Squeeze-out is a solution that so far has only functioned in the Polish legal system in joint-stock companies. It consists of the possibility of the parent company to buyout the minority shares in subsidiaries.
Currently, the parent company cannot reorganize its structures freely, but only for important reasons or as a result of a valid court ruling.
According to the proposed amendment, the parent company (limited liability company or joint-stock company) may demand the redemption of shares or stocks of the subsidiary, if the parent company owns at least 90% of the share capital of a subsidiary.
On the basis of an appropriate provision in the Articles of Association or statute, the parent company may acquire this right also if it holds less than 90% of the share capital, but more than 75%.
The parent company will be able to shape its dependence structure in practically any way it wants. What action should be taken to apply this amendment?
- Due to the change in the corporate governance structure, it is necessary to ensure that the content of the Articles of Association is updated in this respect.
Works on the Amendment described have not yet been completed. Our Law Firm will inform you about any changes in our social media – on LinkedIn and Facebook!
Author: Oliwia Kruczyńska, Junior Associate at Kołecka Law Firm
