Share Purchase Agreement in Poland: Key Clauses for Buyers

A share purchase agreement in Poland is a contract under which a buyer acquires shares in a Polish company, often a limited liability company, or sp. z o.o., from the existing shareholder or shareholders. For buyers, the agreement is not only a transfer document. It is the main instrument for allocating transaction risk, securing information rights, setting closing conditions and creating remedies if the acquired business does not match the seller’s disclosures.

In a Polish sp. z o.o., the sale of shares generally requires written form with notarised signatures under Article 180 section 1 of the Polish Commercial Companies Code [1]. A failure to meet this form requirement results in the invalidity of the transfer agreement. The transaction must therefore be structured carefully from the first draft of the SPA through to closing and post-closing corporate formalities.

Lawyersinpoland.com by Kopeć & Zaborowski assists international buyers in assessing legal, regulatory and operational risks connected with acquisitions in Poland.

 

Buyer due diligence before signing a share purchase agreement in Poland

An SPA should reflect the findings of legal due diligence. A buyer should not rely solely on a seller’s summary of the target’s corporate status, contracts or financial position. Particular attention should be given to the target’s articles of association, register of shareholders, corporate resolutions, material agreements, employment arrangements, licences, tax exposures and ongoing disputes.

For an SPA sp z oo buyer protection strategy, due diligence should also verify whether the shares are free from pledges, usufruct rights, attachments or other third-party claims. The National Court Register is an important source, but it does not replace a review of the register of shareholders, transaction documents and the target’s internal records.

 

Key transfer requirements and three important restrictions and risks

Polish law permits the transfer of shares in an sp. z o.o., but the transaction may be restricted by the articles of association or third-party rights. Three issues require particular attention:

1. Consent requirement: the articles of association may make the sale of shares conditional on the company’s consent. This is expressly permitted by Article 182 of the Commercial Companies Code [1]. The articles may also define the procedure, deadline and consequences of refusing consent.
2. Pre-emption or first refusal rights: the articles of association or a shareholders’ agreement may require the seller to offer shares to existing shareholders before selling them to an external buyer. The scope and enforceability of such rights depend on the wording of the relevant document and the factual situation. Rights provided solely in a shareholders’ agreement generally bind its parties and do not automatically bind the company or a buyer that is not a party to that agreement.
3. Encumbered shares: shares may be subject to a pledge, usufruct, enforcement attachment or other restriction. A buyer should require evidence of release before closing or make release a condition precedent.

After closing, the company should be notified of the transfer and provided with evidence of the transaction. Under Article 187 of the Commercial Companies Code, the transfer is effective against the company once the company receives notice and evidence of the transfer [1]. The management board should then promptly update the register of shareholders in accordance with Article 188 of the Commercial Companies Code.

 

Representations and warranties in a Polish SPA

Representations and warranties in a Polish SPA are central to buyer protection. They should cover the seller’s title to shares, authority to enter into the agreement, the target’s valid incorporation, accuracy of corporate records, absence of undisclosed liabilities, compliance, litigation, tax matters, employment issues, intellectual property and material contracts.

Generic wording creates limited practical protection. Each warranty should be linked to a defined disclosure standard, survival period, financial cap and remedy mechanism. Buyers should also distinguish between fundamental warranties, such as title and authority, and operational warranties relating to the business.

A disclosure letter may qualify warranties. From a buyer’s perspective, disclosures should be specific, documented and limited to matters fairly disclosed. Broad references to a virtual data room can significantly weaken the value of the warranty package.

 

Locked box vs completion accounts in Poland

The choice between locked box and completion accounts affects price certainty and post-closing disputes.

• Locked box: the price is based on historical accounts at a fixed date. The buyer normally obtains protection through covenants against value leakage between the locked box date and closing.
• Completion accounts: the price is adjusted after closing based on agreed financial metrics, usually cash, debt and working capital. This structure may better reflect the target’s actual position at closing but requires detailed accounting principles and a dispute process.

In locked box transactions, the definition of leakage is particularly important. Permitted payments, such as disclosed management remuneration or dividends, should be narrowly defined. In completion accounts transactions, the SPA should identify accounting policies, preparation deadlines, review rights and expert determination procedures.

