This is an alternative for voluntary liquidation process. The merger is easier way in case the private or public company has a sole shareholder who is a natural person. This structure can also be achieved before merger, for example other shareholders transfer their shares to one owner.
Terminating a company through merger process is first and foremost suitable for companies what are no longer active and what has no debts or obligations. The company being acquired can not be in bankruptcy and the acquiring person can not be insolvent.
The assets of the company goes to natural person in form of general legal succession – all rights and obligations shall be transferred from the company to the natural person as a whole.
This merging process is much faster (ca 1-2 months) than classical liquidation process (ca 6-8 months). However it is important to know that in case of merger the acquiring natural person has unlimited personal liability for the obligations of the company being acquired (including his or hers personal assets).
The merging process in general is following:
- The management board of the company being acquired shall send written notification to all known creditors. The management board publishes notification in Ametlikud Teadaanded (Official Notices).
- Within one month the creditors has right to request security in order to secure their claims.
- In case the company is joint property of spouses or the shares of the company has been pledged, then notarized consents must be signed
- After one month is passed then the management of the company and the shareholder (natural person) shall sign the notarized application for the Commercial Register.
- The company is being deleted from the Commercial Register.
If you would like to terminate your company in form of voluntary liquidation or new innovative merger, please do not hesitate to contact our Advisory Unit for legal assistance and price proposal contact@leinonen.ee.
