strong><\/a>, as either a parent or subsidiary, check the following:<\/p>\n<ol>\n<li><strong>Check the ownership structure<\/strong>: does the parent hold at least 90% (or 75%, if the articles provide for that lower threshold) of the subsidiary&#8217;s share capital?<\/li>\n<li><strong>Review the company&#8217;s articles or statute<\/strong>: do they lower the squeeze-out threshold and set out the rules for refusing a binding instruction?<\/li>\n<li><strong>Check the KRS entry<\/strong>: the deadlines for sell-out run from the date the company&#8217;s participation in the corporate group is disclosed.<\/li>\n<li><strong>Assess squeeze-out risk<\/strong>: if you are a minority shareholder, check whether the parent meets the thresholds for a compulsory buyout.<\/li>\n<li><strong>Consider whether to request an audit<\/strong>: if you have concerns about the group&#8217;s conduct, check whether you represent the required one-tenth of the share capital.<\/li>\n<li><strong>Check the deadlines<\/strong>: the one-time buyout request after a corporate group is formed expires one month after the resolution is adopted. Do not miss this period.<\/li>\n<\/ol>\n<h2>Frequently asked questions<\/h2>\n<p><strong>What is a squeeze-out in a corporate group, and when may the parent compel a buyout of minority shareholders&#8217; interests?<\/strong> A squeeze-out is the parent company&#8217;s right to demand the compulsory purchase of minority shareholders&#8217; interests or shares in a subsidiary, on the parent company&#8217;s account. The parent must hold at least 90% of the subsidiary&#8217;s share capital, and the buyout concerns shareholders representing no more than 10% of the capital. The company&#8217;s articles may lower the threshold, but not below 75% of the share capital.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>When may a minority shareholder in a subsidiary demand that their interests be bought out?<\/strong> A minority shareholder may demand a buyout when the parent holds at least 90% of the interests or shares in the subsidiary. This right may be exercised no more than once in a financial year, and no earlier than three months after the company&#8217;s participation in the corporate group is disclosed in the KRS. Separately, a shareholder who voted against the resolution forming the group may make a one-time buyout request within one month of the resolution, regardless of the number of interests held. Sell-out is also available if minority shareholders do not consent to adding provisions to the company&#8217;s articles concerning refusal to follow a binding instruction.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>What is the difference between squeeze-out and sell-out under the holding-law changes?<\/strong> A squeeze-out is initiated by the parent company, which demands the compulsory purchase of minority shareholders&#8217; interests in a subsidiary acting in its interests as an owner. A sell-out works in the opposite direction: the minority shareholder demands that the company buy their interests or shares. This is a protective mechanism that allows the shareholder to leave the company. Since October 2022, both mechanisms have applied not only to joint-stock companies but also to Polish limited liability companies.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Who may request an audit of a corporate group, and who pays for it?<\/strong> Shareholders of a subsidiary participating in a corporate group may request an audit if they represent at least one-tenth of the share capital. The requesting shareholder pays for the audit. The company reimburses the cost only if the audit reveals abuse or actions detrimental to the company.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Which deadlines and thresholds should a company check after the holding-law rules took effect?<\/strong> Check whether the parent holds at least 90% of the subsidiary&#8217;s share capital, or 75% if the company&#8217;s articles lower the threshold. This affects whether squeeze-out and sell-out are available. Verify the date on which the company&#8217;s participation in the corporate group was entered in the KRS, because the three-month period for a sell-out request and the one-month period for a one-time buyout request after the group is formed are counted from that date. Also review the company&#8217;s articles for provisions lowering the squeeze-out threshold and rules on refusing a binding instruction.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In October 2022, new rules known as holding law entered into force. The legislature introduced rules governing relations between parent and subsidiary companies. If you want to learn what the holding-law amendment covers, read the article below.<\/p>\n","protected":false},"author":10,"featured_media":1909,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","sip_alt_url":"","sip_en_pl_url":"","sip_pair_uuid":"","sip_pair_state":""},"categories":[1579],"tags":[1556],"specialization":[1213],"practice_area":[],"class_list":["post-3994","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-law","tag-corporate-law","specialization-corporate-law"],"acf":[],"_links":{"self":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts\/3994","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/comments?post=3994"}],"version-history":[{"count":1,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts\/3994\/revisions"}],"predecessor-version":[{"id":4052,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/posts\/3994\/revisions\/4052"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/media\/1909"}],"wp:attachment":[{"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/media?parent=3994"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/categories?post=3994"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/tags?post=3994"},{"taxonomy":"specialization","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/specialization?post=3994"},{"taxonomy":"practice_area","embeddable":true,"href":"https:\/\/sawaryn.com\/en\/wp-json\/wp\/v2\/practice_area?post=3994"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}