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Poland

New Polish company law

In January 1999, a new draft of the Law on Companies was published in Poland. Although it has not been yet introduced in the Polish parliament, the draft already indicates the direction of developments in Polish company law. One of the important tasks of the new legislative efforts is to adapt the Polish law to current market requirements and to harmonize the national law with EC legal standards.

Principally, the draft follows the same approach as the Polish Commercial Code and most of its currently binding legal regulations. However, the draft proposes a number of new legal instruments, among them, new types of companies. It also significantly extends the framework of legal regulations in areas which have not been regulated by the Commercial Code. The following are the most significant new elements of the new proposed company law:

A new concept of a company under organization has been introduced. The draft defines this entity as a type of company, not as a type of partnership. A company after its registration is responsible for the liabilities it previously entered into as a company under organisation by operation of law, ie, without the need to specifically assume these liabilities;

Two further new types of companies have been proposed: a registered partnership and a master limited partnership. Registered partnerships are specifically designed for professionals - auditors, lawyers, doctors and architects. The general concept of this type of company is to limit the liability of those partners who are not actually dealing with the clients. Master limited partnerships are also commercial companies and they must have at least two partners, one of which (the general partner) has to assume the liabilities for the partnership. The master limited partnership differs from a civil partnership since it has governing organs (shareholders' meeting, supervisory board) and its own legal identity. It differs from a standard limited partnership since it can issue securities which can be traded in the securities markets. In a way similar to a civil partnership, the master limited partnership is represented by a general partner.

The regulations regarding two of the most important types of companies - limited liability companies and a joint stock companies - have been revised and supplemented. In particular, foreign companies are to gain the right to establish branches with the unlimitedright of conducting business activities in Poland.

The entire area of mergers and acquisitions law has been substantially amended. The proposed changes correspond to the Third EC Company Law Directive. In particular, the draft allows for the merger of various types of companies and between companies and partnerships. The draft provides two possible ways of a merger: (i) through a take-over of one company by the other and (ii) through the formation of a new company.

The new draft law also provides regulations on de-mergers and company-splits. It further covers the transformation of various types of companies into other types, including the transformation of companies into partnerships and vice-versa.

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