AKMV Company Merger – Legal Advice
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If you are interested in a merger, consolidation, or division of companies, please contact us at office@akmv.sk, and we will get back to you promptly.
As of March 1, 2024, Act No. 309/2023 Coll. on Transformations of Commercial Companies and Cooperatives and on Amendments and Supplements to Certain Laws is in effect. Therefore, the previous answer to this question is no longer in accordance with the current legislation. You can read about the updated regulations in our article on transformations of commercial companies and cooperatives.
QUESTION
I have two companies, both limited liability companies (s.r.o.). One is almost unused and has no debts. I want to merge it into the other. What is the procedure for the merger? What should I watch out for, especially regarding deadlines?
ANSWER:
Before signing the merger decision, the dissolving company must notify the tax administrator of the intention to merge the company (preparation of the merger agreement draft) no later than 60 days before the date of the general meeting that is to decide on the approval of the merger agreement draft. Therefore, it is necessary to consider that the registration of the merger in the commercial register may only take place after this deadline has passed.
It is also necessary to arrange for the preparation of an auditor’s report, which will confirm that the value of the liabilities of the successor company does not exceed the value of its assets. The auditor’s report must be attached to the proposal submitted to the commercial register. The auditor prepares it after the shareholders’ decision on the merger is adopted and before submitting the proposal for the registration of the merger. The decision will be made only after the above-mentioned 60-day period has elapsed.
“After the adoption of the decision of the shareholders or the relevant bodies of the involved companies on the merger, consolidation, or division of the company and before submitting the proposal for the registration of the merger, consolidation, or division of the company, the auditor appointed in the approved merger agreement, consolidation agreement, or approved division project prepares a report on the findings, certifying that, assuming the status of the involved companies as of the date according to paragraph 6 letter d), the conditions according to paragraph 11 letter a) will be met. If the dissolving company is a company that is not required to have its financial statements audited by an auditor, the report also includes the auditor’s certification that the receivables and liabilities of the dissolving company correspond to the economic reality as of the day preceding the date according to paragraph 6 letter d). The auditor’s report on the findings is attached to the proposal for registration in the commercial register for the purpose of certifying the facts under paragraph 11 letter a).”At the same time, we emphasize that on the effective date of the merger, consolidation, or division of the company:
The value of the liabilities of the successor company must not exceed the value of its assets; however, the amount of liabilities connected with subordinated debt is not included in the liabilities.
Neither the successor company nor the dissolving company may be in liquidation.
The effects of bankruptcy declaration may not apply to the successor or dissolving company unless the bankruptcy estate administrator consents to the merger, consolidation, or division.
The effects of the initiation of restructuring proceedings or permission of restructuring may not apply to the successor or dissolving company.
No proceedings for dissolution may be pending against the successor or dissolving company, nor may they be dissolved by the court or based on a court decision.
We have also informed about the procedure of company mergers in our article, which remains up-to-date.
JUDr. Veronika Michalíková, MBA