When can the simplified merger procedure be used?
Simplified procedure, fewer obligations when merging companies
Carrying out a merger requires taking certain steps, which we have described in the article Merger of companies or partnerships – procedure, effects, duration
The simplified merger procedure, on the other hand, means that there is no obligation to perform certain actions, such as:
· Preparation by the management boards of the merging companies of a report justifying the merger, its legal basis and economic justification, in particular the share or stock exchange ratio, which is part of the merger plan.
· Mutual communication by the management boards of the merging companies, of any material changes in the assets and liabilities of their companies that have occurred between the date of drawing up the merger plan and the date of adopting the merger resolution.
· The examination of the plan of merger by the certified auditor and the issuance of the auditor’s.
These steps, especially the last point, that is. the lack of obligation to have the merger plan be examined by a certified auditor, will significantly save time and money. It should be remembered that the certified auditor is appointed by the court at the company's request, which may be time-consuming, and the certified auditor has two months to prepare the opinion itself. The need of a certified auditor also entails an additional cost to be incurred in connection with the merger. There may be an exception when one of the merging companies is a joint-stock company with non-cash contributions, in which case the certified auditor must examine the company's management report containing a valuation of these contributions.
Such facilities may be availed of where all the shareholders of the merging companies have agreed to them. Such consent should be given in the form adopted for the adoption of resolutions by the shareholders, i.e. by voting at a shareholders' meeting.
Simplified procedure in small limited liability companies
Another simplified procedure has been provided for merging limited liability companies in which the shareholders are only natural persons and their number in all merging companies does not exceed ten persons and none of the shareholders has objected. The merging companies are then not required to:
· The plan of merger has been announced at least one month before the shareholders' meeting to adopt the merger resolution.
· The plan of merger has been audited by a certified auditor.
· Inform the shareholders of their intention to merge with another company.
It is worth considering a simplified merger procedure - this will reduce the lengthy merger procedure. If you are thinking of restructuring within your companies - contact us!