Companies are often expanded, acquired or merged for other reasons. This business combination must not only meet antitrust law requirements for merger control. It requires its own examination of the appropriate new legal form, which determines the rights and obligations of the new company created by the business combination and regulates the possible subsequent liability of the original company owners. As a specialist lawyer for commercial and [link text=“Corporate Law Munich” id=“74″], I would like to explain to you in more detail which options for a business combination are available to you.
##Business combination definition
A business merger is the association of companies under a single management, if necessary by dissolving their old legal forms. All forms of business combinations should always be examined under antitrust law and, above a certain size, may also require approval from the antitrust authorities.
In a business merger, one company takes over the other company's shares (share deal) or its assets (asset deal). Alternatively, two companies can be combined under one holding company. It is also possible to merge one company into another. Important contractual clauses regulate the purchase price, the deadline, guarantees and the tax burden. The purchase price can be divided into a fixed part and a variable part.
###The Asset Deal
A business merger can take place by taking over the assets of the transferring company from an already existing company (asset deal). The transferring company is then left as an empty shell. The acquiring company acquires all assets that belonged to the old company. In order for this acquisition to remain exempt from sales tax, it is important that the entire company is taken over. This includes the employees, the contracts, the claims, but also liability for liabilities. In the case of an asset deal, as your specialist lawyer for commercial and corporate law, I will think carefully about which contracts, employment relationships, claims and liabilities exist with you as the buyer and list them in detail, whereby we can refer to annual financial statements. It is very important to note that the customer, rental, leasing, maintenance or insurance contracts are only transferred to you as the buyer if the seller's respective contractual partner agrees to this. This consent must be secured before the contract is concluded.
###The merger
A business merger also comes about when two or more companies are merged as a whole into a new legal entity when a new legal entity is founded. The peculiarity here is that these original companies no longer exist after the merger, also known as a merger. They will be deleted from the commercial register. The advantage of this variant is that the respective assets, including the contractual relationships, are automatically transferred to the new company and the respective contractual partners do not have to give their consent. However, as your specialist lawyer for commercial and corporate law, I will check every contract to see whether it contains a provision that allows it to be terminated in the event of a merger. Such termination must then be ruled out before you begin the merger. A GmbH and an AG are the legal forms that can be considered as a new company. The stock corporation, which is also permitted outside the stock exchange, is somewhat more complex in terms of daily administration, but allows the transfer of shares, the shares, without the involvement of a notary. With the GmbH it is exactly the opposite. The control and corporate management is more flexible than with the AG. For this reason, GmbH shares cannot be transferred without notarization. I would be happy to explain to you which design suits you best.
In another variant of the merger, it can also make sense to merge a company with an existing one, so that in the end only one company remains, but it also holds the assets of the other. In this constellation, only the merged company is deleted. This also includes the partial transfer of one company to another. The takeover of part of a company is often preceded by a so-called “carve out”, in which the part of the company is first formed and for which the business combination is made attractive.
The merger as a business combination must always be notarized and may also require attestations from tax advisors and auditors. We would be happy to provide you with detailed advice on the individual steps and phases of the merger.
###Share deal
Often, in a business merger, only one company takes over the other's shares. Both companies will then remain in existence and each will retain its assets and contracts. The only difference is that one company is now the owner of the other. So there is only a change of ownership and possibly also a change of corporate management, without the companies involved themselves being changed in form as a result of the business combination. As your specialist lawyer, I will advise you on when this form of business combination is advantageous for you. This is particularly the case if you want to transfer company profits with tax advantages.
##Function on the business combination
If you are planning a business combination, you can choose between different types depending on what your objective is and whether or not you want the company to continue to exist after the business combination is completed. Business mergers also always have tax consequences and, above a certain size, must also be permissible under antitrust law. As a specialist lawyer for commercial and corporate law, I regularly inform my clients about the consequences of their plans and work with them to select the most suitable merger.
If you would like personal legal advice on the legal form that is right for you, please feel free to make an appointment with me. I look forward to helping you with your business combination.
You can find further informative articles about corporate law in my blog.
Copyright note: © Fotolia.com/Zerbor
