Merger

If you find a partner who is interested in cooperation - for instance a competitor in the same field or a company with a bigger turnover - you may decide to merge. You may either merge with another company or establish a new company together. Different types of companies may merge and the company being merged may be from another EEC state (does not apply to commercial associations).

Upon merger the assets and liabilities of your company will be transferred to the acquiring company. Upon merger, no liquidation proceedings take place; your company is considered dissolved and deleted from the Commercial Register. The partners or shareholders in both companies become the partners or shareholders in the acquiring company.

Merger decision and merger agreement

  • The merger decision is signed by the general meeting of partners or shareholders.
  • After the decision is made, the management boards or partners or shareholders of the company enter into a merger agreement, which must be notarized.
  • The merger agreement specifies the exchange ratio of the shares in the companies and if necessary the amount of cash payment as well as the rights to be granted to the partners or shareholders of the company being acquired.
  • No audit of the merger agreement must be conducted if all of the shares in the company being acquired belong to the acquiring company or if all partners are in agreement.

Merger report

The management boards or shareholders of the companies shall prepare a merger report in which they: explain legally and economically the transformation, and the merger agreement. The merger report does not have to be prepared if the sole share or all shares belong to the company being acquired.

Public disclosure of merger

After the merger is entered into the Commercial Register of the location of the acquiring company, the merge must be announced in the publication Ametlikud Teadaanded.

Compensation claims

If you are the partner or shareholder of the company being acquired, but did not consent to the merger, you will have the right within two months of the entry of the merger into the Commercial Register to demand monetary compensation for your share in the company. If the acquiring company is a general partnership or limited partnership, you may demand compensation upon leaving the company.

Legislation

Related authorities

Last amended: 20-01-2016 15:38 | Compiled by: Ministry of Justice