Cross-border Merger

In a cross-border merger, each company concerned must comply with the provisions and formalities of the national law to which it is subject. Thus, during the merger process, each company may be subject to the laws of a different jurisdiction.

As regards the relevant points of a cross-border merger arising from Czech legislation and applicable to a Czech company, the following eight should be kept in mind.

1. Determination of the closing date. The decisive date is the date from which the transactions of the absorbed company will be treated as transactions of the absorbing company for accounting purposes.
2. Cross-border merger project. The merging companies shall propose a cross-border merger plan that contains common terms and must comply with the laws applicable to each company concerned.
3. Publication of the merger project. The draft must be published in the commercial register so that third parties can take note of it.
4. Information to creditors. The creditors of the absorbed company must be informed of the cross-border merger project as well as of their rights arising therefrom.
5. Employees of the absorbed company. Employees of the company being absorbed shall have the right to become acquainted with the cross-border merger project and to comment on it in writing.
6. Reports. The surviving company is required to prepare two reports. The first report shall cover the likely effects of the cross-border merger on the parties involved and on the employees. The second report is a technical report addressed to the interested parties.
7. General meeting. The General Assembly shall vote on and approve the cross-border merger and related documentation. The resolution of the general meeting must be in the form of a notarial record.
8. Certificate issued by a notary public. The notary shall issue a certificate attesting that all formalities required by law for the cross-border merger have been fulfilled.