Head office signs off on a Polish merger or demerger and assumes the plumbing takes care of itself: everything the company had on Monday belongs to the right entity on Tuesday. For a merger that assumption is almost true. For a demerger it is almost the reverse - and the gap between the two is where the unpleasant surprises live. Whether a contract, a permit, a lawsuit or an employee ends up where you want it depends on which of the two you are doing, and on how carefully one document was written.

In a merger, almost everything moves by itself

On the merger date the acquiring company (spółka przejmująca) steps into all the rights and obligations of the acquired company (Art. 494 § 1 of the Commercial Companies Code, Kodeks spółek handlowych, “KSH”). This is universal succession, and it is generous. It works by operation of law, in a single moment, without separate transfer agreements, without the special form a given asset would normally need - no notarial deed for the real estate - and without asking creditors to consent to the change of debtor. Contracts, receivables, debts and claims pass across, including ones the company had forgotten it had. Pending litigation continues with the acquiring company as a party. Employees move too, under their own rules (below).

A subtler point sits at the edge of this. A departed employee’s post-employment non-compete does not travel on the employment-transfer rule - it is a separate contract, outside the employment relationship - but it can still pass with the business under universal succession - the Supreme Court has pointed to that route, naming the merger and demerger provisions (Art. 494 § 1 and Art. 531 KSH; judgment of 19 January 2017, I PK 275/16). The lesson is the useful one: at a merger, the default is that things come across, even the ones you might expect to fall away.

In plain terms: for a merger, your default assumption - “it all came across” - is the right one. The work is not making things transfer; it is tidying up afterwards. Rights pass automatically, but entries in the land and other registers do not update themselves. The acquiring company’s board has to apply for them (Art. 494 § 3 KSH), and until it does, some rights are hard to exercise in practice.

What a merger leaves behind

A short list of things does not ride along on universal succession, and every item on it is easy to miss.

  • Board mandates. The link between the acquired company and its own management or supervisory board members is corporate, not contractual, so it does not transfer. Those mandates end; they do not migrate to the acquiring company’s board.
  • An arbitration clause in the articles of association. An arbitration clause (zapis na sąd polubowny) inside a commercial contract passes with the contract, like any other of its terms. The same clause written into the company’s own articles of association does not - it has to be adopted afresh by the acquiring company if you want it to keep working.
  • Recurring non-cash obligations of shareholders (Art. 176 KSH) written into the acquired company’s articles. They lapse with those articles unless the same obligation is written into the acquiring company’s articles.
  • Financial-institution permits, if the regulator objects. Where the company is a financial institution, a permit or concession passes only if the authority that granted it does not lodge an objection within one month of the merger plan being announced (Art. 494 § 5 KSH). Nothing in the KSH requires you to notify the regulator; the announcement starts the clock. Banks are a separate case: a bank merger needs the regulator’s prior permit under the Banking Law.
  • Sector permits, as a general matter. Art. 494 § 2 KSH says permits, concessions and reliefs pass “unless a statute or the decision granting them provides otherwise” - and that proviso does a lot of work. Whether a particular regulated permit actually travels, and on what terms, is answered in the sector statute, not in the KSH. Treat every material permit as something to check, not assume.

In a demerger, only what the plan allocates moves

A demerger runs on the same engine - universal succession - but fitted with a throttle. The successor companies step into the rights and obligations of the company being divided (spółka dzielona) only to the extent the demerger plan (plan podziału) allocates them (Art. 531 § 1 KSH). Lawyers call this partial universal succession, which describes the mechanics but undersells the consequence: the plan is not a description of a transfer that would happen anyway - it is the instrument that decides what transfers. Permits, concessions and reliefs follow the assets they are tied to (Art. 531 § 2 KSH): they attach to whichever company receives the related business, not to whichever company the plan happens to name.

In plain terms: at a merger your worry is “did anything fail to come across?” - and almost nothing does. At a demerger the worry is the opposite: “did we actually allocate everything we meant to?” - because whatever you did not allocate is now somewhere you may not want it.

What the plan forgets doesn’t disappear - it lands somewhere worse

Two things can happen to anything the plan leaves out, depending on the type of demerger.

If the company being divided is split up entirely and removed from the register, an unallocated asset becomes co-owned by all the successor companies in fractional shares, and an unallocated liability becomes the joint and several liability of all of them - unlimited and primary, not the capped, time-limited liability that otherwise shields the companies involved (Art. 531 § 3 KSH). A debt you overlooked is now everyone’s, in full.

If the company being divided survives - a demerger by spin-off (wydzielenie) or by separation (wyodrębnienie) - anything not allocated simply stays with it. Sometimes that is harmless; sometimes it means the liability, contract or permit you meant to move is stranded in the very company you were trying to clean up.

Either way, “we forgot to list it” is not a harmless clerical slip. It is a decision the statute makes for you.

Write the plan so the annex has a safety net

This is where most demergers are won or lost, and it is a drafting question, not a legal one.

In my practice almost every demerger moves an organised part of an enterprise (ZCP). The plan says, in substance: we transfer the organised part and everything belonging to it - in particular the assets, contracts and so on set out in the annex. Two things then happen in real life. First, the client almost always leaves something out of the annex. Second, the business is alive: between signing the plan and the demerger day the assets move - something is sold, something new is signed. When a forgotten or newly-arising contract organisationally belonged to the moved business, we treat it as having passed on the demerger anyway - and the basis we point to is not the itemised annex but the general clause in the plan that describes the organised part being moved.

