The procedure known as transformation of companies involves changing their legal form. It is usually performed for the sake of facilitating the realization of business targets or economic conditions, as well as adjusting the legal form of the company to be most suitable for the business activity conducted.
In principle, all commercial companies and partnerships may be transformed. Once the procedure has been initiated, the company is referred to as a company under transformation. After the appropriate entry in the register is made – it is considered a transformed company.
The following are the three most prevalent types of company transformations: transforming a civil law partnership into a registered partnership; a registered partnership into a limited partnership or a limited partnership into a limited joint-stock partnership. Regulations of this procedure are within the provisions of the Code of Commercial Partnerships and Companies.
The first step is to prepare a transformation plan (in writing – for evidence purposes) covering, among other things, the balance sheet of the company’s assets. A registration court commissions an expert auditor whose task is to review this plan.
Another requirement is adopting a resolution by the management board or the partners. It is followed by declarations of intent to participate in the prospective transformed company.
The third step consists in appointing the company’s governing bodies and the members thereof. Once the foregoing steps have been undertaken, the partnership agreement may be concluded or the company’s deed of association drafted.
The remaining part of the procedure is similar to registering a new company – making an entry in the National Court Register (KRS) and announcing the transformation of the company in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy).
It is worth emphasizing that under the principle of continuity the transformed company takes over all obligations and rights of the predecessor (e.g. permits, licenses). Tax Identification Number (NIP – Numer Identyfikacji Podatkowej), and Industry Identification Number (REGON) also remain unchanged. Transformation of a company may prove significantly beneficial.
Apart from the, already mentioned, facilitation of achieving business goals, it also makes way to e.g. tax optimization or actions that would be unavailable in the previous form – debut on the Stock Exchange to name one.
CGO Legal law firm provides services which include transformation of companies. We assist in the preparation of transformation plans and gathering necessary documentation. We also help with drafting the agreements or deeds of association and finally in making entries in adequate registers.
In case you have any questions please do not hesitate to contact us.