Mergers and Divisions

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Mergers, divisions, segregations, transfer of assets and liabilities, assignment of businesses.

We are experts in carrying out corporate restructuring operations. Operation that requires high specialization in commercial law due to its complexity. The most common modalities are:

Mergers

The union of two or more companies in an existing or newly created one, taking advantage of their synergies and saving structure costs.

Recommended for those companies that maintain numerous links with other companies, where the share capital is in related persons or companies and that in many cases are corporate groups where some of the companies have not been active for years and yet maintaining them suppose an unnecessary cost to the group. Its liquidation is also not possible due to the high cost involved in the tax distribution of the remainder or reserves accumulated over the years, without the company having any assets.

With these operations, these reserves can be used to increase the value of the absorbing company and, in turn, liquidate and extinguish the absorbed company.

It is also recommended when several companies of the same group maintain constant linked operations of loans between them to the point of real confusion of assets. This situation supposes an additional cost due to duplication in the maintenance of the company and, however, does not provide advantages in terms of dividing the assets into several companies. There are also no advantages with respect to liability since the very confusion of assets between the commercial companies is going to be valued for the purposes of derivation of liability between them.

And if what is intended is the union of several companies with synergies, but with different partners and activities, we not only manage the merger, but also the relationships between the new partners of both companies to guarantee the success of the merger.

We carry out each and every one of the procedures, since we have professionals who carry out everything from the project to the call, publication, registration and communication to the Tax Agency of the operation. Accounting entry of operations and changes of ownership in various records.

We can accredit innumerable corporate restructuring operations with successful results.

Splits

Division of the assets of a company into two or more newly created or already established companies. The partners receive the newly created company or the new shares created after the split. It is about separating different branches of activity in various companies, for various reasons, the most common, separating responsibilities between activities that may entail business risks from others with less risk and even differentiating activities due to the application of TAX BANKRUPTCY, remaining in a company activities with full deduction of VAT and in another company those activities that do not allow deduction.

The OPERATION benefits from the FISCAL NEUTRALITY regime, if it meets the necessary conditions. For this, our team of experts will assess the operation that is best for you, explaining transparently the pros and cons of the operation.

We carry out each and every one of the procedures, since we have professionals who carry out from the project to the call, publication, registration and communication to the Tax Agency of the operation . Accounting entry of operations and changes of ownership in various records.

We can accredit innumerable corporate restructuring operations with successful results.

Segregations

Spin-off modality that is carried out by dividing the assets of a company into two or more newly created or already constituted companies. The segregated company receives the titles of the newly created company or the new shares created after the split. It is a question of separating various branches of activity in various companies, for various reasons, the most common of which are separating responsibilities between activities that may involve business risks from others with less risk and even differentiating activities due to the application of FISCAL PORRATA, remaining in a company activities with full deduction of VAT and in another company those activities that do not allow deduction.

The OPERATION benefits from the FISCAL NEUTRALITY regime, if it meets the necessary conditions. For this, our team of experts will assess the operation that is best for you, explaining transparently the pros and cons of the operation.

We carry out each and every one of the procedures, since we have professionals who carry out everything from the project to the call, publication, registration and communication to the Tax Agency of the operation. Accounting entry of operations and changes of ownership in various records.

We can certify countless corporate restructuring operations with successful results.

Global transfer of assets and liabilities

Express company liquidation mode, or business transfer without transferring the company. The company transfers all its assets and liabilities to another company, selling or transferring the activity in its entirety and leaving the transferring company with the amount received for the transfer, which may be 0 if the liabilities are valued in the same way as the assets. Subsequently, the company is dissolved and extinguished, distributing among its partners the undistributed reserves, as the case may be.

Recommended modality when any of the partners refuses to sell their shares or social participations, blocking the transmission; The global transfer of assets and liabilities is agreed by a majority vote, and the result is equivalent to the sale of the company, but without having to sell its entire share capital, which requires the agreement of all the partners.

Assignment of businesses

Modality of transfer of activity that normally takes place in a rented premises. It is not a transfer of premises, it is the entire activity with elements included. This modality can be interesting because it does not apply VAT, if the assignment is made as a whole; On the contrary, if the transfer is carried out by modules such as, transfer of premises and sale of equipment separately, VAT is applied at 21%, considerably increasing the cost of the operation.

Share capital reduction

Capital reductions can be due to several main causes: because the company’s capital stock exceeds its needs; or because the company is in a weak economic-financial situation and needs to adjust its levels of own funds and its financial ratios, or because the separation or exclusion of a partner is agreed, the departure of one of the partners is agreed, acquiring the company its share and then

  1. The return of contributions to partners, which is a modality widely used in recent years as a form of remuneration to shareholders, or for the exit of one of the partners from the social capital without another partner necessarily having to acquire their participation.
  2. The forgiveness of passive dividends, that is, the “forgiveness” of the part of capital pending disbursement of the shares issued in the constitution or in the increase of the capital stock of a company.

If the reduction is motivated by the need to adjust the company’s equity derived from a situation of economic-financial weakness (for example, that there is an imbalance between capital and equity caused by the company’s losses), the purpose of the capital reduction it will be the achievement of the most appropriate financial structure for the new situation of the company.

The reduction of capital for this reason, as well as the constitution or increase of the legal or voluntary reserves indicated for the modality of reduction due to excess capital, do not imply a patrimonial alteration and are made by means of an accounting entry, by means of the transfer of the account of capital to reserves. However, the first two forms of reduction due to excess capital produce an effective reduction of the same that originate a patrimonial alteration.

Modalities

Regardless of the reasons and the purpose of the capital reduction, three modalities must be distinguished to carry it out:

  1. Reduction or decrease of the nominal value of the shares, maintaining the number of shares.
  2. Amortization or elimination of shares, with reimbursement of the contributions to their holders.
  3. Grouping of shares for their exchange or substitution for other shares of lower total nominal value.

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