MERGERS, also known as merger by absorption, merger by formation or division of company(ies)
Have you ever heard that companies can merge, combine or even divide? This is a transformation of companies that takes place without the need to liquidate the company(ies).
MERGER BY ABSORPTION, i.e. A + B = A
A merger by absorption is a procedure whereby, following dissolution without liquidation, one or more companies cease to exist, while the assets of the dissolved companies are transferred to another already existing company, which thereby becomes the legal successor of the dissolved companies.
MERGER BY FORMATION, i.e. A + B = C
A merger by formation is a procedure whereby, following dissolution without liquidation, two or more companies cease to exist, while the assets of the dissolved companies are transferred to another newly established company, which becomes the legal successor of the dissolved companies upon its formation.
DIVISION, i.e. A = B + C + D
A division of a company is a procedure whereby, following dissolution without liquidation, the company ceases to exist, while its assets are transferred to other already existing companies, which thereby become the legal successors of the dissolved company (hereinafter referred to as “division by absorption”), or to newly established companies, which become the legal successors of the dissolved company upon their formation.
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