18. December 07
As a result of the amendments to the Commercial Code that took effect in the previous week, private limited companies and public limited companies entered in the commercial register of Estonia can now easily merge with companies established in the European Economic Area, while preserving legal continuity.
According to <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Marget Kukk, an adviser with the Private Law Division of the Ministry of Justice, the amendments to the Commercial Code provide companies with simplified opportunities for restructuring their activities across borders. "An Estonian company can now freely merge with foreign companies like Lithuanian akcinè bendrovè, Swedish aktiebolag or Finnish osakeyhtiö,” Kukk noted.
Provided that all preconditions for a merger are met as prescribed by law, the Estonian commercial register will issue a merger certificate to the company. “The certificate constitutes sufficient proof of the lawful merger procedure carried out in Estonia. That certificate will be enough to merge with a foreign company,” Kukk added.
According to Marget Kukk, the same approach will also apply in the case that the acquiring company has been registered with the Estonian commercial register. “In such a case, the relevant register of the foreign country will issue a certificate to the foreign company, which signals the “green light” for the merger.
In general, a cross-border merger does not differ from a domestic merger: the merger agreement must be signed, the merger report must be prepared, and the merger agreement must be audited.
The amendments to the Commercial Code entered into force on 15 December 2007.
