The liability of divided companies for the obligations of acquiring or newly incorporated companies under division by separation has given rise to controversy and debate within the legal doctrine in Poland. The legislation in force before March 1, 2019, did not provide the creditors of dividing companies with much protection.
Since March 1, 2019, under amended Article 546(1) of the Code of Commercial Companies (CCC), it has been possible to attribute joint liability to the acquiring or newly incorporated companies as well as the divided company – a milestone for the legal transactions practice. It now provides sufficient protection for the divided company’s creditors, who previously had limited effective means to control asset shifts under division by separation, which caused creditors to doubt that the transactions were secure.
The ratio legis of the amended regulation was, according to the rationale for the bill, to guarantee that the interests of the divided company’s creditors are adequately protected. The previous wording of Article 546 of the CCC did not expressly provide for any liability on the part of the divided company for the acquiring companies’ obligations. Therefore, the dividing company could shift its liabilities (or debts) to less solvent entities, while leaving the assets with the dividing company. Given the absence of express joint liability on the part of the divided company for the debts transferred to the acquiring company, the so-called profit and loss centers could have materialized, thus rendering it impossible for creditors to satisfy their claims. As stipulated in the CCC, creditors have only limited participation in the company division procedure. In the legislator’s assessment, it was necessary to lay express legal foundations for joint liability on the part of the divided company for the obligations shifted to the acquiring companies, which will better protect creditors’ interests.