On paper, the choice between a share deal and an asset deal looks like a binary decision. In practice, it determines tax exposure, liability inheritance, and the speed of closing – sometimes by months. A buyer who picks the wrong structure at the term-sheet stage may find the error impossible to reverse without unwinding the entire transaction.
In a share deal, the buyer acquires the legal entity itself – including all its liabilities, contracts, and regulatory licences. In an asset deal, the buyer selects specific assets and, where agreed, designated liabilities. Polish corporate legislation governs share transfers through the Kodeks spółek handlowych (Commercial Companies Code, KSH), while asset transactions are primarily governed by civil-law contract principles and sector-specific regulations.
This alert covers the structural differences that matter most, the thresholds and deadlines that affect deal design, and the immediate action items buyers and sellers should address before signing a letter of intent.
What are the core structural differences between the two approaches?
The share deal transfers ownership of the company itself. The buyer steps into the seller's shoes – inheriting all contracts, employees, permits, and contingent liabilities. For a Polish spółka z ograniczoną odpowiedzialnością (limited liability company, sp. z o.o.), the transfer requires a written agreement with notarially certified signatures and registration with the National Court Register (KRS). Closing without KRS notification does not invalidate the transfer, but it affects third-party enforceability.
The asset deal is structurally different. The buyer cherry-picks assets – machinery, intellectual property, customer contracts, real estate – and leaves unwanted liabilities with the seller. This selectivity is the asset deal's main commercial advantage. However, Polish civil law imposes an important constraint: where the transferred assets constitute an przedsiębiorstwo (enterprise as a whole), the buyer becomes jointly and severally liable for the seller's obligations connected to that enterprise, up to the value of the acquired assets.
That joint-and-several liability rule is not optional. It applies automatically unless creditors consent otherwise. Buyers who assume they have cleanly ringfenced liabilities through an asset deal – without proper legal structuring – may face claims they did not anticipate.
- Share deal: full liability inheritance, simpler contract novation, KRS registration required
- Asset deal: selective acquisition, joint liability risk for enterprise transfers, VAT implications differ
- Transfer of an enterprise as a whole is VAT-exempt under Polish tax law
- Individual asset transfers are generally subject to VAT at standard rates
We secured a clean asset carve-out for a manufacturing client in the Mazowieckie region (autumn 2025), structuring the transaction so that the transferred assets fell below the enterprise threshold – avoiding automatic joint liability and reducing the buyer's due diligence scope by roughly 40 percent.
Who is affected by these thresholds, and when does the choice become irreversible?
The structure choice affects every Polish M&A transaction, but the stakes are highest where contingent liabilities are material. Under Polish tax law, the buyer in a share deal inherits the target's full tax history. The Polish tax authority – the Krajowa Administracja Skarbowa (National Revenue Administration, KAS) – can audit the target for up to five years prior to the transaction. Undisclosed tax liabilities discovered post-closing fall entirely on the new owner.
For regulated businesses, the structure choice also determines whether licences survive. Permits issued by the Polish Financial Supervision Authority (KNF) or sector regulators are typically personal to the entity. A share deal preserves them automatically. An asset deal requires a fresh application – a process that can take three to six months and may not succeed at all if the buyer does not meet the regulator's criteria.
The irreversibility point arrives at signing. Once a share purchase agreement is executed and the KRS filing is made, the buyer owns the liabilities. Renegotiation is possible only if the seller cooperates – and sellers rarely do after closing. The same logic applies to asset deals: once the enterprise transfer is registered and creditors are notified, the joint-liability window is open.
Board liability adds another layer. Under the Commercial Companies Code, directors of the target company may have personal exposure for obligations incurred before the transaction. Buyers in a share deal assume the risk that prior management created undisclosed liabilities. Our article on board liability under Polish corporate law sets out how that exposure is calculated and when it transfers.
What immediate steps should buyers and sellers take before signing?
The structure decision should be made before – not during – due diligence. Reversing it mid-process costs time and signals weakness to the counterparty. Three immediate action items apply regardless of deal size.
First, map contingent liabilities within 14 days of receiving the information memorandum. Tax claims, employment disputes, and environmental obligations are the three categories most likely to shift the cost-benefit calculation toward an asset deal. A focused due diligence Poland exercise – even a limited-scope review – should cover KAS audit history, pending litigation before the KRS, and any regulatory proceedings before KNF.
Second, confirm the VAT treatment of the proposed structure. If the transaction qualifies as a transfer of an enterprise, VAT does not apply – but the joint-liability rule does. If the parties structure the deal to avoid enterprise classification, VAT applies to each asset individually. The tax cost of getting this wrong can exceed PLN 500,000 on a mid-market transaction.
Third, check whether any contracts contain change-of-control clauses. In a share deal, a change-of-control clause in a key customer or supplier contract can terminate that contract automatically on closing. Identifying these clauses before signing – not after – is standard practice in M&A Poland transactions. Our guide on red flags in Polish M&A for UK buyers covers the most common contractual traps.
- Map contingent liabilities within 14 days of receiving deal documents
- Confirm VAT and enterprise-transfer classification before term sheet
- Identify change-of-control clauses in material contracts
- Verify KRS registration status and any pending KRS proceedings
- Assess KNF or sector-regulator licence portability
For investors also considering the legal form of the acquisition vehicle, our comparison of sp. z o.o. vs SA for foreign investors addresses the set up company Poland question and the KRS registration timeline in detail.
We obtained a full indemnity for a German investor's subsidiary in Lower Silesia (spring 2026), after identifying a material tax contingency during a 10-day accelerated due diligence review that the seller had not disclosed in the data room.
The structure choice in any M&A transaction is not a formality. It is the decision that shapes every other negotiation that follows. Choosing without a clear liability map and tax analysis forfeits protection that cannot be recovered after closing.
To receive an expert assessment of your proposed transaction structure, contact info@kordeckipartners.com.
Frequently asked questions
Q: Can the buyer in a share deal limit inherited tax liabilities through contractual protections?
A: Yes, through tax indemnities and warranty and indemnity insurance. However, contractual protections do not eliminate the underlying liability – they shift the economic cost between parties. The KAS retains the right to pursue the company directly for any undisclosed pre-closing tax obligations, regardless of what the sale agreement says. Indemnities are only as valuable as the seller's ability to pay.
Q: How long does a typical Polish M&A transaction take from signing to KRS registration?
A: For a sp. z o.o. share deal, the KRS registration of the new shareholder typically takes two to four weeks after submission of the notarially certified transfer agreement. Asset deals involving real estate require separate land register entries, which can extend the process by six to twelve weeks depending on the court's workload. Regulatory approvals – where required – are not included in these timelines.
Q: Is it a misconception that asset deals are always safer for buyers?
A: Yes. The assumption that an asset deal automatically isolates the buyer from seller liabilities is incorrect under Polish law. Where the transferred assets constitute an enterprise as a whole, joint-and-several liability applies up to the value of those assets. Proper structuring – including carving out specific assets to avoid enterprise classification – requires legal analysis before the transaction is designed, not after the heads of terms are signed.
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 structuring, due diligence, and transaction execution. 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.