A foreign buyer signs a letter of intent for a Polish target. The data room opens. Within days, the deal team spots inconsistencies in the share register, undisclosed tax proceedings, and a lease agreement that cannot be assigned without landlord consent. Each issue, taken alone, looks manageable. Together, they signal a transaction that could close at the wrong price – or not close at all.

Polish M&A transactions carry a distinct set of structural and regulatory risks that differ from Western European norms. The National Court Register (Krajowy Rejestr Sądowy, KRS) may not reflect the true ownership picture, undisclosed liabilities can survive a share deal, and certain regulatory approvals must be obtained before signing rather than before closing. Buyers who skip or compress due diligence in Poland risk acquiring hidden debt, personal liability exposure, or assets encumbered by third-party rights. Acting on red flags early – ideally within 30 days of receiving the data room – protects both price and timeline.

This alert identifies the most common red flags encountered in Polish M&A, explains which buyers are most exposed, and sets out immediate action items. The structure follows the deal lifecycle: KRS and corporate records first, then financial and tax exposure, then closing mechanics.

What do KRS and corporate records reveal about a Polish target?

The KRS is the first stop in any Polish due diligence. It is a public register maintained by the district courts, and it discloses the company's share structure, management board composition, and any registered encumbrances. However, KRS entries can lag reality by weeks or months. A board member removed at a shareholders' meeting may still appear as a signatory in the register – and contracts signed by that person during the gap may be challenged.

The Kodeks spółek handlowych (Commercial Companies Code, KSH) governs spółka z ograniczoną odpowiedzialnością (private limited liability company, sp. z o.o.) and spółka akcyjna (joint-stock company, SA) structures. Under Polish corporate legislation, a share transfer in a sp. z o.o. requires a notarised deed. If the target's share ledger (księga udziałów) does not match the KRS, the buyer faces a chain-of-title problem that can delay or invalidate closing. We identified a chain-of-title gap for a manufacturing client in the Mazowieckie region (autumn 2025) – resolving it added six weeks to the timeline.

Key red flags at this stage include:

  • Share ledger entries inconsistent with KRS filings
  • Undisclosed pledges or usufruct rights over shares
  • Missing shareholders' resolutions approving prior asset disposals
  • Deadlocked supervisory board with no quorum for at least 90 days

For buyers comparing sp. z o.o. and SA structures before entry, the decision matrix in our guide on sp. z o.o. vs SA for United Kingdom investors sets out the structural trade-offs in detail. Resolving corporate record issues before signing – not before closing – is the correct sequence. Leaving them to a conditions-precedent list creates leverage for the seller to renegotiate price.

Which financial and tax exposures most often derail Polish deals?

Tax liability in a Polish share deal travels with the company. The Polish Tax Administration (Krajowa Administracja Skarbowa, KAS) has a five-year limitation period for most tax obligations, meaning a buyer in 2026 inherits exposure back to 2021. VAT reclaims, transfer-pricing adjustments, and undisclosed KAS audit proceedings are the three categories that most frequently cause price renegotiation or deal collapse.

The Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF) adds a separate layer for regulated targets. Financial services, insurance, and payment-institution acquisitions above certain thresholds require KNF approval before closing. Missing this approval does not merely delay closing – it can render the transaction void. Buyers should confirm regulatory status within the first two weeks of due diligence.

Real estate held by the target introduces further risk. Zoning status and planning permissions in Poland are governed by local spatial development plans. Our analysis of spatial planning and zoning rules in Poland explains how a missing local plan can block development for years. We secured a price reduction exceeding PLN 3m for a retail investor in Lower Silesia (spring 2025) after a zoning red flag surfaced mid-diligence.

Immediate action items for financial and tax exposure:

  • Request KAS audit history and any pending tax proceedings from the seller on day one
  • Confirm transfer-pricing documentation covers the last three fiscal years
  • Verify KNF or sector-specific approval requirements before signing
  • Check real estate zoning status against the target's business plan assumptions

For buyers also evaluating Czech Republic entry points alongside Poland, the structural comparison in our sp. z o.o. vs SA matrix for Czech Republic investors provides useful context on how liability exposure differs across jurisdictions.

Specific financial thresholds matter here. Polish merger control applies when the combined turnover of the parties exceeds PLN 1 billion in Poland, or when the target's Polish turnover exceeds PLN 10 million. Failing to notify the Office of Competition and Consumer Protection (Urząd Ochrony Konkurencji i Konsumentów, UOKiK) before closing triggers fines and potential deal unwinding. The notification deadline is before implementation – not after signing.

A buyer who treats due diligence as a formality rather than a risk-pricing tool forfeits the ability to renegotiate. Once the purchase price is fixed and conditions precedent are satisfied, the window for price adjustment closes permanently.

What to prepare before signing a Polish M&A transaction

Acting on red flags requires a structured checklist. The following items should be resolved or formally allocated (via representations, warranties, and indemnities) before signing:

  • KRS and share ledger reconciliation confirmed by notary
  • KAS audit status letter obtained from seller, covering the last five years
  • UOKiK merger control thresholds assessed and notification filed if required
  • KNF or sector approval confirmed in writing before signing
  • Real estate zoning and lease assignment consents obtained or escrowed

Each unresolved item should be mapped to a specific contractual mechanism – price adjustment, escrow, deferred consideration, or walk-away right. A red flag without a contractual response is simply a risk the buyer has accepted for free.

The timeline is tight. Polish notarial practice requires the share transfer deed to be executed before a Polish notary. Coordinating foreign buyer signatories, Polish notarial availability, and regulatory approvals typically requires at least 45 days from a clean data room. Compressing this window increases the probability of a defective closing.

Buyers who set up company Poland operations through an acquisition rather than a greenfield incorporation face the full weight of inherited liability. That inherited exposure – tax, employment, environmental, contractual – is the core reason why due diligence in Poland cannot be delegated to a checklist exercise conducted remotely.

The specific situation of your transaction requires analysis before the signing date. Unresolved red flags at closing become permanent liabilities that cannot be reversed through post-closing claims alone.

To receive an expert assessment of red flags identified in your Polish M&A due diligence, contact info@kordeckipartners.com. Our Warsaw team will review your data room findings, map each issue to the appropriate contractual mechanism, and advise on regulatory approval timelines: info@kordeckipartners.com.

Frequently asked questions

Q: How long does Polish M&A due diligence typically take?

A: A standard due diligence process for a mid-market Polish target takes between four and eight weeks from data room opening to a clean legal report. Compressed timelines below three weeks significantly increase the risk of missing KAS audit history or undisclosed encumbrances. Regulatory approval processes – particularly UOKiK merger control – run in parallel and can add a further 30 days to the closing timeline.

Q: Does a share deal in Poland protect the buyer from the target's tax liabilities?

A: No. This is a common misconception. In a share deal, the buyer acquires the legal entity, including all its historical tax obligations. The KAS limitation period extends five years from the end of the tax year in which the liability arose. Representations, warranties, and a tax indemnity in the sale and purchase agreement are the primary contractual protections, but they depend on the seller's financial standing at the time of a claim.

Q: When must UOKiK merger control notification be filed?

A: Notification to the Office of Competition and Consumer Protection must be filed before implementation of the transaction – meaning before the share transfer is completed. The review period is one month for straightforward cases, but complex transactions may take up to four months. Implementing a notifiable transaction without prior UOKiK clearance exposes both parties to fines and potential unwinding of the deal.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to M&A transactions, due diligence, and corporate structuring in Poland. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.