How is the reorganization of a company regulated?

How is the reorganization of a company regulated?

Legal basis:

Consultation content

1.Objects of corporate reorganization:

According to the provisions of the Companies Act, limited liability companies (SARL) and joint stock companies can be reorganized in one of the following forms: division, separation, consolidation or merger. In addition, the form of transformation of an enterprise from one type to another is applicable to private enterprises (for example, transformation of a private enterprise into a limited liability company).

2. Legal consequences when reorganizing a business:

Companies divided, merged or transformed will cease to exist from the moment the new companies are registered. Meanwhile, the separation of a business does not terminate the operations of the separated business.

Notice to companies, mergers leading to companies holding a market share greater than 50% in the relevant market will be strictly prohibited, unless otherwise provided by competition law. In the event that a company, after a merger, holds a market share of 30 to 50%, the legal representative of the company must inform the competition management body before proceeding with the merger, except in competition law cases. Paints have different regulations.

3. Power to decide on the reorganization of the company:

The power to decide on the reorganization of the company belongs to the owner of the company, the board of directors of a joint stock company or the general meeting of shareholders of a joint stock company.

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4. Rights and obligations of companies during company reorganization:

Newly established companies arising from divided, merged or converted companies enjoy legal rights and benefits, are liable or jointly liable for unpaid debts, employment contracts and other property obligations of the former company. On the contrary, in the event of separation or merger of companies, both the new company resulting from a reorganization and the old company have the rights and obligations mentioned above. Specifically:

4.1. Obligations towards employees:

According to the provisions of the Labor Code, in the event of a split, separation, consolidation or merger of a company, the next employer must be responsible for continuing to use existing employees and making changes, supplementing the employment contract. In the event that the current number of employees is not fully utilized, the next employer is responsible for developing and implementing a workforce utilization plan in accordance with the regulation. In the event that it is necessary to dismiss an employee, unemployment benefits must be paid to the employee in accordance with the regulations.

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4.2. Obligations towards the tax administration:

When carrying out a split, separation, consolidation, merger or transformation, the company must carry out tax finalization with the tax administration until the moment of reorganization decision of the competent authority and is responsible for submitting a tax declaration. the deadline for submitting tax finalization documents.

In case of overpayment of value added tax (VAT) or if the input VAT amount has not been fully deducted, the company will receive a VAT refund if it pays the VAT using the deduction method tax.

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Source: Collected by Luattoanquoc.com

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