Change of the company’s legal form
Changing of the company’s legal form (changeing of the legal and organizational form,transformation) involves transition from one legal form to another, in accordance with the Law on Companies.
After the change of the legal form company continues to operate as the same legal entity, but in other legal form.
Changing of the company’s legal form can be:
- voluntary and mandatory (forced, legal)
- horizontally or vertically.
According to the Law on Companies, the types of the changing of legal form are changing:
- a Joint-stock company into a Limited liability company
- a Joint-stock company into a General partnership or Limited partnership
- a Limited liability company into a Joint-stock company
- a Limited liability company into a General partnership or Limited partnership
- a General partnership and Limited partnership into a Limited liability company and Joint-stock company
- a General partnership into a Limited partnership and vice versa.
After the expiry of the legally prescribed period of at least one month from the date of publication of the proposed resolution on the change of legal form, and after the general meeting where the final resolution on the change of legal form was passed, the registration of the change of legal form of the company can commence.
For the realization of the registration of change of legal form the following documentation are necessary:
- application for the registration of change of legal form of a company
- resolution of the competent body on the change of legal form of a company
- amendments to the company’s memorandum of association
- company’s articles of association if the company is changing its legal form to become a joint-stock company
- resolution on the appointment of members of the company’s bodies
- documentation required for the registration of a particular legal form of the company.
The Law on Companies whithin the expression of the status change means only a change in which there is a transfer of property from one company to another or several others, but no changes in which participate only one company, so that it changes its status. Thus, the content of the concept of a status change excluded:
- change of legal form (ie, transformation) and
- changes whose legal effect consists in changing some characteristics of the company (eg. change of business name, seat structures management bodies…).
The Law on Companies provides and regulates four main types of status changes, but within them different subspecies.
Basic types of status changes are:
- Merger by acquisition
- Merger by the formation of new companies
Acquisition and merger of companies, in the literature usually have been termed fusion, while the division and separation usually referred to as divisions.
Subspecies differ, as a rule, within the division, but with fusion are occurring some specific forms of fusion.
When it comes to the division, within the scope of the division and separation there are a difference between specific forms that are essentially the same – identical, but they are different only in whether arising from division or separation. It is a division/separation:
- by the formation of new companies
- by acquisition and
- which is mixed.
In fusion don’t appear such specific modalities, but there is difference between two separate forms of fusion, and both refer to the merger. It is the so-called:
- fusion in the holding and
- fusion in the branch.
Status changes include publishing draft agreement on the status change and draft plan of division and registration of status change.
Publishing the Draft Agreement on the Status Change/Draft Plan of Division
- application for the registration of publishing the draft agreement on the status change and draft plan of division on the Agency’s website
- draft agreement on the status change and draft plan of division of the company
- the application for the registration of a resolution on increasing the share capital – if the status change brings about an increase in the share capital of a joint stock company
- application for the registration of status change (there are different forms depending on the type of status change)
- resolution of the general meetings of the companies participating in a status change, on the approval of the status change
- agreement on the status change and plan of division of the company, certified by the competent certification authority
- memorandum of association of the company formed as the result of the status change as well as the articles of association of the company, if a new joint-stock company is formed, or amendments to the memorandum of association and articles of association, in case of a joint-stock company, if the company participating in the status change will continue to exist
- documentation required for the registration of incorporation of a company in the appropriate legal form, if the result of the status change is the formation of a new company
- financial statements of the companies participating in the status change along with the auditor’s opinion, auditor’s report on the completed status change, report by the board of directors, or report by the executive board if the company has a two-tier management system, on the status change or the statement by the company’s representative to the effect that shareholders agree that financial statements, auditor’s report, board of directors’ report, or executive board’s report will not be drafted
- confirmation of the entry of shares issued by the Central Securities Register if the status change results in an increase in the share capital of the joint-stock company.
If the status change results in an increase of the company’s capital (except in the case of joint stock companies), the applicant shall submit an application for the registration of an increase of the company’s registered capital concurrently with the application for the registration of a status change.
If the company’s registered capital is reduced as a result of the status change, the applicant shall submit an application for the registration of a reduction of the company’s registered capital concurrently with the application for the registration of a status change.
If the company ceases to exist as a result of a status change, the applicant shall submit an application for the strike-off of that company from the Register concurrently with the application for the registration of a status change.
For all of these changes it is necessary to attach a proof of payment of the fee for change of data!