Investor Presentaiton
Transformations of companies (merger, transfer of
assets to a shareholder, demerger, change of legal
form and cross-border relocation)
In Czech legislation, mergers fall within the category
of transformations of businesses, which also include
demergers of companies, transfers of assets to shareholders,
any changes in a company's legal form and cross-border
relocations. Transformations of businesses are possible
even if the companies are in liquidation or insolvency
proceedings. Mergers and in some cases also other
transformations can be undertaken also as cross-border
transactions with legal entities registered in other EU or
EEA countries, including European Companies (Societas
Europaea).
Probably the most frequent form of transformation is the
merger by acquisition: one of the companies continues to
carry on its activities and the other ceases to exist, while
its assets and liabilities are transferred to the successor
company. Another option is a merger by the formation of a
new company: all of the participating companies cease to
exist, and their assets are transferred to a newly established
successor company.
From a financial point of view, carrying forward the tax
losses of wound up companies is generally allowed.
Mergers are carried out on the basis of merger projects,
subject to approval by the general meetings.
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The merger date can be determined either
retrospectively or prospectively.
In some cases, the merger procedure can be significantly
simplified.
In the case of mergers of joint-stock companies, it is
possible to allow the voluntary buyout of new shares
representing a minority share in the merging company
if the successor company owns more than 90 percent of
the merging company's voting rights.
Companies with different legal forms can also merge,
and mergers may involve more than two entities. Cross-
border mergers are possible; however, a number of special
regulations apply.
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