Protection of creditors in the outbound cross-border conversion of a Polish company

The aim of this article is to find an optimal solution as regards protection of creditors in case of transfer of the Polish company's seat abroad with an attendant change of its legal form. The considerations are carried out primarily from the perspective of the potential benefits and threats that this operation can bring to the creditors. It is follows from the Court of Justice of European Union (CJE U) that in the absence of EU legislation each Member State is obliged to provide proper measures to effectuate rights enshrined within EU primary law. While adoption of the cross-border transfer of company's seat is still under the consideration, the CJE U stated in the Cartesio and confirmed in the Vale rulings that the right to cross-border conversion of the company might be construed from the freedom of establishment. In current state of Polish company law, there are no special provisions referring to cross-border conversion of a company. Therefore, one should consider per analogy all other regulations related to the company's restructuring processes, such as mergers, divisions and transformations. Since in this area Polish provisions are chaotic, problematic in interpretation and ineffective in practice, one may encounter it as very difficult task to reconstruct a proper and comprehensive legal framework. The article analyzes the potential solution to this issue and attempts to answer the question what legal steps the legislature should address to cut down potential controversy that may arose upon the cross-border operation in the future