{"id":3103,"date":"2026-10-27T13:26:11","date_gmt":"2026-10-27T13:26:11","guid":{"rendered":"https:\/\/sawaryn.com\/us\/merge-two-polish-limited-liability-companies\/"},"modified":"2026-10-27T13:26:11","modified_gmt":"2026-10-27T13:26:11","slug":"merge-two-polish-limited-liability-companies","status":"publish","type":"post","link":"https:\/\/sawaryn.com\/us\/merge-two-polish-limited-liability-companies\/","title":{"rendered":"Merging Two Polish Limited Liability Companies: A Step-by-Step Guide"},"content":{"rendered":"

Running two Polish limited liability companies (sp\u00f3\u0142ki z ograniczon\u0105 odpowiedzialno\u015bci\u0105<\/em>, or sp. z o.o.<\/em>) can mean two sets of accounts, two entries in the National Court Register (Krajowy Rejestr S\u0105dowy<\/em>, or KRS<\/strong>), two annual financial statements and duplicated administration. Founders often establish separate companies for different products, business lines or markets. Over time, the cost of maintaining that structure may outweigh its benefits.<\/p>\n

A simplified merger<\/strong> can reduce the paperwork and remove the need for an auditor\u2019s review. But the shareholding structure matters. If the company to be acquired still has minority shareholders, their shares may need to be bought out or redeemed before the most streamlined route is available. That preparatory work can expose three issues: the company\u2019s articles do not permit redemption, it lacks sufficient retained earnings, or the proposed redemption price creates tax risk.<\/p>\n

This guide covers those preparations, the merger procedure, employment and contract issues, indicative costs, and the work that remains after the merger is registered.<\/p>\n

Key Polish terms<\/h2>\n\n\n\n\n\n\n\n\n\n\n
Term<\/th>\nWhat it means in this process<\/th>\n<\/tr>\n<\/thead>\n
Merger by acquisition<\/strong><\/td>\nOne company absorbs another. The acquired company ceases to exist and is removed from the KRS without liquidation<\/a>.<\/td>\n<\/tr>\n
Simplified merger \u2014 Article 516 of the Commercial Companies Code<\/strong><\/td>\nA merger route available under specified ownership structures, including where the acquiring company holds at least 90% or all of the acquired company\u2019s shares. It removes the auditor\u2019s review and reduces other formalities.<\/td>\n<\/tr>\n
Universal succession \u2014 Article 494 of the Commercial Companies Code<\/strong><\/td>\nWhen the merger is entered in the KRS, the acquiring company takes over all<\/strong> rights and obligations of the acquired company, including those relating to contracts, employees, registrations and real estate.<\/td>\n<\/tr>\n
Share redemption \u2014 Article 199 of the Commercial Companies Code<\/strong><\/td>\nThe legal cancellation of shares. Once their shares have been redeemed, minority shareholders no longer hold them or remain shareholders on that basis.<\/td>\n<\/tr>\n
Redemption from distributable profits<\/strong><\/td>\nRedemption funded from retained earnings, without reducing share capital. This is generally the faster, simpler route described here.<\/td>\n<\/tr>\n
Change-of-control clause<\/strong><\/td>\nA contractual provision that may allow a counterparty to terminate or renegotiate an agreement following a change in the other party\u2019s ownership structure.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

When can you use a simplified merger?<\/h2>\n

Article 516 of the Polish Commercial Companies Code governs simplified mergers. The procedure discussed here applies to a merger by acquisition<\/strong>, not a merger that creates a new company.<\/p>\n

The main variants are:<\/p>\n\n\n\n\n\n\n\n\n
Variant<\/th>\nOwnership condition<\/th>\nFormalities that fall away<\/th>\n<\/tr>\n<\/thead>\n
100% ownership \u2014 Article 516 \u00a76<\/strong><\/td>\nThe acquiring company holds all shares in the acquired company.<\/td>\nAuditor\u2019s review, management board reports, a merger resolution in the acquired company and a share exchange ratio.<\/td>\n<\/tr>\n
At least 90% ownership \u2014 Article 516 \u00a7\u00a71\u20135<\/strong><\/td>\nThe acquiring company holds at least 90% of the acquired company\u2019s share capital.<\/td>\nAuditor\u2019s review, management board reports and a merger resolution in the acquiring company. A shareholder holding 1\/20 of its share capital may, however, request a shareholders\u2019 meeting.<\/td>\n<\/tr>\n
One shareholder in both companies \u2014 Articles 515\u00b9 and 516<\/strong><\/td>\nOne shareholder directly or indirectly holds all shares in both companies.<\/td>\nA share capital increase, a share exchange ratio and management board reports.<\/td>\n<\/tr>\n
Natural-person shareholders only \u2014 Article 516 \u00a77<\/strong><\/td>\nAll shareholders of all merging companies are individuals, no more than 10 in total.<\/td>\nPublication of the merger plan and an auditor\u2019s review. A single shareholder objection prevents use of this simplified route.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The 100% ownership variant<\/strong> offers the most simplifications. The acquiring company does not need to issue new shares, establish an exchange ratio or increase its share capital; the acquired company does not need to pass a merger resolution.<\/p>\n

If former co-founders or other minority investors still hold shares in the company to be acquired, those shares must first be bought out<\/a> or redeemed to reach 100% ownership. Share redemption is therefore often the first stage of the project.<\/p>\n

Preparing the shareholding structure: redeeming minority shares<\/h2>\n

Check three conditions before you start<\/h3>\n
    \n
  1. \n

    The articles of association must permit redemption.<\/strong> Review the current consolidated articles of the company to be acquired. If they contain no redemption provision, the company must first amend its articles<\/a> before a notary. The source estimates that this adds 2\u20134 weeks<\/strong> and further notarial costs.<\/p>\n<\/li>\n

  2. \n

    There must be enough retained earnings to fund redemption from distributable profits.<\/strong> This route avoids a reduction in share capital. Ask the accounting team for an up-to-date breakdown of equity and confirmation that retained earnings are sufficient to pay the agreed consideration.<\/p>\n<\/li>\n

  3. \n

    The affected shareholders must consent if redemption is voluntary.<\/strong> Voluntary redemption involves a shareholder transferring shares to the company so that the company can cancel them. It requires both a shareholders\u2019 meeting resolution and the consent of the shareholder whose shares are being redeemed.<\/p>\n<\/li>\n<\/ol>\n

    If retained earnings are insufficient<\/h3>\n

    The alternative described in the source is redemption combined with a reduction in share capital<\/strong>. It takes longer. Among other steps, creditors have three months<\/strong> to object to the reduction under the creditor notification procedure. The reduction must then be filed with the KRS within six months of the resolution<\/strong>.<\/p>\n

    The company\u2019s share capital cannot fall below PLN 5,000<\/strong>, and the nominal value of an individual share cannot fall below PLN 50<\/strong>.<\/p>\n

    Assess the tax risk before agreeing on a price<\/h3>\n

    Redeeming shares at nominal value\u2014for example, PLN 50 per share\u2014may attract tax authority scrutiny if the company\u2019s market value is much higher.<\/p>\n