Conversion of the legal form - these are the things you need to consider

The transformation of legal form allows the change of a company's legal form. In addition to provisions on changing the legal form, the merger law also contains provisions on division and asset transfer.

Transformation of Legal Form

The merger law provides for the transformation of legal form in Article 53. The permissible transformations are listed in Art. 54. For example, it is permissible for a GmbH (limited liability company) to be transformed into an AG (joint-stock company). For a capital company, there is the possibility to transform into another capital company or a cooperative. For a general partnership, there is the possibility to transform it into a capital company, a cooperative, or a limited partnership. The limited partnership can be transformed into a capital company, a cooperative or a general partnership. For the cooperative, there is the possibility of transformation into a capital company or an association.

What is Needed?

The reason for the change of legal form is that the previously used legal entity is no longer suitable for the current situation. With the merger law, it is now possible to make a change of the legal form without needing to carry out a liquidation. In the event of a liquidation, tax-related disadvantages could arise. The transformation procedure is similar to that for mergers and divisions. The following documents are necessary for a transformation:

• Creation of a written transformation plan
• Review of the transformation plan by a licensed audit expert
• Adoption of the transformation resolution by the general meeting or the shareholders' meeting
• Public notarization of the transformation resolution
• Registration in the commercial register

The transformation is a process that can take several months. This is because the creation and examination of the necessary documents and the convening and execution of a general meeting take some time.

   
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