Often, entrepreneurs are faced with a situation where it becomes necessary to modify the organizational and legal form of the legal entity. The reasons for this are very diverse - for example, changing the direction of the company’s activity. As a rule, in such circumstances, the founder asks a question - to reorganize or liquidate the enterprise? How to make the right choice? In order to perform this process correctly, it is necessary to clarify what exactly is meant by the reorganization of a legal entity.

This concept includes the termination or other modification of the legal status of the legal entity. There are the following types of reorganization:

  • merger;
  • accession;
  • separation;
  • allocation;
  • transformation.

Reorganization is carried out by owners, founders, authorities entrusted to them, or as a result of a judicial decision. Therefore, this process is optional and compulsory. Mandatory reorganization is carried out in cases specified by the applicable legislation.

If the owner of the legal entity or the authority entrusted to it does not reorganize within the time prescribed by the judicial authority, the court appoints a manager whose task is to reorganize this legal entity.

In order to provide the company with a more stable position in the market, it can be necessary to change the organizational structure of the legal entity. Such changes are usually connected with the desire of the founders to combine their business with some other organization, or the desire to divide the enterprise (for example, in case of a breakdown in partnerships). Reorganization is carried out according to one of the forms provided by legislation:

  • In case of a merger, two (or several) legal entities form one new entity.
  • Accession implies that the existence of one legal entity terminates, and it completely merges with the other.
  • Separation - a legal entity is divided into two (or more) entities;
  • Allocation means that from the legal entity one is allocated, while the former continues to function.
  • Transformation is the transformation of a legal entity from one organizational legal form to another. The rights and obligations of the enterprise remain unchanged, and are fixed on the basis of a special act.

In case of reorganization of a legal entity, our professional specialists are ready to issue all required documentation, prepare draft contracts, transfer acts, and, if necessary, will register in Justice.

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