Enterprise merger includes three forms: enterprise merger, business transfer and enterprise acquisition.
1. Initially determine the merging party and the merged enterprise.
The merging party and the merged enterprise are generally initially determined through the property rights market or direct negotiations.
2. Asset verification and financial audit.
Enterprise merger must be decided by the unit directly holding state-owned property rights to hire a qualified accounting firm to conduct financial audit. If an enterprise is transformed into a non-state-owned enterprise through merger, the legal representative of the enterprise shall also conduct an outgoing audit. The merged enterprise must provide relevant financial and accounting materials and documents to accounting firms or government audit departments in accordance with relevant regulations.
3. Asset appraisal.
If an enterprise reorganizes by merger, it must evaluate its assets in accordance with the provisions of the Measures for the Administration of State-owned Assets Evaluation. The scope of asset appraisal includes fixed assets, current assets, intangible assets (including intellectual property rights and goodwill, but excluding state-owned land use rights regarded as intangible assets) and other assets. If a non-state-owned investor merges an enterprise, the unit directly holding state-owned property rights decides to hire a qualified asset appraisal firm to conduct asset appraisal.
4. Determine the floor price of property rights.
The merged enterprise shall reasonably determine the selling reserve price on the basis of the evaluation value confirmed by the relevant competent department. The transaction price can be determined by bidding. The transaction price shall not be lower than the reserve price (but the transaction price is allowed to fluctuate to a certain extent on the basis of the reserve price. If the floating price is lower than 90% of the assessed price, it must be approved by the state-owned assets management department at the same level).
5. Sign the merger agreement and manage the transfer price.
6. Go through the legal procedures of liquidation and property right transfer.
7. Commitment of rights and obligations and placement of employees.
Due to the merger, the merged enterprise inherits the creditor's rights and debts of the merged enterprise.
For the holding merger, because the legal person qualification of the merged enterprise has not been eliminated, the debts of the controlled enterprise are still borne by the merged enterprise. Of course, unless the holding company withdraws its funds and evades its debts, the controlled company will be unable to repay its debts. The employees of the merged party shall be accepted by the merged enterprise in principle.
Legal basis:
Article 173 of the Company Law of People's Republic of China (PRC) 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.