From the economic point of view, a merger is a tool to join assets and liabilities of previously separate companies or cooperatives.
A merger may be accomplished in one of the following ways: a merger by acquisition, meaning the operation whereby one or more entities (a company or cooperative) are wound up without going into liquidation and transfer to another all their assets and liabilities; or a merger by the formation of a new company, meaning the operation whereby several companies are wound up without going into liquidation and transfer to a company that they set up all their assets and liabilities. In both cases the partners of the merging companies usually become partners in the successor company.
If only companies or cooperatives with the registered seats in the Czech Republic are involved in the merger, it is a domestic merger; if one or more foreign entities are involved in the merger of domestic companies, it is a cross-border merger.
A cross-border merger enables to change the status of a party, and, thus, a change in tax domicile of the successor company within the framework of member states of the E.U. This can be achieved by transferring the registered seat of the successor company to another member state than the one in which its registered seat was located so far, and by whose system of law the successor company was governed until now.
The key document, on the basis of which the merging process is carried out, is the merger project to be prepared by the statutory bodies of the participating companies or cooperatives. The document stipulates, among others, the record date of the merger (i.e. the day from which the acts of the company being wound-up shall be deemed, from the accounting point of view, the acts of the successor company), and the merger ratio that determines the ownership stake of the partners in company being wound-up in the successor company.
The merger project must be reviewed by a court-appointed merger expert, and after its filing in the Collection of Deeds, it must be approved by the General Meeting or similar company bodies of the involved companies. The merger shall become effective on the day of its registration into the Commercial Register, and becomes final and non-appealable as of this day. The merging process may be considerably simplified by beneficial arrangement of the relations between the merging entities.
Továrek, Horký a partneři, advokátní kancelář, s.r.o., provides its clients with comprehensive advice for all types of mergers, ensuring all necessary documents and acts, ranging from legal representation in the proceedings regarding the appointment of a merger expert, cooperation with experts and statutory bodies of all participating entities, formulation and development of the merger project in accordance with the client’s needs, and organization of general meetings, to representation in the registration proceedings and subsequent administrative actions. THT can recommend its clients an appropriate economic model for the merging process, including time schedule for individual sub-steps so that the whole merging process is cost-effective, and, perhaps, giving access to tax optimization.
A merger may be accomplished in one of the following ways: a merger by acquisition, meaning the operation whereby one or more entities (a company or cooperative) are wound up without going into liquidation and transfer to another all their assets and liabilities; or a merger by the formation of a new company, meaning the operation whereby several companies are wound up without going into liquidation and transfer to a company that they set up all their assets and liabilities. In both cases the partners of the merging companies usually become partners in the successor company.
If only companies or cooperatives with the registered seats in the Czech Republic are involved in the merger, it is a domestic merger; if one or more foreign entities are involved in the merger of domestic companies, it is a cross-border merger.
A cross-border merger enables to change the status of a party, and, thus, a change in tax domicile of the successor company within the framework of member states of the E.U. This can be achieved by transferring the registered seat of the successor company to another member state than the one in which its registered seat was located so far, and by whose system of law the successor company was governed until now.
The key document, on the basis of which the merging process is carried out, is the merger project to be prepared by the statutory bodies of the participating companies or cooperatives. The document stipulates, among others, the record date of the merger (i.e. the day from which the acts of the company being wound-up shall be deemed, from the accounting point of view, the acts of the successor company), and the merger ratio that determines the ownership stake of the partners in company being wound-up in the successor company.
The merger project must be reviewed by a court-appointed merger expert, and after its filing in the Collection of Deeds, it must be approved by the General Meeting or similar company bodies of the involved companies. The merger shall become effective on the day of its registration into the Commercial Register, and becomes final and non-appealable as of this day. The merging process may be considerably simplified by beneficial arrangement of the relations between the merging entities.
Továrek, Horký a partneři, advokátní kancelář, s.r.o., provides its clients with comprehensive advice for all types of mergers, ensuring all necessary documents and acts, ranging from legal representation in the proceedings regarding the appointment of a merger expert, cooperation with experts and statutory bodies of all participating entities, formulation and development of the merger project in accordance with the client’s needs, and organization of general meetings, to representation in the registration proceedings and subsequent administrative actions. THT can recommend its clients an appropriate economic model for the merging process, including time schedule for individual sub-steps so that the whole merging process is cost-effective, and, perhaps, giving access to tax optimization.