How Chinese citizens shall sell shares of a limited liability company established in Poland?
Foreign entrepreneurs, including Chinese citizens, very often decide to run a business within territory of Poland. They usually conduct the business in the form of limited liability company in order to conquer their economic goals. It happens that Chinese shareholder is willing to sell his shares to Polish shareholder and withdraw from a company. How such procedure shall be conducted?
Problem connected with travel from China to Poland might be the main obstacle, unless a Chinese shareholder resides permanently on the territory of Poland. Language barriers are not an issue due to the fact that Chinese businessmen usually speak English fluently. In accordance with Article 180 of the Polish Commercial Companies Code sell of shares shall be made in the form of notarial deed. Therefore, Vendor and Purchaser shall visit a notary public. Moreover, very often the articles of association include a clause that a prior consent of general meeting is a prerequisite to sell shares. In such an event, there is a need to convene extraordinary general meeting in order to obtain the consent to sell shares before a visit to a notary public.
It has to be put into the limelight that foreign business partner doesn’t have to be present in the course of all above mentioned proceedings if he grant power of attorney to a proxy (for example to
a Polish lawyer). Consequently, Chinese businessman may authorize plenipotentiary in a Chinese notarial office and send the document to Poland in order to undertake any necessary actions. The proxy shall be authorized to act within the power of attorney and take care of Principal’s interests. What is more, the plenipotentiary may represent Chinese businessman during extraordinary general meeting.
The main principles of conduct are as follows:
- Chinese partner grants power of attorney to Polish lawyer to the extent necessary for the purposes of convening and participating in extraordinary general meeting and concluding sell shares agreement on his behalf;
- The proxy convenes extraordinary general meeting in order to issue a consent to sell shares by Chinese businessman. It has to be highlighted that it is not sufficient to issue a consent in any other form, for example by a firm’s stamp;
- After the consent is obtained the proxy concludes sell shares agreement with Purchaser in the form of notarial deed;
- Duly executed sell shares agreement shall constitute the basis for amendments to the articles of association in National Court Register.
Below I present the example of sell shares agreement drafted by one of our lawyers for the benefit of foreign entrepreneur:
Above mentioned principles may change due to provisions included in the articles of association. It is very important to properly draft all required documents and submit them to the competent authority. If Chinese businessman demand the direct access to all documents then we shall draft them also in English (for example: sell shares agreement, power of attorney, draft of resolution). Finally, proceedings connected with submitting documents are only legal formalities. After all, the world is so small…