The concept of acquisition and disposal of high-value assets, the procedure for acquisition, i.e. disposal of high-value assets, as well as the consequences of breaching provisions on the disposal of high-value assets, are regulated by the provisions of Articles 470 to 473 of the Companies Act. The cited provisions of the Companies Act apply to joint-stock companies, and they apply correspondingly to limited liability companies unless otherwise stipulated by the founding act of the limited liability company.
Concept of acquisition and disposal of high-value assets
If the company acquires, i.e. disposes of the assets, the purchase value and/or selling value and/or market value of which at the moment of rendering the relevant decision accounts for 30% or more of the book value of the total company’s assets presented in the latest annual balance sheet, it is deemed that the company acquires, i.e. disposes of the high-value assets.
It is deemed that the acquisition, i.e. disposal of high-value assets is the acquisition, i.e. disposal of assets in any manner, including, in particular, purchase, sale, lease, exchange, establishment of a lien or mortgage, conclusion of a credit facility and loan agreements, issuance of sureties and guarantees, and taking any other action that creates an obligation for the company.
Notwithstanding, it shall not be deemed that the purchase and sale of assets done within the scope of the company’s regular operation is the acquisition, i.e. disposal of high-value assets.
It is deemed that the assets, as per the provisions of the Companies Act, comprise tangible and intangible things and rights, including immovables, movables, cash, shares held in companies, securities, receivables, industrial property, and other rights.
A single acquisition, i.e. disposal, is also deemed to be several related acquisitions, i.e. disposals made in a period of one year, whereas the time of occurrence is deemed as the day on which the last acquisition, i.e. disposal, was made. Notwithstanding, one acquisition, i.e. disposal of high-value assets is not considered to be simultaneous institution of pledge right, mortgage or other means of security interest that the company yields in order to secure its commitment under a credit facility agreement, loan or other legal transaction, in which case the largest value of individual legal activity, i.e. legal transaction is taken as the value according to which the high-value assets are determined following the provisions of the Companies Act.
The related acquisition, i.e. disposal of high-value assets, shall include several individual transactions, i.e. legal activities that are undertaken in order to achieve the same goal, i.e. purpose or whose relation stems from the nature of the legal activity for the execution of which those legal transactions and legal activities are undertaken.
The acquisition, i.e. disposal of high-value assets, may be conducted if approved by the general meeting, in advance or subsequently.
If a company acquires, i.e. disposes of high-value assets, the provisions of the Companies Act governing the rights of dissenting shareholders apply mutatis mutandis.
Procedure of Acquisition, i.e. Disposal of High-Value Assets
The board of directors, i.e. the supervisory board, if the company has a two-tier management system, prepares a proposal of the decision by which the general meeting approves the acquisition, i.e. disposal of high-value assets, along with:
- An explanation containing the reasons for which adoption of that decision is recommended;
- A report on the conditions under which high-value assets are to be acquired, i.e. disposed of.
A draft agreement on the acquisition, i.e. disposal of high-value assets, constitutes an integral part of the files for the session of the general meeting at which the decision on approving the acquisition, i.e. disposal of high-value assets, is to be adopted. Notwithstanding, if the decision approves an already concluded agreement on the acquisition, i.e. disposal of high-value assets, such an agreement is submitted along with the files for the session of the general meeting at which the decision approving the acquisition, i.e. disposal of high-value assets, is to be adopted.
The general meeting passes a decision on approving the acquisition, i.e. disposal of high-value assets by a three-quarters majority of votes of the present stockholders with voting rights. Exceptionally, if the general meeting of a public joint stock company has made a decision on the approval of the acquisition, i.e. disposal of, high value assets for the conclusion of a public contract in accordance with the regulations governing public-private partnership and concessions, for modifications of the concluded public contract that are performed in accordance with the procedure and the restrictions for amending the public contract according to the regulations governing public-private partnership and concessions, it is not necessary to pass a new decision on acquiring, i.e. disposing of high value assets.
For the conclusion of a direct contract in accordance with the regulations governing public-private partnerships and concessions, the general meeting of a public joint stock company does not pass a decision on acquiring, i.e. disposing of high-value assets.
Consequences of the Breach of Provisions on Disposal of High-Value Assets
If approval was not obtained in accordance with the provisions of the Companies Act, the company and the stockholder who holds or represents at least 5% of the company’s share capital may file an action to annul the legal transaction or legal activity of acquisition, i.e. disposal of high-value assets, provided that he held or represented at least 5% of the company’s share capital on the day of conclusion of that legal transaction, i.e. legal activity. Notwithstanding, the legal transaction, i.e. the action shall not be annulled if the person who is the other party in the transaction, i.e. towards whom the action was taken was neither aware nor had to be aware of the breach of the provisions of the Companies Act which regulates procedure of acquisition, i.e. disposal of, high value assets at the time the legal transaction was concluded, i.e. the legal action was taken.
The members of the board of directors, i.e. the members of the supervisory board, if the company has a two-tier management system, are jointly and severally liable to the company for any damage sustained by that company due to the acquisition, i.e. disposal of high-value assets, if such acquisition, i.e. disposal was carried out without a decision of the general meeting approving it.
The company and the stockholder who holds or represents at least 5% of the company’s share capital may file an action for compensation of damages against the members of the board of directors, i.e. the members of the supervisory board, if the company has a two-tier management system.
The action to annul the legal transaction or legal activity of acquisition, i.e. disposal of high-value assets and the action for compensation of damages against the members of the board of directors, i.e. the members of the supervisory board, if the company has a two-tier management system may be filed within six months from the day when the session of the general meeting was held in which a subject of analysis was the report on the business operations for the business year in which the acquisition, i.e. disposal of high-value assets was executed, and at the latest within three years from the day of acquisition, i.e. disposal of high-value assets.
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