With changes in the market and economy, corporations often choose to reorganize, allowing for the transfer of the company’s assets, rights and obligations to other corporate entities. Corporate reorganization means the termination of the corporate entity without liquidation procedures. The corporatel entity ceases to exist as soon as it is removed from the Register of Corporate Entities.

Corporate entities may be reorganised by mergers and divisions. Only corporate entities of the same legal type may participate in reorganisations, with certain exceptions provided in laws governing the different legal types of corporate entities.

The possible forms of corporate merger are joining and consolidation:

• Joining is the merger of one or more corporate entities to another corporate entity which then assumes all the rights and obligations of the reorganised corporate entities.
• Consolidation is the merger of two or more corporate entities into a new corporation which assumes all rights and obligations of the merged corporations.

The possible forms for splitting corporate entities are division and partition:

• Partitioning is parcelling out the corporate entity’s rights and obligations to other functioning corporate entities.
• Division is the incorporation of two or more corporate entities based on the corporation undergoing reorganisation which then assume specific portions of the corporation’s rights and obligations.

Our lawyers will help you do more than just assess the prospects for reorganization; we’ll also prepare all the documents and represent your interests during corporate reorganization.

Restructuring is an alteration of the legal type of corporate entity whereby a corporate entity of a new legal category becomes successor to all rights and liabilities of the former corporation. The conversion only changes the form of the corporate entity and the entity itself is not abolished.

If a corporate entity whose members are liable for the obligations of the corporation (as in, for example, a personal enterprise) is restructured, then the members of the restructured corporation, without regard to the new corporate type, accept subsidiary liability for three years for the obligations of the restructured corporation that emerges for obligations undertaken prior to its new entry on the Register of Corporate Entities. If a member of a corporate entity fails to become a member of the changed corporate entity, the member is not exempt from the liability specified in law either during restructuring or after.

• A limited liability private company or public company can be restructured into a public or private limited liability company, a state company, a municipal company, an agricultural company, a cooperative, a general partnership, a limited partnership, a personal enterprise or a public institution.
• A personal enterprise can be restructured into either a public or private limited liability company, or a public institution.
• A public institution can be restructured into a budgetary institution (where a local government or the state is an owner of the public institution) or a charitable fund.
• A general partnership or limited partnership can be restructured into a limited or general partnership, a public or private limited liability company, an agricultural company, a cooperative, a personal enterprise, a public institution or a charitable fund.