Draft Terms of Merger and Public Notice to Creditors

The merger process begins with the draft terms of merger prepared by the Boards of Directors of the companies involved in the merger, which must be submitted to the Trade Register for registration within one month of signature. The draft terms of merger must be accompanied by an auditor’s statement to the merging companies concerning the grounds for a merger consideration’s size and distribution, and whether the merger will compromise repayment of the acquiring company’s debts.

A merging company, and in some cases the acquiring company as well, shall submit an application to the Board of Patents and Registration regarding public notice to the company’s creditors before due time. In some cases the creditors are entitled to object the merger. If a creditor objects to the merger, the merger may lapse.  A company can suspend the expiration proceedings by demonstrating that it has brought an action for an affirmation by the court regarding receipt by the creditor of either payment or full security for its receivables.