Buying a Polish sp. z o.o.: what due diligence and warranties should I insist on?

Dear Sir or Madam,

The transaction should begin with a thorough due diligence review of the company's status. Only after evaluating the company should the share purchase agreement be concluded to uncover hidden tax (tax filings, arrears certificates, litigation, contracts), employment liabilities (contracts, ZUS contributions, pending claims), and financial risks (accounts, supplier agreements).

The valuation of shares and the M&A transaction structure are determined based on the results of due diligence, as well as the intentions and objectives of the parties involved.

Each transaction requires an individual approach, as numerous variables influence the final content of the contractual provisions, necessitating the tailoring of adequate legal solutions to protect the investor.

Buying an existing sp. z o.o. is like buying a used car: it might look shiny, but you need to check under the hood. In Poland, a standard 'safety kit' for such a deal includes two main steps: Deep-Dive Due Diligence: We don't just look at the balance sheet. We verify 'clean' certificates from the Tax Office (US) and Social Insurance (ZUS), audit ongoing employment contracts, and check the court register (KRS) for any hidden litigation. Ironclad SPA (Agreement): If something pops up after the deal, you shouldn't be the one paying for the previous owners' mistakes. We include specific 'Representations & Warranties' clauses that hold the sellers financially liable for any undisclosed debts or tax arrears found post-closing. It’s all about shifting the risk from you back to the founders. We'd be happy to help you navigate these Polish specifics to ensure your investment is protected.