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Restructuring
A merger is the amalgamation of two or more incorporated or unincorporated businesses based on a merger agreement in order to form a single entity. Businesses can merge in two ways:
- one business takes over another and continues to exist, while the business taken over is dissolved. This form is known as an absorption merger.
- two businesses are dissolved and joined to form a new business. This is what is known as a consolidation merger.
Any trading businesses can merge with each other. Sole proprietorships, however, cannot merge with each other.
In a demerger, a company transfers all or part of its assets to one or more other companies. A demerger is a complex procedure that can fundamentally change the rights of the members of the participant companies. A company can be demerged by:
- dividing up all its assets and transferring them to other companies (division). The original company is dissolved and deleted from the Commercial Register;
- one or more parts of the assets are transferred to other companies. In this case, the original company continues to exist (spin-off)
Demergers are only permitted for limited companies and cooperatives in all their variants. General and limited partnerships, as well as sole proprietorships and associations cannot undergo a demerger.
A conversion is the process of changing the legal form of a incorporated or unincorporated business, whereby all the conditions relating to capital and membership remain the same. The current business continues to exist as the legal entity and preserves its economic and legal identity.
Conversions are permitted for any form of business provided the initial and target legal forms are compatible in their legal structures.
Conversions are permitted for any form of business provided the initial and target legal forms are compatible in their legal structures.
