Table of Contents:
- What does the division of a company involve?
- What are the methods of dividing a company?
- How does the division of a company proceed?
- What costs are generated by the division of a company?
What does the division of a company involve?
The division of a company involves splitting the assets (assets and liabilities) of one company, which is then transferred in whole or in part to another existing company (or companies) or a newly formed company (or companies).
The following entities are subject to division:
- only capital companies (joint-stock company, simple joint-stock company, and limited liability company) and limited joint-stock partnership.
- partnerships (general partnership, professional partnership, limited partnership) are not subject to division.
What are the methods of dividing a company?
- Division by acquisition
- Division by forming new companies
- Division by acquisition and forming a new company
- Division by separation
- Division by extraction (this is a new form of division introduced by the latest amendment to the Commercial Companies Code in September 2023).
How does the division of a company proceed?
The division can be broadly divided into 3 phases:
- Preparatory actions (managerial phase)
- Adoption of resolutions on the division (ownership phase)
- Registration of the division (registration phase)
Assuming efficient operation of the individuals involved in the process and the registration court, the division takes approximately 6 months (in the case of a simplified procedure) to even about 10-12 months.
What costs are generated by the division of a company?
The costs include primarily the fees of a certified auditor, but also court fees, costs of announcements in the Official Court and Business Gazette (MSIG), and notary fees.
