The act to suspend the sale of real estate of the State Treasury’s Agricultural Property Resources and on the amendment of certain acts is waiting for the President's signature. For business, the most important changes will be those introduced in the act on shaping the agricultural system (i.e. Journal of Laws of 2012 item 803): The most important effect of the new law will be the reduction in trade of agricultural land. With exceptions provided for in the amended act on shaping the agricultural system, agricultural land will be able to be acquired only by individual farmers, i.e. natural persons who are owners, perpetual users, possessors or tenants of agricultural real estate, whose total area of ​​agricultural land is not more than 300 ha, having the right qualifications and living in the gmina at least 5 years, where one of the properties is located which is included as part of the agricultural holding.

From the point of view of partners and the shareholders of commercial companies, the most important elements of the amendment, however, are the introduction of the right of first refusal of the Agricultural Property Agency (Agencja Nieruchomości Rolnych - ANR) in relation to the stocks and shares of commercial companies and its powers to submit a statement about the acquisition of land in the case of division, transformation or merging such companies

Additionally, in accordance with art. 9 sec. 1 point 1 of the amended act on shaping the agricultural system, as a result of which an agricultural property is purchased without notifying ANR. Therefore, this raises the question of at which point of the transformation should such a notification take place, so as not to expose oneself to the accusation of invalidity

Resolution or entry 

Notifying the ANR seems to be acceptable at the stage of preparing a transformation, division or merger plan. It is in fact the earliest moment at which the plans of companies’ management boards take the form of a formal document. Another possibility is to notify the ANR immediately prior to passing resolutions for the transformation. In this case, the board would inform those present at the shareholders' meeting that all the formalities related to the trade in agricultural property, required for the valid adoption of the resolution, have been preserved. Favorable for such a solution is the fact that the adoption of appropriate resolutions is the confirmation of the transformation process of companies that previously took place only in the managerial area. If the ANR would be interested in exercising its powers conferred upon it by the act on shaping the agricultural system, it should take appropriate action.

By adopting a literal interpretation of the amended act on shaping the agricultural system, it should be noted, however, that the right of the ANR is updated only after the acquisition of agricultural property as a result of the division, transformation or merger of commercial companies. Considering that, in accordance with the provisions of the Code of Commercial Companies, the merger, transformation or division takes place only at the moment of entry of this event to the register, the obligation to notify the ANR would occur only after entering the corresponding changes to the register. Immediately after obtaining information about the registration of changes in the National Court Register, this company should notify the ANR that it has acquired agricultural land.

This solution raises serious concerns in the context of sanctions of the invalidity of a legal action concluded without notifying the ANR. A resolution on the merger, division or transformation of a company should be recognized as a legal action which is the basis for the merger. In a situation where notifying the ANR takes place after this transformation, there is a risk of recognizing that legal action in the form of a resolution took place without such notification. And as such is invalid.

No-one’s land 

The matter is additionally complicated by the inconsistency of the act on shaping the agricultural system in the scope of legal consequences of actions contrary to the provisions of the act. On the one hand, the act states that only the purchase of the property is invalid; on the other hand, it indicates that performing the merger, division or transformation without notifying the ANR is invalid. However, if we were to assume that under the merger or transformation of the company only the purchase of land by the acquiring or transformed company is invalid (if we can even talk about purchasing property by the transformed company), it would turn out that after entering the merger or transformation in the register, the agricultural property was not included in the general succession. However, since the merger or transformation cannot take place without deleting the transformed company or acquired company from the register, it would turn out that the owner of the agricultural property is a non-existent company. The land would belong to nobody. This is an unacceptable situation; therefore, it is more likely that the entire merger or transformation would be covered by the invalidity. With the exception of division by separation, the same effect can also be talked about in the case of the division of companies. Contrary to the literal interpretation of the amended act on shaping the agricultural system, it should be assumed that notifying the ANR should take place prior to taking resolutions on the merger or division.

Another debatable issue related to the amendment is the issue of applying the new regulations to situations in which the resolutions on the merger, transformation or division will be taken before the entry into force of the amendment, but the registration of changes occurs after 30 April 2016. It seems that the legislator in the transitional provisions did not foresee the possibility of such actual state. In accordance with the principle of direct effect of the new act, in the absence of other regulations the new rules should be applied to examine the legal situation. This raises the risk that registration courts will unduly overrule such requests for registration or call to supplement them with documents confirming that the ANR was informed in accordance with the provisions of the amended act on shaping the agricultural system.

Karolina Turko, trainee advocate
Bartłomiej Woźniak, trainee advocate