Restructuring a company: The Merger

A merger is the contractually agreed consolidation of two or more companies into a single entity. The assets and liabilities are transferred through universal succession.

The Merger

A merger is a dissolution without the need for liquidation. At least one company is thus dissolved and transferred into another, but not liquidated. Both assets and liabilities as well as rights and obligations are transferred to the acquiring company. Membership continuity is also maintained, meaning that membership rights continue seamlessly and are transferred to the new company.

Various Types

Various types are to be differentiated. In an absorption, one company acquires one or more other companies. In a combination, the companies are united in a newly founded company. The existing companies thereby cease to exist. Legal qualifications differ, however, for quasi-mergers and pseudo-mergers.

Regular Procedure

The merger agreement is of high importance, its contents are clearly prescribed by law. In addition, the agreement needs the approval of the general meeting or the shareholders. It is drafted by the highest management or administrative body. Additionally, a merger report must be prepared. Both the report and the agreement must then be audited by an authorized audit expert, provided the acquiring company is a cooperative, a limited liability company, or a corporation.

For the merger, the consent of the general meeting or the shareholders is ultimately necessary, which also must be officially notarized. With the entry in the commercial register, the merger becomes legally effective.

   
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