 

Earn-out clauses and deferred consideration in Poland

An earn-out arrangement makes part of the price conditional on future performance, for example revenue, EBITDA or customer retention. It can bridge valuation gaps, especially where the seller remains involved in the business after closing.

However, earn-outs often generate disputes. The SPA should specify the financial metric, accounting methodology, calculation period, access to information, operational covenants, payment date and dispute resolution mechanism. The buyer should avoid obligations that effectively require operating the target in a manner designed to maximise the seller’s earn-out at the expense of the buyer’s commercial strategy.

 

MAC clause and conditions precedent

A MAC clause and conditions precedent serve different functions. A material adverse change clause may allow the buyer to withdraw if a serious negative event affects the target between signing and closing. Polish law does not provide a standard statutory definition of MAC, so the clause must define the relevant event, exclusions and evidentiary threshold.

Conditions precedent commonly include corporate approvals, release of security over shares, regulatory clearance, consent from key counterparties and absence of injunctions. Where merger control thresholds are met and no statutory exemption applies, a concentration may require notification to the President of the Office of Competition and Consumer Protection before implementation under Articles 13 and 14 of the Act on Competition and Consumer Protection [2]. Certain acquisitions by foreign investors may also require prior notification under the Polish foreign direct investment screening regime [3].

 

W&I insurance in Polish M&A transactions

Warranty and indemnity insurance can support a clean exit for the seller while providing the buyer with recourse for warranty breaches. W&I insurance policies in Polish M&A transactions do not replace due diligence. Insurers commonly exclude known issues, forward-looking statements, purchase price adjustments and matters identified in diligence. The scope of cover for tax matters depends on the policy terms and underwriting.

The SPA must remain aligned with the insurance policy, including warranty scope, liability limitations and claims procedures. A buyer should also assess the insurer’s financial standing, retention amount, policy exclusions and notification deadlines.

This is informational material, not legal advice. For transaction-specific assessment of an acquisition structure, SPA provisions and regulatory approvals, international buyers may contact us for support from the law firm.

 

FAQ – Share Purchase Agreement in Poland

Does a Polish share purchase agreement require a notary?

For the sale of shares in a Polish sp. z o.o., the agreement must be in written form with notarised signatures under Article 180 section 1 of the Commercial Companies Code. A full notarial deed is not generally required for the share transfer itself.

Can the articles of association restrict a share sale?

Yes. Article 182 of the Commercial Companies Code permits the articles of association to make a share transfer conditional on company consent. Pre-emption rights or first refusal rights may also arise from the articles or a shareholders’ agreement. Rights contained only in a shareholders’ agreement generally bind the parties to that agreement.

What is the main difference between locked box and completion accounts?

A locked box fixes the price by reference to historical accounts and protects the buyer against leakage. Completion accounts adjust the price after closing using agreed closing financial metrics.

Are representations and warranties enforceable in Poland?

Yes, provided that the SPA clearly defines the warranties, disclosure process, liability limits, survival periods and remedies. Enforceability and available remedies depend on the contract wording and facts of the case.

When is a MAC clause useful in a Polish SPA?

A MAC clause is most useful where there is a significant period between signing and closing. It should precisely identify the events that allow the buyer to terminate or refuse closing.

Is W&I insurance suitable for every Polish acquisition?

No. Suitability depends on transaction value, diligence quality, seller liability expectations, policy exclusions and the risk profile of the target. Known issues generally require separate contractual protection.

 

Bibliography

[1] Act of 15 September 2000 – Commercial Companies Code, consolidated text: Journal of Laws 2024, item 18, as amended; in particular Articles 180, 182, 187 and 188.

[2] Act of 16 February 2007 on Competition and Consumer Protection, consolidated text: Journal of Laws 2024, item 1616, as amended; in particular Articles 13 and 14.

[3] Act of 24 July 2015 on the Control of Certain Investments, consolidated text: Journal of Laws 2024, item 127, as amended; in particular provisions on control of acquisitions by foreign investors.