A classic demerger is an operation whereby, after being wound up, but without going into liquidation, the divided entity (a company or cooperative) ceases to exist, and its business assets are either transferred to a newly incorporated successor company (demerger by formation of new companies), or to an existing successor company (demerger by acquisition). Combination of both types of demergers is also admissible.
Demerger by spin-off is an operation whereby, after being wound up, but without going into liquidation, an entity being split (a company or cooperative) will not be wound-up or cease to exist, but some of its assets will be transferred to a newly formed or already existing successor company. The first case is called spin-off connected with the formation of new companies, the other one is called spin-off connected with acquisition. Combination of both types of spin-offs is also admissible.
A classic demerger means that the ownership stakes of the partners in the divided entity will cease to exist, and, the partners, as a rule, acquire ownership stakes in all successor companies. Under the demerger by spin-off, the entity being divided will not cease to exist. The partners will hold their current ownership stakes in the entity being divided, and, as a rule, will acquire ownership stakes in the successor companies.
The process under which the company is being divided is based on a demerger project, which stipulates, among others, the record date of the demerger (i.e. the day from which the acts of the entity being divided shall be deemed, from the accounting point of view, the acts of the successor company), and the split ratio, that determines the ownership stake of the partners in the entity being divided in the successor companies, and the value of assets of the entity being divided to be transferred to individual successor companies.
The division project must be reviewed by a court-appointed split 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 division shall become effective on the day of its registration into the Commercial Register, and becomes final and non-appealable as of this day.
Továrek, Horký a partneři, advokátní kancelář, s.r.o., provides its clients with all necessary documents and support to accomplish any type of the above-mentioned divisions. The client is given assistance from the very beginning of the process when determining the value of assets to be transferred to the successor company, cooperating with experts, formulating and developing the demerger project and the report on the conversion of the company. The support includes organization of the General Meeting regarding the demerger, representation in the registration proceedings and provision of all necessary support services for subsequent administrative actions.
Demerger by spin-off is an operation whereby, after being wound up, but without going into liquidation, an entity being split (a company or cooperative) will not be wound-up or cease to exist, but some of its assets will be transferred to a newly formed or already existing successor company. The first case is called spin-off connected with the formation of new companies, the other one is called spin-off connected with acquisition. Combination of both types of spin-offs is also admissible.
A classic demerger means that the ownership stakes of the partners in the divided entity will cease to exist, and, the partners, as a rule, acquire ownership stakes in all successor companies. Under the demerger by spin-off, the entity being divided will not cease to exist. The partners will hold their current ownership stakes in the entity being divided, and, as a rule, will acquire ownership stakes in the successor companies.
The process under which the company is being divided is based on a demerger project, which stipulates, among others, the record date of the demerger (i.e. the day from which the acts of the entity being divided shall be deemed, from the accounting point of view, the acts of the successor company), and the split ratio, that determines the ownership stake of the partners in the entity being divided in the successor companies, and the value of assets of the entity being divided to be transferred to individual successor companies.
The division project must be reviewed by a court-appointed split 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 division shall become effective on the day of its registration into the Commercial Register, and becomes final and non-appealable as of this day.
Továrek, Horký a partneři, advokátní kancelář, s.r.o., provides its clients with all necessary documents and support to accomplish any type of the above-mentioned divisions. The client is given assistance from the very beginning of the process when determining the value of assets to be transferred to the successor company, cooperating with experts, formulating and developing the demerger project and the report on the conversion of the company. The support includes organization of the General Meeting regarding the demerger, representation in the registration proceedings and provision of all necessary support services for subsequent administrative actions.