Legislative work is ongoing in the Sejm on a bill amending the Commercial Companies Code[1] to introduce elements of holding company law into the Polish legal system. If the new rules are enacted, this could have a major effect on how companies in international capital grounds operate.

A government proposal to amend the Commercial Companies Code was submitted to the Sejm in August 2021. The principal aim of the legislation is to regulate in part the rules for operation of de facto holding companies, i.e. groups of companies that in fact are linked (for example through capital affiliation), but between which there is no agreement on management or profit-sharing. The scope of the legislation is determined in this way due to the minimal significance of holding company agreements in the true reality of commerce.

The envisaged legislation creates a formal framework for a coherent policy for managing and coordinating commercial strategy within a capital group. The main instrument used to achieve this objective is intended to be binding instructions that a dominant company can issue to a subsidiary. The proposal also provides for instance for the option for the dominant company to obtain information about the subsidiary’s operations and for the dominant company’s supervisory board to perform oversight.

Coordination of commercial strategy within a corporate group may not be detrimental to subsidiary minority shareholders, and for this reason lawmakers have also provided for instruments to protect them, such as a request for the accounts of the entire group to be audited by a certified accountant, a right to request redemption of shares, or compensatory liability on the part of the dominant company for a decrease in the value of shares caused by instructions issued by the dominant company.

If passed, the act, which also provides for more effective oversight by supervisory boards, might be beneficial with regard to the day-to-day operations of subsidiaries with foreign capital which are part of international capital groups. As there is a six-month vacatio legis, the bill will come into force in mid-2022 at the earliest.

[1] The government proposal to amend the Commercial Companies Code and certain other acts IX term of the Sejm, docket 1515.