Types of merger
When two or more companies merge, they dissolve to form a new legal entity which includes the whole of their capital. Alternatively, the most powerful partner may absorb all of the capital or the other companies altogether by acquiring their assets and liabilities.
There are three (3) types of mergers:
1) absorption, 2) acquisition, 3) formation of a new company.
The competent body for ensuring acquisitions are carried out properly is the Capital Market Commission, which:
- supervises, among others, public limited companies that offer the following services: brokerage, investment services, mutual fund management, portfolio investment, real estate management and investment intermediation;
- makes sure that companies on the Athens Stock Exchange follow financial legislation for the benefit of investors' protection;
- is responsible for approving information bulletins for those interested in investment when public offers are being made and when transferable securities are being introduced into a regulated market;
- imposes penalties (reprimands, fines, suspension of activities, licence revocation, etc.) to the legal and natural persons it supervises and who do not comply with the laws governing the capital market.
Buying an existing company, with an already established structure, can be a good way of expanding your business.