POLAND Law and Practice Contributed by: Piotr Augustyniak, Nash Concept Ltd
4. Family Business Planning 4.1 Asset Protection
and voting arrangements; share preference as to votes; shareholders’ agreements binding the family; and, increasingly, family constitutions which, though not legally enforceable, are given partial legal effect by being reflected in the foundation’s statute and in the companies’ constitutional documents. For unin - corporated businesses, succession administration keeps the enterprise alive after the owner’s death while the heirs organise themselves. The combina - tion of these instruments with the zachowek mitigation tools described in 2.3 Forced Heirship Laws – renun - ciations, instalments, and the crediting of foundation benefits – enables concentration of a business on a chosen successor without inviting litigation. 4.3 Transfer of Partial Interest Polish law contains no codified system of valua - tion discounts. The inheritance and donation tax is assessed on the market value of the acquired rights, determined according to average prices for rights of the same kind and degree of wear; for minority share - holdings in private companies there is no statutory instruction to discount for lack of control or market - ability, and the administration’s starting point is fre - quently a pro-rata share of the value of the underlying enterprise. In practice, professionally prepared valuations do reflect the characteristics of the specific interest – minority position, transfer restrictions, absence of a market – and such features are accepted by the authorities and the courts as elements of market value rather than as discounts in the American sense, pro - vided they are substantiated rather than asserted. The taxpayer declares the value; the authority may chal - lenge it and, in the event of a material divergence, appoint an expert at the taxpayer’s cost, which gives well-founded appraisals considerable practical weight. Within the immediate family the question is usually moot, the exemption applying regardless of value.
Two instruments dominate asset protection planning. The first is the marital property agreement establishing separation of property, routinely adopted by entrepre - neurs so that business risk does not reach the family estate; its limitation is that it may be invoked against a creditor only where the creditor knew of the agree - ment, which in practice means disclosure in contrac - tual dealings. The second is the family foundation: assets contributed to it leave the founder’s estate and are, in principle, beyond the reach of the founder’s future creditors, while the foundation itself answers jointly for the founder’s obligations that arose before the contribution, up to the value of the assets received, and without limitation for the founder’s maintenance obligations. The limits are those of general civil and insolvency law. Transfers made to the detriment of creditors may be set aside under the actio pauliana within five years, and shorter claw-back periods apply in bankruptcy; protection is therefore a function of timing, and struc - tures created in fair weather are respected while those created in view of an approaching claim are not. Cor - porate vehicles – above all the limited liability compa - ny – complete the toolkit for operational risk, subject to the personal liability of management board mem - bers for the company’s obligations where insolvency filings are delayed. 4.2 Succession Planning The contemporary standard is a holding architecture crowned by a family foundation: operating companies are consolidated under a holding company, the shares of which are contributed to the foundation, whose statute then determines the succession of economic benefit (through beneficiary entitlements) separately from the succession of control (through the composi - tion of the board and the assembly of beneficiaries). The founder typically retains influence during his or her lifetime through board membership and reserved statutory powers, with the statute prescribing the gov - ernance that takes effect on death or incapacity. Alongside the foundation, familiar techniques remain in use: donations of shares with retained usufruct
5. Wealth Disputes 5.1 Trends Driving Disputes
The dominant category is the zachowek claim, whose incidence has increased with asset prices: the appre -
542 CHAMBERS.COM
Powered by FlippingBook