How to deal with the absorption and merger between companies? Great gods, help!

Company merger can be divided into two ways: absorption merger and new merger. According to the second paragraph of Article 184 of the Company Law, the company absorbs and merges other companies, and the absorbed company is dissolved. When two or more companies merge, a new company is established as a new merger, and the parties to the merger are dissolved. At the same time, corporate merger is different from corporate asset acquisition. From the legal point of view, the essence of corporate merger is the merger of corporate personality; The nature of asset acquisition is the sale of assets, which does not affect the company's personality. Corporate merger is also different from corporate equity acquisition. Corporate merger is essentially the merger of corporate personality; The essence of equity acquisition is the sale of equity, which does not affect the company's personality. In essence, equity acquisition and asset acquisition are both buying and selling behaviors, not the essence of corporate merger-the merger of corporate personality. [4] Operation method of company merger Absorption merger is the most common merger method. In the merger, the merged company will be eliminated. A company has three elements: assets, equity and personality. The destruction of the company is ultimately manifested in the destruction of the company's personality. Before the corporate personality is destroyed, the assets of the absorbed company can be transferred to the absorbing company, and the equity of the absorbed company can also be transferred to the absorbing company. Regardless of asset transfer or equity transfer, the consideration that the absorbing company can pay is generally cash or company shares. In this way, it can be logically divided into two types and four ways of absorption and merger. (1) 1 Transfer assets first, and the absorbing company will purchase all assets of the absorbed company in cash, including all rights and obligations (creditor's rights and debts). The absorbed company loses all its original assets and only has the cash paid by the absorbing company, and the absorbed company is dissolved. Because the creditor's rights and debts have all been transferred, there is no need for liquidation, and the shareholders of the absorbed company distribute cash according to the equity, which is eliminated by the absorbed company. 2. The absorbing company purchases all assets of the absorbing company with its own shares, including all rights and obligations. The absorption company loses all its original assets and only owns its own shares paid by the absorption company. The absorption company is dissolved, because all the creditor's rights and debts are transferred and there is no need for liquidation. The shareholders of the absorption company distribute the shares of the absorption company held by the absorption company, so they become shareholders of the absorption company and are eliminated by the absorption company. (2) The equity is first transferred to 1, and the absorbing company purchases the shares of the shareholders of the absorbed company in cash and becomes the sole shareholder of the absorbed company. Then, the absorbed company is dissolved, and all rights and obligations of the absorbed company are assumed by the absorbed company without liquidation. 2. The absorbing company exchanges its own shares for the shares of the absorbed company held by the shareholders of the absorbed company, so that the shareholders of the absorbed company become the shareholders of the absorbed company and the absorbed company becomes the sole shareholder of the absorbed company. Then, the absorbed company is dissolved, and all rights and obligations of the absorbed company are assumed by the absorbed company without liquidation. [5] Either way, the cash or shares paid by the absorbing company after receiving the assets or equity of the absorbing company are directly distributed to the shareholders of the absorbing company, so the shareholders of the absorbing company get cash or become shareholders of the absorbing company. [6] Procedures for Company Merger (1) When concluding a merger agreement, what main terms should be included in the merger agreement? There is no provision in the company law. In this regard, we can refer to the main contents of the merger agreement of foreign-invested enterprises stipulated in Article 2 1 of the Provisions of the Ministry of Foreign Trade and Economic Cooperation and the State Administration for Industry and Commerce on the Merger and Separation of Foreign-invested Enterprises (hereinafter referred to as the Provisions on Merger and Separation), namely: 1, the names, domiciles and legal representatives of the parties to the merger agreement; 2. The name, domicile and legal representative of the merged company; 3. The total investment and registered capital of the merged company; 4. The form of merger; 5. The creditor's rights and debts inheritance scheme of the parties to the merger agreement; 6. Staff placement measures; 7. Liability for breach of contract; 8. Ways to resolve disputes; 9. Date and place of signing the contract; 10. Other matters deemed necessary by the parties to the merger agreement. (II) The merger agreement is a major legal act leading to the redistribution of the company's assets, which is directly related to the rights and interests of shareholders and is a major event of the company. Therefore, the decision-making power of company merger is not in the board of directors, but in the shareholders' (general) meeting, all companies involved in the merger must agree to the merger agreement, and a special resolution needs to be passed by a majority of shareholders' (general) meeting. Articles 39, 66 and 106 of China's Company Law require that the merger of a limited liability company, a wholly state-owned company and a joint stock limited company requires a special resolution of the shareholders' meeting. Among them, the resolution of the shareholders' meeting of a limited liability company on the merger of the company must be passed by shareholders representing more than two-thirds of the voting rights; The merger of a wholly state-owned company shall be decided by the state-authorized investment institution or the state-authorized department; The shareholders' meeting of a joint stock limited company shall make a resolution on the merger of the company, which must be approved by more than two thirds of the voting rights held by the shareholders present at the meeting. (3) preparing balance sheets and property lists; (4) notifying creditors and making an announcement; Paragraph 3 of article 184 of China's company law stipulates the procedure of notifying creditors and the way of announcement. This article stipulates that the companies participating in the merger "shall not merge unless they pay off their debts or provide corresponding guarantees". It shows that the company law of our country gives the creditors involved in the merger the effect of preventing the merger procedure. In order to protect creditors, Article 32 of the Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Civil Disputes Related to Enterprise Restructuring stipulates: "When an enterprise absorbs or merges, it shall notify creditors by way of announcement with reference to the relevant provisions of the Company Law. After the enterprise is absorbed and merged, if the creditor sues the merging party for the enterprise debt concealed or omitted by the original asset manager (investor) of the merged enterprise, and if the creditor declares his creditor's rights within the announcement period, the merging party may recover from the original asset manager (investor) of the merged enterprise after assuming civil liability. If the creditor fails to declare his creditor's rights within the announcement period, the merging party shall not bear civil liability. The people's court may notify creditors to sue the original asset manager (investor) of the merged enterprise separately. (V) Approval of the competent authority Article 183 of the Company Law stipulates: "The merger or division of a joint stock limited company must be approved by the department authorized by the State Council or the provincial people's government. "Therefore, the approval of the competent authority is a necessary procedure for the merger of joint stock limited companies. (6) Repurchase right of dissenting shareholders who have gone through the registration of company change and cancellation. Repurchase right of dissenting shareholders means that shareholders who oppose the merger of companies have the right to ask the company to buy their shares at the fair price at that time. [7] The right of claim is the relief for the interests of dissenting shareholders. There are two different legislative examples about the object of application of the right of repurchase by dissident shareholders. The first legislative example, such as Germany, stipulates that the right of repurchase only applies to the shareholders of the absorbed company. The second kind of legislation, such as the United States, Japan and Taiwan Province, stipulates that the right of repurchase applies not only to the shareholders of the absorbed company, but also to the shareholders of the absorbed company. [8] For example, paragraph 1 7 of Article 3 of the Company Law of Taiwan Province Province of China stipulates that when a company merges with other companies, the board of directors shall conclude a merger contract on matters related to the merger, and put forward the shareholders' objection in writing or orally before or during the meeting. The recorded person can give up the right to vote and ask the company to buy its shares at the current company price. [9] Generally speaking, the absorption and merger of a company will have a significant impact on both parties to the merger. For the shareholders who absorb the merged company, they will also face major changes in the company's shareholding structure and asset structure. Therefore, the shareholders of the absorbing company, like the shareholders of the absorbed company, should also be given the right to buy back to reflect legal fairness. There is no provision on the repurchase right of dissenting shareholders in China's company law. Article 173 of the Guidelines for the Articles of Association of Listed Companies issued by China Securities Regulatory Commission stipulates that when a company is merged or divided, the board of directors of the company shall take necessary measures to protect the legitimate rights and interests of shareholders who oppose the merger or division of the company. But how to protect the legitimate rights and interests of dissenting shareholders is not the following. Only paragraph 1 of Article 149 of the Articles of Association of Overseas Listed Companies of China Securities Regulatory Commission stipulates that the merger or division of a company shall be proposed by the board of directors of the company, and relevant examination and approval procedures shall be handled in accordance with the procedures stipulated in the Articles of Association. Shareholders who oppose the company's merger or division plan have the right to ask the company or shareholders who agree to the company's merger or division plan to buy their shares at a fair price. The contents of the company's merger and division resolutions shall be made into special documents for shareholders' reference. However, the regulations of this department are not universally legally binding. From this point of view, the theory of legal interpretation can no longer solve the problem of dissident shareholders' right to repurchase, and can only be solved through legislation. Seven. Legal effect of company merger The legal effect of a contract is threefold: 1. The demise of the company here refers to the demise of the absorbed company. Because all the rights and obligations of the eliminated company have generally been assumed by the absorbing company, its dissolution is different from that of the general company, and the corporate personality of the company is directly eliminated without going through liquidation procedures. 2. The company changes as described above. 3. Article 184 of the Company Law and Article 90 of the Contract Law [10] stipulate the generalization of rights and obligations. Eight. Litigation on Invalidation of Company Merger The Company Law of our country does not directly stipulate the invalid system of company merger. However, because the merger of companies is a legal act of the companies involved in the merger based on the merger contract, if the merger violates the reasons for invalid merger, it can be regarded as the reasons for invalid merger as long as it violates the mandatory norms of laws and administrative regulations. In practice, violation of the following mandatory norms is the common reason why the merger of companies is invalid: 1, violation of the provisions of Article 38 and Article 103 of the Company Law, and the merger of companies should be decided by the shareholders' (general) meeting. 2. In violation of Article 183 of the Company Law, the merger of a joint stock limited company must be approved by the competent authority. 3. In violation of Article 184 of the Company Law, the creditor requires the company to pay off its debts or provide corresponding guarantees, and the company fails to pay off its debts or provide corresponding guarantees. (II) Correction of Invalid Reasons Although there are invalid reasons for company merger, in order to protect transaction safety and stabilize social relations, the parties concerned should be given the opportunity to make corrections before the court decides that the merger is invalid. Before the court makes a judgment, if the parties correct the reasons for invalidity, the merger shall be confirmed as valid. Article 30 of the Provisions on Several Issues Concerning the Trial of Civil Dispute Cases Related to Enterprise Restructuring stipulates: "The enterprise merger agreement shall take effect as of the date when the parties sign and seal it. If it needs to be approved by the competent government department, the merger agreement shall take effect as of the date of approval; Without approval, the enterprise merger agreement will not take effect. However, if the parties go through the approval procedures before the end of the debate in the court of first instance, the people's court shall confirm that the merger agreement is valid. " (3) Legal consequences of invalid merger 1. Return to the state before the merger. Upon merger, the eliminated company shall be separated from the surviving company, and the surviving company shall be changed. 2. Limitation of retrospective effect of invalid judgment. The judgment of invalid merger is only valid in the future and does not affect the legal relationship arising from the premise of valid merger. If the judgment of invalid merger goes back to the past, it will be invalid from the date of merger, which will affect the transaction security, lead to confusion of legal relations and harm the interests of the third party. 3. Liability for fault in contracting. The provisions of the last sentence of Article 58 of China's contract law. [1 1] Theoretically, there are three theories about the restrictions on the merger between different kinds of companies: (1) Freedom theory. It is thought that there should be no restrictions on the merger of companies. (2) Strict restriction theory. It is believed that only similar companies can merge, and the merged companies should still be similar. (3) The theory of moderate restriction. It is considered that appropriate restrictions should be taken on the merger of different types of companies.