Share deal or asset deal? Choosing how to acquire a Polish business

What happens in a share deal?

In a typical share deal, the buyer acquires shares in a Polish limited liability company. The company remains the same legal entity and continues to own its assets, employ its staff, perform its contracts, owe its liabilities and hold its receivables. Its shareholder or ownership structure changes.

This supports operational continuity because individual assets do not need to be transferred one by one. It does not eliminate formalities. As a rule, a transfer of shares in a Polish limited liability company requires written form with signatures certified by a notary, subject to specific rules for companies using the online model documentation system. The articles of association may require company consent or impose other transfer restrictions. The company must also be notified and provided with evidence of the transfer.

The buyer assumes the economic exposure to the company as a whole, including the consequences of pre-closing events. Due diligence, seller warranties, liability caps, claim procedures and possible retention or escrow arrangements are therefore particularly important.

What happens in an asset deal?

An asset deal may cover specified assets, an organised part of an enterprise or the enterprise as a whole. The parties may agree, for example, that the buyer will acquire equipment, stock, a domain, brand rights, software, customer relationships and selected contracts.

This flexibility comes with execution complexity. Different asset categories may require different transfer methods. Receivables may need to be assigned, debts require the creditor-consent mechanics provided by Polish law, contracts must be reviewed individually, and IP transfers require the proper form and scope. Permits and administrative decisions do not always transfer to the buyer.

Where an enterprise is sold, the transaction generally covers everything forming part of that enterprise unless the agreement or mandatory law provides otherwise. The sale of an enterprise requires written form with signatures certified by a notary. If real estate is included, a notarial deed may be required.

What happens to contracts and liabilities?

In a share deal, the contractual party normally remains unchanged because the same company continues to be bound. Key contracts should nevertheless be reviewed for change-of-control provisions. A bank, licensor, landlord or strategic customer may have a consent, renegotiation or termination right when ownership changes.

An asset deal is more complex. A receivable can generally be assigned without debtor consent unless prohibited by law, the contract or the nature of the obligation. A debt transfer requires the structure and consents prescribed by the Polish Civil Code, including creditor consent in the usual scenario.

The buyer of an enterprise or its organised part may be jointly and severally liable with the seller for obligations connected with the enterprise unless the buyer did not know of them despite exercising due care. The buyer’s liability is capped by reference to the value of the acquired enterprise under the Civil Code. An asset buyer therefore still needs liability due diligence even if it does not intend to assume the debts contractually.

What happens to employees?

In a share deal, the company remains the employer. The share transfer itself does not change the party to employment contracts, although later restructuring may require a separate assessment.

An asset deal may constitute a transfer of an undertaking or part of an undertaking. If Article 23¹ of the Polish Labour Code applies, the buyer becomes the employer under the existing employment relationships by operation of law. The parties cannot exclude this result merely by stating otherwise in the acquisition agreement.

The assessment depends on whether the transferred operation retains its economic identity, which assets and activities move, and how the business will continue. The transaction timetable should account for employee and trade-union information or consultation duties.

How should the parties choose?

A share deal is often a natural choice where the value lies in the continuity of the company, its contracts, team, licences and customer relationships. Sellers frequently prefer it because they can dispose of their investment as a whole. The buyer, however, will seek protection against historical risks.

An asset deal may suit an investor acquiring only one business line or a defined asset perimeter. It can allow certain disputes or activities to remain outside the deal. It does not automatically eliminate liabilities connected with an enterprise, and the required transfers and consents may materially extend the path to closing.

The decision should consider at least:

A transaction meeting the relevant thresholds may be subject to review by the President of the Polish Office of Competition and Consumer Protection or the European Commission. Turnover thresholds alone do not determine the filing outcome because statutory exemptions may apply. Merger-control analysis should be completed early rather than immediately before signing.

• ownership structure and the ability to transfer shares;
• assets and liabilities intended to remain or move;
• key contracts and change-of-control clauses;
• employees and the intended operating model;
• IP, permits and data;
• real estate and financing security;
• tax and accounting consequences confirmed by the relevant advisers;
• any merger-control filing requirement.