Company Recapitalisation

GJW Gramza i Wspólnicy provides legal assistance in matters related to company recapitalisation, supporting clients in planning and implementing processes aimed at strengthening a company’s financial position and adapting its capital structure to the needs of its business, development, or reorganisation.

We advise shareholders, stockholders, management boards, investors, and financing entities on matters concerning share capital increases, additional contributions, the issue of new shares, debt-to-equity conversions, as well as other forms of providing a company with the funds necessary for its continued operation or the achievement of specific business objectives.

We provide legal support throughout the company recapitalisation process at every stage of a business’s or project’s development — from bridge financing and growth rounds to restructuring transactions and the streamlining of the capital structure prior to M&A. Company recapitalisation is a broader concept and is not limited merely to the transfer of funds to the company’s bank account. In practice, the key issues are the proper structuring of share rights, anti-dilution protection, the regulation of exit arrangements, and the elimination of the risks of invalid resolutions, defective valuation of in-kind contributions, or infringement of minority rights. For this reason, we combine transaction structuring with corporate discipline: completeness of resolutions, proper procedures, and consistency of registration documents.

Company recapitalisation – share capital increase and legal support for companies

The scope of our services includes in particular:

• selecting and implementing the recapitalisation model: share capital increase, additional contributions, in-kind contributions, issue of new shares, hybrid financing (e.g. convertible instruments — from a corporate law perspective),

• preparing and negotiating documentation: term sheet, investment agreement, SHA (shareholders’ agreement), amendments to the articles of association/by-laws, resolutions, and implementing documents,

• comprehensive support in share capital increases in limited liability companies and joint-stock companies (procedure, pre-emption/subscription rights, exclusions, subscriptions, assumption and payment),

• designing anti-dilution mechanisms and the economics of the transaction: preference rights, preference shares, liquidation preferences, ratchets — within the limits of permissible corporate structures,

• regulating post-investment corporate governance: composition and powers of corporate bodies, information rights, veto matters, quorum, and decision-making rules,

• preparing solutions for investors and shareholders: lock-up, vesting, good/bad leaver, drag-along/tag-along, call/put — while ensuring consistency with the articles of association/by-laws,

• supporting recapitalisations through in-kind contributions (aports), including analysis of legal title to assets and the corporate risks related to valuation,

• handling processes involving multiple shareholders, including resolving conflicts concerning pre-emption rights, dilution, and unequal participation in financing,

• preparing and coordinating the filing of documents with the National Court Register (KRS) (applications, consolidated text, appendices), as well as support with notarial acts,

• advising in “crisis” situations: recapitalisation in conditions of loss of liquidity, risk of insolvency, or in the course of restructuring — in the corporate law aspect.

Compliance with the Commercial Companies Code and analysis of tax costs

We ensure that the recapitalisation process is fully compliant with the applicable laws and the company’s internal regulations, thereby eliminating the risk of invalid resolutions or their effective challenge by minority shareholders. At the client’s request, we also carry out an analysis of tax consequences, with a view to minimising the burden of civil law transaction tax (PCC) and corporate income tax (CIT).

Our approach

When structuring a recapitalisation, we begin by addressing the questions that determine the security and value of the transaction: who is contributing the funds, for what purpose, and on what terms; how to limit disputes over control; which mechanisms protect the investor while allowing the company to operate without decision-making paralysis; and how to embed the entire structure in procedures that will prove resilient in the course of corporate and registration review.

As a law firm specialising in corporate law, we carry out recapitalisations in an orderly and secure manner, taking into account both the interests of shareholders and regulatory requirements. Our lawyers focus on ensuring that: