Standardized and orderly enterprise merger needs the support of sound laws and regulations. Although enterprise merger has a long history in China, it has become an important measure for the reform of state-owned enterprises at this stage. However, the laws and regulations on enterprise merger are still far from perfect. The current merger legislation does not provide for many systems of merger, and many provisions on merger are only scattered in company law, bankruptcy law and other laws and regulations. For example, the Law on Industrial Enterprises Owned by the Whole People, the Regulations on Collective Enterprises and other important systems, such as the form of merger, the effectiveness of merger, the specific procedures of merger, and the protection of merged creditors, have not been stipulated. Even the company law, which has more provisions on merger, lacks provisions on some important issues, such as merger contract, protection of dissenting shareholders in merger, merger consideration and merger payment, simple merger and so on. In addition, there is no anti-monopoly legislation in China so far, so it is difficult to prevent monopoly problems in merger.
Legislation is not uniform, even contradictory.
In China, enterprises adopt different enterprise legislation according to different types. The legislation of enterprise merger is included in the corresponding enterprise legislation, which leads to the separate legislation of enterprise merger. This fragmented legislation lacks coordination, leading to disunity and even contradiction. This confusion is mainly manifested in the following aspects: (1) Differences in the concept and form of enterprise merger. According to the company's articles of association, the forms of company merger include absorption merger and new merger. In the merger, one company is dissolved and the other company exists; In a newly established merger, the parties to the merger are dissolved. The Interim Measures for Enterprise Merger, a departmental document applicable to non-corporate state-owned enterprises, stipulates that enterprise merger "refers to the act of an enterprise purchasing the property rights of other enterprises, making other enterprises lose their legal personality or changing legal entities." Obviously, the "merger" here includes not only the two kinds of mergers stipulated in the Company Law, but also the contents of the merger. In addition, the Interim Measures also stipulate that enterprise merger includes five forms: debt, purchase, absorption of shares and holding. The different provisions on the nature and form of merger in legislation make people's understanding of merger vague, which leads to the ambiguity of the concept of contract terms in merger affairs. (2) The differences in the decision-making and examination and approval provisions of enterprise merger. Some regulations lack rationality. Considering the interests of stakeholders involved in the merger and the principle of fairness and efficiency, there are still some unreasonable factors in some provisions of the company law, the main law involved in the merger. For example, on balancing the interests of shareholders, firstly, there is no simple merger, which is not conducive to protecting major shareholders and improving the efficiency of merger; Second, there is no provision to protect dissenting shareholders (that is, the share repurchase right of dissenting shareholders), which is not conducive to the protection of minority shareholders and the principle of fair merger. For another example, regarding the protection procedure of creditor's rights, it is too complicated to stipulate the announcement procedure of the merged company, and the effect of the creditor's objection is too strict, which is not conducive to the reasonable balance of the interests of creditors and shareholders, and is also not conducive to the boundary and efficiency of the merger.
(3) The market is imperfect, the intermediary agencies are underdeveloped, and the government's administrative intervention is too much, so it is difficult for the enterprise merger mechanism to really play its role.
Legal basis: People's Republic of China (PRC) Company Law.
Article 173 The merger of companies may take the form of absorption merger or new merger.
A company absorbs other companies for merger, and the absorbed company is dissolved. The merger of two or more companies to form a new company is a new merger, and the parties to the merger are dissolved.
Article 174 When a company is merged, all parties to the merger shall sign a merger agreement and prepare a balance sheet and a list of assets. The company shall notify the creditors within 10 days from the date of making the merger resolution and make an announcement in the newspaper within 30 days. Creditors may, within 30 days from the date of receiving the notice, or within 45 days from the date of announcement if they have not received the notice, require the company to pay off debts or provide corresponding guarantees.
Article 175 When a company is merged, the creditor's rights and debts of the merging parties shall be inherited by the surviving company or the newly established company after the merger.