Enterprise 21/07/2023
Business mergers are a very popular form of M&A today. The form of merger is chosen by many businesses to increase their competitiveness in the business environment. The following article will analyze regulations on business merger procedures. If you have any questions, please contact immediately Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline - 0903.419.479 for legal advice and support.
Business merger is a form of business reorganization. Accordingly, the fact that one or several companies of the same type may merge into another company by transferring all assets; rights and obligations along with legitimate interests to the merging company; terminate the operations of the merged company.
This can be understood as a transaction in which the merged enterprise gives up its legal status to join another enterprise. The merged enterprise will inherit all rights; obligations and legitimate interests of the merged enterprise; At the same time, the merged company also ceases to exist.
Procedures for merging businesses
It is important to distinguish between merger and consolidation. Accordingly, business consolidation is also a form of enterprise reorganization; However, consolidation is different from a merger in that the companies merge to create a new company and terminate the activities of the consolidated companies to bring mutual benefits to all the consolidated businesses. The new company is the only entity inheriting all rights; obligations and legitimate interests of the companies performing the consolidation.
- Step 1. Prepare legal documents
The related companies prepare the merger contract and draft the charter of the merging company.
The merger contract must include the following main contents:
- Step 2. Approving the merger contract
Members; company owner; shareholders of related companies through the merger agreement; Charter of the merging company and conducting business registration of the merging company in accordance with the law on enterprises.
The merger contract must be sent to all creditors and notified to employees within 15 days; from the date of its adoption.
- Step 3. Register to change business registration content
When merging a; some company into another company; The application for registration of changes in business registration contents of the merging company must contain the corresponding papers specified in Chapter VI of Decree 01/2021/ND-CP and the following papers:
Note: After receiving the enterprise registration dossier; Business Registration Office awarded the Receipt; check the validity of the application and issue the Certificate of Business Registration; Certificate of change of business registration contents for enterprises.
- Step 4. Terminate the merged company
After the merger of an enterprise, the enterprise registration contents of the merging company do not change; within 10 working days from the date of completion of the merger; the merging company sends a written notice to the Business Registration Office where the merging company is headquartered to terminate the existence of the merged company. The notice must be enclosed with the papers specified at Points a and b, Clause 2, Article 61 of Decree No. 01/2021/ND-CP.
In case the merged company has its head office located outside the province; the city directly under the central government where the head office of the merged company is located; The Business Registration Office where the merged company sends information to the Business Registration Office where the merged head office of company is located to terminate the existence of these companies in the National Database. information on business registration according to the process on the National Information System on Business Registration.
The Business Registration Office terminates the existence of branch; representative office; business locations of the merged company before the termination of their existence in the National Database of Business Registrations according to the process on the National Information System on Business Registration.
For the merged company: After the merging company registers its business; merged company ceases to exist.
For the merged company: To enjoy legal rights and interests; responsible for the obligations; unpaid debts; labor contract and other property obligations of the merged company under the merger contract.
- Tax obligation
After the merging company is granted business registration; the merged company changes to the merged legal status. The Business Registration Office where the merged company is headquartered shall send information to the tax authority. The tax authority is responsible for sending information to the Business Registration Office about the completion of the final settlement and the transfer of tax obligations.
Within 01 working day from the date of receipt of information from the tax authority on the completion of the tax settlement and transfer of tax obligations by the merged company; The Business Registration Office where the merged company is headquartered shall update the legal status of these companies in the National Business Registration Database to the de-existence status according to regulations. submitted on the National Information System on Business Registration.
- Labor plan
In case of merger affecting the employment of many employees, the employer must develop a labor use plan according to the following provisions:
The labor use plan must have the following main contents:
Note:
When formulating a plan on using labor; The employer must exchange opinions with the employee representative organization at the grassroots level with respect to the place where there is a representative organization of workers at the grassroots level. The labor use plan must be publicly notified to the employees within 15 days from the date of approval.
The current employer and the next employer are responsible for implementing the approved employment plan.
The merger of enterprises brings a lot of benefits to enterprises in their production business activities. Create better competition and bring more markets to exploit and develop.
The merging company has the right to control all the work of the merged company.
Will take advantage of the potential customer source of the merged company in creating its products and business markets.
Expand the scope of activities, competitiveness with other large enterprises in the same field.
Merger is both a job with high benefits, but the associated risks are quite large. In addition to receiving benefits, the obligations of the merged company are also transferred to the merging company. If you do not take advantage of the benefits of the merger, you will run the risk of having to bear the weight of the merged apparatus of company. Enterprises need to carefully consider as well as accurately assess the financial situation of the merged companies.
In addition, the challenge of reconciling corporate culture and personnel of the merged companies is a difficult problem to solve.
Therefore, if you decide to merge a business into operating with your business, the business owner needs to consider how to suit many options, it is necessary to choose reputable business consulting units. credit, quality. Only then can it help to conduct transactions smoothly and efficiently.
Procedures for merging businesses
What if you do not have time to do the changing procedures yourself? Apolo Lawyers Law Firm will advise and get an authorized representative to carry out the necessary formalities to meet your business needs. Fees for consulting services and carrying out legal procedures will be adjusted depending on each case. Immediately contact Apolo Lawyers Law Firm via email contact@apolo.com.vn or hotline - 0903.419.479 for the best advice and support.
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