Types of merger
The term merger is used in cases whereby under the merger plan:
- One or more companies transfer their assets and liabilities to an existing business.
- Where two or more companies transfer their assets and liabilities to a new business which they themselves set up.
- Where a limited liability company transfers its assets and liabilities to a business managing its debenture portfolio.
Following a decision by the General Assembly, the whole scheme has been adopted by a Court Order.
Merger by incorporation
It is necessary to have a draft merger, approved by the CEOs of the companies involved, and by courts.
Merger by setting up a new company
The merger is achieved by a decision of the General Assembly and approval by a competent Court’s Decree.
The decisions of the General Assembly of the two merging companies are needed, along with court decisions of the countries involved or the competent Member State authority in general.
Cross-border mergers of EU businesses are also possible in two ways:
- Merger following assimilation, where an existing business assimilates one, two or more other businesses which are simultaneously dissolved;
- Merger following dissolution between two or more companies based in different EU countries - the newly formed company is then registered in either Cyprus or another EU country as a new business.
Buying an existing company, with an already established structure, can be a good way of expanding your business.
The company classification of the Department of Registrar of Companies and Official Receiver of the Ministry of Commerce oversees the registration, monitoring, supervision and removal from the register of local companies, non-Cypriot companies, partnerships and trading names.