Cross-border merger of Czech company and another EU company.
Cross-border merger of Czech company and another EU company. We assist Czech and foreign companies in the merger process.
The ECOVIS Czech law firm provides together with the team of accountants, tax advisors and auditorsECOVIS International network but also togehter with other advisors complex legal services in connection with cross border mergers if it involves a Czech company.
The following steplist outlines the basic milestones and further the detailed steplist of the cross-border merger between a Czech company and another company located in EU. The documents are usually drafted by our Czech Law Firm. The cross-boarder usually takes at least 4-6 months due to mandatory deadlines.
Principple conditions and basic remarks to the cross-boarder merger
(i) Firstly, the Decisive Day of the Merger should be confirmed. The Decisive Day is usually January 1, but it can be another date as well. Please note, that as from this date, all activities of Company A are deemed, from the accounting point of view, to be activities conducted on the account of Company B. It cannot be more than 12 months prior to the filing of the application for registration of the Merger with the respective Czech Commercial Court.
(ii) Analysis regarding the possibly required evaluation of the assets and liabilities of Company A by the Expert (appointed by the court) pursuant to Law applicable in another EU country – for example in case of registered capital increase of the succeeding company, i.e. Company B, identifying if capital increase shall be necessary and in what amount.
(iii) Closing financial statements of Company A as of the day preceding the Decisive Day (e.g. December 31, 2018) that shall be prepared and audited (if the requirements of the law are met).
(iv) Closing financial statements of Company A as of the day preceding the Decisive Day (e.g. December 31, 2018) and opening balance sheet of Company B as of the Decisive Day (e.g. January 1, 2019) that shall be prepared and audited (if the requirements of the law are met).
(v) The financial statements, including its audits, of Company A and Company B for the preceding three years to be provided.
(vi) Preparation and Execution of the Merger project (first draft to be prepared by ECOVIS Czech Law Firm, executed by the executives of Company A and Company B). The Merger project should be executed in a six month period from the day preceding the Decisive Day at the very latest, otherwise Company A and Company B would be obliged to prepare the interim financial statements. Please note, that the Merger project will have to inter alia to determine, how the shares of the Company A will be exchanged for the shares in Company B. This will have to be reviewed and determined by the EU Country Law Firm.
(vii) Deposition of the Merger project into the Collection of Deeds maintained by the respective court.
(viii) Publication of the announcement of the fact that the Merger project had been deposited into the Collection of Deeds and the notification to the creditors, debtors and shareholders in the Commercial Gazette;
(ix) Notification of the trade unions/employees, if applicable.
(x) The approval of the Merger by the general meeting of the Company A (by the Company A) according to the Law applicable in another EU country.
(xi) The approval of the Merger by the general meeting of the Company B (by the Company B). The general meeting can take place at the earliest one month after the notification in the Czech Commercial Gazette. The Resolution shall be in the form of a notarial deed.
(xii) Filing the application for registration of the Merger with the respective Court with the statutory appendices (or registration by the notary). The application for registration of the Merger have to be filed with the respective commercial court in a twelve months period from the Decisive Day.
(xiii) Registration of the Merger. The Merger becomes legally effective on the date of entry into the Commercial Register of another EU country. As of this day Company A shall cease to exist and Company B shall become the legal successor of Company A. Subsequently the Merger will be also registered in the Czech Commercial Register and the Company B deleted from the Czech Commercial Register.
(xiv) Post-Merger notifications, e.g. Trade License Office, Financial Authority, Social Security Office, Health insurance companies, Building Office, cadastral register and other relevant authorities and registries.
(xv) VAT tax returns.
ECOVIS ježek is a Czech law firm providing, amongst others, legal services in connection with national and cross-boarder mergers with the involvement of Czech companies
Eliška Čáslavská has many years of experience in national and cross-boarder mergers and transformation.
If you need quality legal advice and ensure for proper merger in Czech Republic or cross boarder merger involving Czech company you can contact us at any time.
t: +420 226 236 600 | e: email@example.com
“Company A” means company from EU other than Czech Republic;
“Company B” means Czech company – limited liability company or joint-stock-company;
“Expert” means a specialized person/company appointed by a court to prepare an evaluation of Company B , for the purposes of the contemplated Merger, if an evaluation is needed;
“ECOVIS Czech Law Firm” means ECOVIS ježek, advokátní kancelář s.r.o.;
“Law Firm from another EU country” means ECOVIS law firm in another EU country;
“Law Office” means ECOVIS Czech Law Firm and Law Firm from another EU country jointly;
“Shareholder A” means shareholder in Company A;
“Shareholders B” means shareholder in Company B;
“Act on Transformations” means Czech Act No. 125/2008 Coll., on Transformations, as amended;
“Merger” The process of the cross-border merger of Company B into Company A as the legal successor of Company B, whereby Company B will cease to exist and any and all of its assets, including rights and obligations from employment relationships, will pass onto Company A, as the succeeding company.
“Companies” means together Company A and Company B.
“Shareholders” means together Shareholder A and Shareholder B.
Each merger is specific and structured in accordance with the needs of the client. In case of cross-boarder mergers, the Czech company can be the surviving company or the dissolving company. The steplist prepared in connection with each merger has to be reviewed and confirmed not only by lawyers but also by accountants, auditors and the company itself to confirm, that the goal of the merger will be achieved and there are no hidden risk and unpredictable results.
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About ECOVIS ježek advokátní kancelář s.r.o.
The Czech law office in Prague ECOVIS ježek practices mainly in the area of Czech commercial law, Czech real estate law, representation at Czech courts, administrative bodies and arbitration courts, as well as Czech finance and banking law, and provides full-fledged advice in all areas, making it a suitable alternative for clients of international law offices. The international dimension of the Czech legal services provided is ensured through past experience and through co-operation with leading legal offices in most European countries, the US, and other jurisdictions. The Czech lawyers of the ECOVIS ježek team have many years of experience from leading international law offices and tax companies, in providing legal advice to multinational corporations, large Czech companies, but also to medium-sized companies and individual clients. For more information, go to www.ecovislegal.cz/en.