Conversion of Companies with Agricultural Property

Table of Contents:

  1. What Does the Act on Shaping the Agricultural System Say?
  2. Did the Amendment to the UKUR Really Resolve All Doubts?
  3. What Was the Purpose of the Amendment?

It is undisputed that in the case of the transformation of companies in accordance with the provisions of the Commercial Companies Code, there is a continuation of the legal entity, meaning the transforming company and the transformed company are the same entity. Only the legal form of the transforming company changes.

What Does the Act on Shaping the Agricultural System Say?

The amendment to the Act on Shaping the Agricultural System (UKUR), which came into force on October 5, 2023, removed the transformation of a commercial company from the existing catalog of legal events and instead introduced a provision according to which the right to submit a statement on acquisition by the National Support Centre for Agriculture (KOWR) only applies to the transformation of an entrepreneur into a capital company or a civil law partnership into a commercial company.

The change seems to have been aimed at resolving doubts related to the correct application of UKUR provisions and ultimately eliminating the obligation to notify KOWR in the case of transformations of commercial companies owning agricultural properties while also clarifying whether UKUR provisions should apply in the case of the transformation of an entrepreneur or a civil law partnership into a commercial company.

Did the Amendment to the UKUR Really Resolve All Doubts?

According to Article 2(7) of the UKUR, the acquisition of agricultural property is understood as the transfer of ownership of agricultural property or the acquisition of ownership of agricultural property as a result of a legal act or court judgment or administrative decision, as well as another legal event.

Moreover, the catalog of property acquisitions as a result of other legal acts or other legal events listed in Article 4(1)(4) of the UKUR is not closed – therefore, the acts/events listed in Article 4(1)(4)(a-c) of the UKUR are not exhaustive.

Przekształcanie spółek z nieruchomością rolną

The term “entrepreneur” is also not defined in the UKUR, leading to the question of whether KOWR’s right to acquire agricultural property also applies in the case of the “transformation of an entrepreneur into a commercial company” based on the regulations contained in the Commercial Companies Code.

This raises the question of whether the term “entrepreneur” used in the UKUR should be interpreted not only as a sole proprietorship but also to include commercial companies, which are also entrepreneurs.

What Was the Purpose of the Amendment?

It seems that the amendment to the UKUR, which came into force on October 5, 2023, aimed to align the concept of agricultural property as defined in Article 2(7) of the UKUR with the legal consequences of transforming a commercial company. The transformation of a commercial company does not result in the acquisition of agricultural property. The owner of the agricultural property, in this case, the commercial company, does not change but only undergoes a transformation.

The introduced changes in the Act on Shaping the Agricultural System do not unequivocally resolve whether, in the case of transforming a commercial company into another company, KOWR has the right to acquire the property.