Conditions and procedures for merger of enterprises

Mergers are governed by the Enterprise Law 2014, under which: “One or several companies (hereinafter referred to as the merged company) may merge with another company (hereinafter referred to as the company). merger) by transferring all of its assets, rights, obligations and legal benefits to the acquiring company and ending the existence of the merged company. ”

Conditions for merging enterprises:

The 2014 Enterprise Law does not stipulate that new companies of the same type can be merged like the 2005 Enterprise Law. Thus, other companies of the same type can conduct mergers.

According to Clause 3, Article 195 of the 2014 Enterprise Law, if the merged company has a market share of 30% to 50% on the relevant market, its legal representative shall notify the competition authority before proceeding. merger, unless otherwise provided by the Competition Law.

Prohibition of merger of companies in which the acquiring company has a market share of more than 50% in the relevant market, except for the case specified in Article 19 of the 2004 Competition Law is: one or more enterprises The merger is in danger of dissolution or bankruptcy; The merger works to expand exports or contribute to socio-economic development, technical and technological advances. This is to prevent unfair competition, causing bad consequences for the economy.

Procedures for merger of enterprises:

Based on Article 195 of the 2014 Enterprise Law, related companies prepare a merger contract and draft merger charter. A merger contract must contain the following principal details:

– Name and head office address of the merging company;

– Name and head office address of the merged company;

– Procedures and conditions for merger;

– Plan of employment of labor;

– Methods, procedures, time limits and conditions for the conversion of assets, conversion of contributed capital, shares and bonds of the merged company into the contributed capital, shares and bonds of the merged company ; deadline for merger

Members, the company’s owner or the shareholders of related companies through the merger contract, the charter of the merging company and conduct business registration of the merging company in accordance with the Law this. The merger contract must be sent to all creditors and notified to employees within 15 days from the date of adoption.

After business registration, the merged company ceases to exist; The merged company is entitled to its lawful rights and interests, responsible for unpaid debts, labor contracts and other property obligations of the merged company.

Dossiers and order of enterprise registration for merger companies include:

– Merger contract;

– Resolutions and minutes of meetings for ratifying merger contracts of merging companies;

– Resolutions and minutes of meetings to approve the merger contracts of the merged companies, except where the merged company is a member, the shareholder owns more than 65% of charter capital or voting shares. of the merged company.

After completing the above procedures, the business registration agency shall update the legal status of the merged company on the National Enterprise Registration Database and make changes to the posted content. sign the business for the merging company.

The merger of businesses can bring a certain economic efficiency, help businesses become stronger but it also ends the existence of the merged companies, so businesses should consider When the company wants to merge, it is necessary to get the highest economic benefit.

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