Mergers - France
Mergers are governed by the following legislation:
Types of merger
Any business can take part in one of the following merger operations:
Merger by incorporation
This merger is an operation in which an 'absorbed' company transfers all its assets to a 'surviving' company. This increases capital for the surviving company and also allows the absorbed company to be dissolved without it having to go into liquidation.
Merger by setting up a new company
This type of merger occurs when at least two companies merge to create a new company. The advantage here is increasing capital for the surviving company and allowing the absorbed company to be dissolved without it having to go into liquidation.
- exchange of ownership interests (shareholders acquire the same status as the surviving company);
- equalisation payments (i.e. for shares or batches of shares in the event of redistribution).
Two tax systems apply to mergers:
- common law system;
- special system.
Buying an existing company, with an already established structure, can be a good way of expanding your business.
To successfully complete a merger, business owners must:
- draw up a merger plan after taking legal advice;
- submit the merger plan to the office of the commercial court ;
- publish a notice of the merger plan in the legal notices of each local district where the head offices of participating companies are based;
- obtain approval for the plan at an extraordinary general meeting of shareholders;
- file a declaration with the office of the commercial court, outlining all actions carried out and certifying that the operation has been completed in accordance with regulations.
The merger of two limited liability companies (SARL) follows a different procedure.
The general directorate for competition policy, consumer affairs and fraud control (DGCCRF) oversees how the rules on economic concentrations are applied.
The business support and economic development observatory provides information on policies for supporting businesses and compares practices for supporting business development.
Check also the legislation on this topic in: