Selling a pharmacy is one of the most complex transactions at the intersection of civil and administrative law. The restrictions of the "Pharmacy for the Pharmacist" act have significantly hampered market turnover, but the latest rulings of the Supreme Administrative Court (NSA) from 2022 have given entrepreneurs new hope and opportunities. We explain how to sell shares in practice, sell an organised part of an enterprise, and who can actually legally buy an "old" pharmacy today.
💡 Key takeaways
- For a pharmacy run as a sole proprietorship, the only way is sale of a business as a going concernwhich, in view of Article 554 KC generates a joint and several liability risk for the buyer concerning the seller's debts – hence the importance of a thorough legal and financial audit. due diligence.
- For limited liability companies and general/limited partnerships, instead of selling the business, one can carry out a so-called Share sale or transfer of all rights and obligations partner.
- Groundbreaking rulings by the Supreme Administrative Court (NSA) of 24 February 2022 confirmed that "old" pharmacies (which obtained a permit before 2017) can be acquired and taken over by Non-pharmaceutical entitiesand the "Pharmacy for Pharmacist" regulations do not apply to them.
The decision on how to dispose of a pharmacy (selling the business versus selling shares) has significant tax consequences and determines the risk of the buyer being drawn into the previous owner's debt spiral.
How to sell a pharmacy? – Part II (after NSA rulings)
This is a continuation of our guide for pharmacy owners. The first part, describing the administrative procedure and changes to WIF permits, you will find it at this link.
Permissible forms of pharmaceutical business operation
The disposal of a pharmacy is dependent on the organisational form of its owner, which is determined by the date the owner obtained their licence (WIF permit).
Current regulations (for pharmacists only)
In accordance with Article 99(4) of the Pharmaceutical Law, following the entry into force of the "Pharmacy for Pharmacists" (AdA) regulation, a licence for a NEW pharmacy may only be obtained by: Pharmacist proprietor (sole trader) or General partnership / partnership in which all partners without exception are pharmacists.
Old legal status
Before 25 June 2017, entities also successfully established limited partnerships, individuals without qualifications, and limited liability companies (sp. z o.o.). They still exist in the pharmacy trading market today.
Ways of selling a pharmacy depending on the type of entity
Sole Proprietorship
A sole trader essentially has only one option – disposal of an enterprise or its organised part (ZCP) Pursuant to Article 551 KC. This transaction is subject to the risk of joint and several liability of the buyer (Article 554 KC). The disposal includes assets, goods, agreements (e.g. with the National Health Fund) and the aforementioned permissionwhich, however, must undergo an administrative transfer procedure by the Provincial Pharmaceutical Inspectorate. The transaction requires the rigor of written form with notarised signatures (or the form of a notarial deed if the property is part of the estate).
Partnerships (General Partnership, Partnership, Limited Partnership)
Two transaction regimes operate here:
- Sale of a pharmacy as a business An identical construction to the JDG case. It allows the company to get rid of one of its branches, whilst still operating the remaining pharmacies.
- Sale of a partner's rights and obligations The solution chosen when wishing to exit the business entirely (Article 10 of the Commercial Companies Code). This leads to a change in the company's ownership structure, while the pharmacy as such continues to operate under the unchanged name. This operation requires an examination of the company agreement itself and the written consent of the remaining partners.
Limited Liability Company (Old Licences)
When the owner of an "old" pharmacy runs it in the form of a limited liability company, they have the option to carry out a classic, widely used business transaction known as a "Share Deal", that is sale of shares in the company's share capitalThe seller of shares exits the investment, the buyer acquires control of the company's management, and the pharmacy business itself (and the WIF permit it owns) remains intact.
Who can currently buy a pharmacy? (NSA rulings)
Reading the new provisions of the Pharmaceutical Law, one could have had the brutal impression that only a narrow group of authorised pharmacists can buy every pharmacy today. For years, officials blocked ownership changes, citing the AdA.
Meanwhile, on 24 February 2022, the Supreme Administrative Court issued fundamental judgments (files nos. II GSK 477/20 and II GSK 384/20) which demolish the inspectorates' narrative. The Supreme Administrative Court finally confirmed that "A Pharmacy for Pharmacists" doesn't work backwards, which is why the requirements of Article 99(4) (being a pharmacist) Do not apply for the transfer of pharmacies that obtained licences before 25 June 2017. Thanks to this, within the framework of the disposal of a company / shares / an old licence, a non-pharmaceutical entity can legally purchase an "old pharmacy" under the previous investment rules.