Procedures for Company Merger and Consolidation from January 01, 2021

From January 1, 2021, the procedures for company consolidation and merger - Illustrative image.

To be specific: at Clause 2, Article 200 of the Enterprise Law 2020, the procedures for company consolidation include:

- The consolidated company prepares the consolidation contract and the draft charter of the consolidated company.

The consolidation contract must include the following key contents: names and headquarters addresses of the consolidating companies; name and headquarters address of the consolidated company; procedures and conditions for consolidation; labor usage plan; period, procedures, and conditions for asset conversion, conversion of stakes, shares, and bonds of the consolidating companies into stakes, shares, and bonds of the consolidated company; implementation period of consolidation;

- Members, company owners, or shareholders of the consolidating companies approve the consolidation contract, the charter of the consolidated company, elect or appoint the Chairman of the Members' Council, the Company Chairman, the Board of Directors, the Director or General Director of the consolidated company, and proceed with enterprise registration for the consolidated company in accordance with this Law.

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

In addition, at Clause 2, Article 201 of the Enterprise Law 2020, the procedures for company merger include:

- The relevant companies prepare the merger contract and the draft charter of the receiving company.

The merger contract must include the following key contents: name and headquarters address of the receiving company; name and headquarters address of the merged company; procedures and conditions for merger; labor usage plan; methods, procedures, period, and conditions for asset conversion, conversion of stakes, shares, and bonds of the merged company into stakes, shares, and bonds of the receiving company; implementation period of merger;

- Members, company owners, or shareholders of the relevant companies approve the merger contract, the charter of the receiving company, and proceed with enterprise registration for the receiving company in accordance with this Law.

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

- After the receiving company completes enterprise registration, the merged company ceases to exist; the receiving company enjoys all lawful rights and benefits, and is liable for all obligations, unpaid debts, labor contracts, and other property obligations of the merged company.

The receiving companies naturally inherit all rights, obligations, and lawful benefits of the merged companies according to the merger contract.

For more details, see Enterprise Law 2020, issued on June 17, 2020.

Le Vy

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