Change in legal form – the Merger Act
The Merger Act allows a corporation to change its legal form. Moreover, the Merger Act allows spin-offs, conversions and transfers of assets and liabilities.
Changes in legal form according to the Merger Law
According to Art. 53 FusG a corporation can change its legal form. The possible transformations in legal form (Art. 54 FusG) are as followed:
On one hand, a stock corporation can change into another stock corporation or into a cooperative. On the other hand, a collective company can change into a stock corporation, a cooperative or a limited partnership. And finally, a cooperative can change its legal form to a stock corporation or to an association.
Reasons for a change in legal form
The goal of a change is to substitute the inappropriate legal form for a more suitable one. Thanks to the Merger Act these changes can be made without having to deal with difficult liquidation. The process for a change in legal form is similar to those of mergers and spin-offs.
The following steps are necessary for a change in legal form:
- Written plan for the change
- Examination of the plan by a licensed audit expert
- Passing of resolution by the general meeting of the shareholders
- Public certification
- Entry in the commercial register
It is important to note the rules regarding the protection of shareholders Art. 55 ff. FusG. The change in legal form allows corporations to flexibly react to changes in their environment and adjust the legal form to their needs.
