Company merger

 According to the Commercial Companies Code, a merger can be done in two ways. The first method is a consolidation by way of acquisition, that is, the acquired company transfers all its property to another company (acquiring), in exchange for shares that the acquiring company issues to the partners of the acquired company. The second option is a merger by creating a new business entity, to which the property of all merging companies is transferred for shares of the newly founded companies. A business company (limited liability company) can merge with each other and with partnerships (general partnership, limited partnership), however, the partnership cannot be an acquiring or a new company.

 First of all, a merger plan should be, which is the result of a written agreement between the merging companies and must be submitted to the National Court Register with attachments such as: draft of resolutions on a merger of the companies, draft amendments to the statute of the acquiring company, or a draft statute of a new companies, determining the value of the assets of the acquired company or newly founded companies, as of a certain day. It is also necessary to add a statement containing information on the financial condition of the company prepared for the purpose of the merger using the same form as the last annual balance sheet.

When submitting the merger plan, an expert is appointed to review the merger plan. The expert, within the time period established by the court, but not more than two months from the date of his appointment, must prepare a detailed opinion and submit it to the registration court and management board of the merged companies. However, if all partners of each company agree to merge, then an audit of the merger plan and its conclusion is not required.

The plan for the merger should be announced no later than one month before the date of the shareholders'  meeting or general meeting at which the merger is to be decided. This provision does not apply to a company that, posts a publicly available merger plan on its website. But no later than one month before the meeting.

Each of the merging companies prepares a report on the merger, presenting its legal and economic basis, how the exchange of shares between the companies takes place and the amount of additional payments. Difficulties with the valuation of shares should be indicated in the report. If all partners of each company agree, the report is not required.

The management board of the merging companies must notify the partners twice about the merger. The first notification should be made no later than one month before the planned date of the merger, and the second one in two weeks from the first notification. The merger of companies requires a resolution of the shareholders' meeting or the general meeting of each of the merging companies, by a majority of three-fourths of votes, representing at least half of the share capital. The resolution on the merger should be included in the notary's report and should include the consent to the merger plan, as well as the proposed amendments to the agreement or statute of the acquiring company, or the agreement or statute of the newly founded companies.

There is also a simplified merger procedure for limited liability companies whose shareholders are only natural persons in the number not exceeding 10 (in total in all companies). In such a case, if all the partners agree, the provisions on announcing a merger plan, examining the plan by an expert and notifying the shareholders twice by the management board of the intention to merge shall not apply. acquiring company or the company being acquired

The management board of each of the merging companies should submit to the registry court a resolution on the merger of the company, indicating whether the acquiring company or the company being acquired. If the registration courts are located in different places, the registration court competent according to the registered office of the acquiring company or the newly founded companies shall notify the registration court competent according to the registered office of the acquired company or companies merging by establishing a new company about its decision to enter the merger in the register.

The consolidate companies or the merging companies shall be dissolved, without liquidation proceedings, on the day of removal from the register. From the moment of the merger, the partners of the acquired company become partners of the company being acquired or new company. The merger takes place on the day the merger is entered in National Court Register.

The acquiring or the newly founded enters into all the rights and obligations of the acquired company. Permits, concessions, and benefits must be transferred on the day of the merger. This rule does not apply to permits and concessions granted to a financial institution, if the authority that issued the permit or granted the concession filed an objection within one month from the date of publication of the merger plan. Disclosure of rights in the land cadastre is made at the request of the acquiring company or the newly formed company.