Procedures for merging joint stock companies: Complete and detailed instructions

Procedures for merging joint stock companies is the process by which one or several companies transfer all assets, rights, obligations and legal interests to a joint stock company, and at the same time terminate the existence of the merged company. For the merger process to proceed smoothly, businesses need to prepare all relevant documents and procedures. This article will provide detailed instructions on merging joint stock companies, helping customers carry out this process effectively.

What is a company merger?

Company merger is a form of business reorganization in which one or several companies (the merged company) transfers all assets, rights, obligations and legal interests to another company (the merged company), and at the same time terminates the existence of the merged company.

Conditions for merging joint stock companies

To carry out merging joint stock companies, the involved businesses must meet the following conditions:

• Type of enterprise: There are no regulations requiring merged enterprises to be of the same type. Therefore, businesses of different types (joint stock companies, limited liability companies, partnerships) can still merge.
• Comply with the Law on Competition 2018: The merger must not have an impact or have the ability to significantly restrict competition in the Vietnamese market.

Documents for merging joint stock companies

Documents for merging joint stock companies will include the following documents:

Merger records of joint stock companies changing charter capital:

• Notice of change in business registration content.
• Resolutions, decisions and meeting minutes of the General Meeting of Shareholders for joint stock companies on changing charter capital.
• Merger contract.
• Resolution and decision on the approval of the merger contract and copy of the minutes of the General Meeting of Shareholders for joint stock companies on the approval of the merger contract of the receiving company.
• Resolution and decision on the approval of the merger contract and copy of the meeting minutes on the approval of the merger contract of the merged company, except in cases where the merging company is a shareholder owning more than 65% of the charter capital of a joint stock company with voting rights for the joint stock company of the merged company.
• Document from the Investment Registration Authority approving the purchase of shares by foreign investors in cases where procedures for purchasing shares must be carried out according to the provisions of the Law on Investment.
• Documents of the person authorized to perform the procedure: Authorization document and Personal identification documents.

Merger records of joint stock companies changing shareholders as foreign investors:

In addition to the above papers and documents, except for Resolutions, Decisions and Meeting Minutes of the General Meeting of Shareholders for joint stock companies on changing charter capital, the merger dossier for this case includes:

• The list of shareholders who are foreign investors has been changed.
• Copy of legal documents of the transferee: Individual (Passport or documents of equivalent value); Organization (Investment certificate, Business registration certificate, Authorization document with personal documents of the authorized representative). For shareholders who are foreign organizations, copies of the organization’s legal documents must be consular legalized.

Procedures for merging joint stock companies

Procedures for merging joint stock companies are carried out according to the following steps:

Prepare and approve the merger contract

Related companies prepare the merger contract and draft Charter of the merged company.

The merger contract must have the following main contents:

• Name and head office address of the merging company.
• Name and head office address of the merged company.
• Merger procedures and conditions.
• Labor use plan.
• Methods, procedures, deadlines and conditions for converting assets, converting capital contributions, shares, and bonds of the merged company into capital contributions, shares, and bonds of the merging company.
• Time limit for merger implementation.

Members, company owners or shareholders of related companies approve the merger contract and Charter of the merging company.

The merger contract must be sent to all creditors and notified to employees within 15 days from the date of approval.

Register to change the business registration content for the merged company

• Place of application: Business registration agency where the merged company is headquartered.
• After receiving the business registration dossier, the Business Registration Authority issues a Receipt and checks the validity of the dossier.
• Within 03 working days from the date of receiving valid documents, the Business Registration Authority will issue a new Business Registration Certificate and Confirm changes in business registration content.
• If the dossier is not valid: The business registration agency sends a written notice of amendments and supplements to the dossier.

>>> See more: How to Merge a Subsidiary Company into the Parent Company.

Termination of existence of the merged company

• After the merged company is granted business registration, the merged company changes to the legal status of “merged”.
• The business registration agency where the merged company is headquartered sends information to the Tax Authority to complete settlement procedures and transfer tax obligations.
• After receiving information from the Tax Authority within 01 working day, the Business Registration Authority updates the legal status of the merged company to “ceased to exist” on the National Business Registration Database.
• The business registration agency terminates the existence of branches, representative offices, and business locations of the merged company.
• In case the business registration content of the merging company remains unchanged, the merging company sends a written notice to the Business Registration Authority to terminate the existence of the merged company.
• In case the merged company has its headquarters outside the province or centrally run city where the headquarters of the merged company is located, the business registration agency where the merged company is located will send information to the business registration agency where the headquarters of the merged company is located to carry out procedures to terminate its existence.

>>> See more: Business Merger Procedures According to the Law on Enterprise 2020.

Work that needs to be done after merging joint stock companies

After completing the merger procedure, the merging company needs to perform the following tasks:

• Publish information about the merger on the National Business Registration Portal.
• Notify relevant state agencies (tax authorities, social insurance agencies,…) about the merger.
• Carry out procedures to change tax registration information, social insurance registration,…
• Carry out procedures for converting assets, converting capital contributions, shares, and bonds of the merged company into capital contributions, shares, and bonds of the merging company.
• Resolve issues related to labor, contracts, and financial obligations of the merged company.

Professional consulting services and guidance on merging joint stock companies at Long Phan Consulting Company

Long Phan Consulting Company provides consulting services and guidance on merging joint stock companies procedures with a team of experienced experts. We provide customers with the following services:

• Consulting on conditions for merging joint stock companies.
• Instructions on preparing documents and implementing procedures for merging joint stock companies.
• Drafting merger contracts or evaluating, amending and supplementing merger contracts.
• Representing customers in working with competent state agencies.
• Resolve legal issues arising during the merger process.
• Consulting on important notes when implementing effective joint stock company merger procedures.
• Consulting on the rights and obligations of the parties when merging.
• Consulting on tasks that need to be done after the merger.
• Consulting and resolving other issues related to the procedures for merging joint stock companies.

Frequently asked questions about the procedures for merging joint stock companies

Below are frequently asked questions about the procedures for merging joint stock companies that customers can refer to:

What types of businesses can merge with joint stock companies?

Joint stock companies can merge with many different types of businesses, including limited liability companies (LLCs), partnerships, and other joint stock companies. There are no regulations requiring companies to have the same type to conduct a merger.

What content should a merger contract include?

The merger contract must clearly state the names and addresses of the companies involved, merger procedures and conditions, labor use plans, methods of converting assets and shares, as well as the merger implementation deadline.

How will the merged company terminate operations?

After the merged company is granted a new Business Registration Certificate, the merged company will change to the legal status of “merged” and then “cease to exist” on the National Business Registration Database.

How will the financial obligations of the merged company be handled?

All financial obligations, including tax obligations, will be transferred to the merged company. The tax authority will coordinate with the business registration authority to complete settlement procedures and transfer tax obligations.

What does the merging company need to do after completing the merger procedure?

The merging company needs to publish information about the merger, notify relevant state agencies, carry out procedures to change registration information (tax, social insurance,…), convert assets and shares, and resolve issues related to labor and contracts.

Is it necessary to notify employees about the merger?

Yes, the merger contract must be notified to employees within 15 days from the date the contract is approved.

Conclude

Procedures for merging joint stock companies require a deep understanding of the law and practical experience. Long Phan Consulting Company is proud to be a reputable and professional provider of consulting services and guidance on merger procedures for joint stock companies. Customers who need advice and implementation of the procedures for merging joint stock companies, please contact us via the hotline: 0906735386.