Reorganization of a legal entity is a process of changing its structure or organizational/ legal form.
The need for reorganization of legal entities arises quite often. Its reasons may be: the achievement of the goals for which the company has initially been established, an increase in the scale of the firm’s activity, accession to a competitor, the absorption of a competitor, the unprofitable nature of the enterprise etc.
Reorganization of a legal entity is an act that results in the creation of a new legal entity (or several) or the termination of activities of one or more legal entities.
The legislation of the Republic of Belarus allows five forms of reorganization of the enterprise - merger, accession, division, separation and transformation.
Forms of reorganization:
- Merging of several legal entities into a new one. When merging legal entities, the rights and obligations of each of them pass to the newly created legal entity in accordance with the deed of transfer.
- Accession of one legal entity to another. When a legal entity joins another legal entity, the rights and obligations of the affiliated legal entity are transferred to the latter in accordance with the deed of transfer.
- Division of a legal entity into several new organizations. When a legal entity is divided, its rights and obligations pass to newly emerged legal entities in accordance with the separation balance sheet.
- Separation of legal entities from the organization. If one or several new legal entities are separated from the legal entity, the rights and obligations of the reorganized legal entity pass to each of them in accordance with the separation balance sheet.
- Transformation of a legal entity of one organizational legal form into a legal entity of another organizational and legal form.
When performing transformation, the rights and obligations of the reorganized legal entity are transferred in accordance with the deed of transfer with the exception of rights and obligations that can not belong to the arising legal entity.
The reorganization of a legal entity can be used to divide and diversify the business and can also serve as an alternative way of liquidating an enterprise.
The use of reorganization as a method of liquidation of an enterprise has its practical pros. Reorganization is faster and cheaper while liquidation is delayed for months and sometimes for years.
Which is also not surprisingly, many owners consider reorganization as a convenient way to get rid of loss-making or irrelevant businesses.
To eliminate the “unnecessary” legal entity merge or accession are most commonly used. After the state registration of the reorganization is completed an unnecessary company becomes part of another enterprise, which saves its owner from the financial and time costs of liquidation.
The Law Group Bureau 24 will promptly and professionally assist you in:
- advising on reorganization of the company and selection of the best way to reorganize;
- explaining the nuances of the distribution of assets and debts in the reorganization, their transfer from one company to another;
- preparation of a complete package of documents for reorganization (minutes of general meetings, separation balance sheet, transfer certificate, notifications, approvals, documents necessary for amending constituent documents);
- preparation of a full package of documents for registration of newly established firms as a result of reorganization;
- opening new bank accounts;
- receiving new seals and destroying old ones;
- renewal of labor relations with the work collective;
- amendments to contracts with business partners.
Our specialists are always ready to help you to restart your business!
Working with us you get a reliable partner of a whole team of professionals.
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