In plain terms: give the annex your closest attention - it is the backbone of the transfer, and worth every hour it takes to get right. But a well-drafted plan also builds in a safety net. Because the general clause moves the organised part as a functional whole, an asset or contract that genuinely belongs to that business - but slipped off the annex, or arrived after it was fixed - is still caught. That cushion is what saves the structure when the ordinary life of a company meets a list that stopped being accurate the day it was signed. The annex carries the weight; the general clause stops the normal, foreseeable gaps from becoming co-ownership or stranded assets.

Employees move with the business - plan or no plan

Employees are the one thing you cannot allocate away. Where a business, or an organised part of one, changes hands, the staff attached to it become the new employer’s staff by operation of law - and in a demerger this holds even if the plan says otherwise (Art. 23¹ of the Labour Code, Kodeks pracy). A merger transfers a whole establishment; a demerger transfers the part that moves, with the rest staying where it is. Three consequences a foreign board should plan for:

  • Where only part of the establishment moves, the old and the new employer are jointly and severally liable for employment obligations that arose before the transfer.
  • The employees - or, where there is a trade union, the union - must be informed at least 30 days before the transfer, and each of them may leave within two months of it, on short notice.
  • The reorganisation itself is not a lawful reason to dismiss anyone. If a role genuinely disappears as a result, that is a separate conversation - but “we merged” is not, on its own, a ground.

Tax is a separate regime - don’t read it off the KSH

It is tempting to assume that because Art. 494 KSH moves “all rights and obligations”, it moves the tax position too. It does not - at least, not from the KSH. Tax succession has its own statute, the Tax Ordinance (Ordynacja podatkowa), and it reaches a merger or demerger only because that statute says so, on its own terms. Material tax law can then carve pieces out: a well-known example is that, for the acquired company or the company being divided, accumulated tax losses do not come across. The rule this site keeps repeating applies here too - the company law tells you what happens to the company, not what happens to the tax bill. Confirm that with your Polish tax adviser before you rely on it.

Watch out

  • A permit that transfers is not always the same permit. In my practice the sharpest example is road transport. Some transport permits used to be granted for long terms that are no longer issued. On a reorganisation the right does pass - but it passes in today’s shorter form, not the one you started with, and for a logistics business that shortening has been enough to derail the reorganisation. There is a structural reason: under the Road Transport Act (ustawa o transporcie drogowym, Art. 13(2)(2)), a road-transport authorisation moves not on the succession alone but through a separate, constitutive decision transferring it - one you can apply for only after the reorganisation, so plan for a gap in which the activity cannot lawfully run. Energy permits I have not seen fail, but they are always a matter of judgement: check what the regulator will actually examine after the merger or demerger, rather than assuming the permit rides across untouched.

  • Real estate passes - but the land register won’t catch up on its own, and the form can trip you. Ownership of a property moves on the merger or demerger by operation of law, yet the change shows in the land register (księga wieczysta) only once the successor’s board applies for the entry. In a demerger this hides a real trap. The property is identified in the demerger plan, which the KSH allows to be in ordinary written form. The demerger resolutions are notarial deeds, but they usually do not list the individual properties; and the court’s registration order does not itemise them either. So the board files at the land register with a court order that is silent on the property and a plan that names it but is only in written form - and a plain written document does not meet the form the register requires, which is a document with notarised signatures unless a special rule says otherwise (Art. 31(1) of the Land and Mortgage Register Act, ustawa o księgach wieczystych i hipotece).

    For precision - the practical fix, decided before you sign: either adopt the demerger plan with signatures certified by a notary, so it meets Art. 31(1), or list the transferring properties in the demerger resolution itself, which is already a notarial deed. If the demerger is already registered and the problem only surfaces at the land-register stage, the fallback is to have the signatories certify their signatures on the plan before a notary after the event - workable, but an avoidable scramble at exactly the moment everyone assumed the deal was closed. It is an easy detail to miss, and it surfaces only at the land-register stage, after the demerger is registered, when it feels like the work is behind you.

  • The financial-institution objection window. If any company involved is a financial institution, the one-month objection period runs from the announcement of the plan - and nobody writes to the regulator to start it. Put it in the diary.

  • Creditor protection is a separate topic. A demerger carries a capped, time-limited joint liability of the companies involved for the debts allocated to the others (Art. 546 KSH), and a merger has its own creditor-protection machinery. Both are covered in a separate article on whether creditors can block a merger or demerger; here it is enough to know they exist and do not switch off.

Next steps: a pre-signing check

  1. For a demerger, describe the moved business functionally - an organised part of an enterprise defined precisely enough to be identified objectively - and treat the asset and contract annex as the backbone, with the general clause as its safety net.
  2. Decide the form of the demerger plan before signing: if real estate is moving, use signatures certified by a notary, or list the properties in the demerger resolution, so the land-register entry is not blocked later.
  3. List the items that do not travel on their own and deal with each: board mandates, any arbitration clause in the articles, Art. 176 obligations.
  4. Map every regulated permit to its sector statute and confirm whether - and in what form - it survives the reorganisation.
  5. If any entity is a financial institution, diarise the one-month objection window from the plan’s announcement.
  6. Plan the employee (or trade-union) information step (30 days before) and budget for the two-month walk-away right.
  7. Send the tax questions to your Polish adviser before signing, not after.
  8. After registration, put the register updates - land, pledges, intellectual property - on the successor board’s task list.