When the demand to expand the business and change the organizational structure grows, acquisition is a common way to develop synergy in the company. However, many organizations find that completing acquisition procedures is difficult. As a result, we will discuss acquisition of companies and relevant regulatory issues in this article so that clients have a better overview of this regulation.
1. What is acquisition of companies?
An acquisition of a company or companies occurs when one or several companies transfer all assets, rights, obligations, and lawful interests to the acquiring company, after which the acquired company or companies will cease to exist.
Previously, only companies of the same type can be acquired. However, according to the current legal regulations, various types of companies are now allowed to proceed with an acquisition.
3. Acquisition procedures
4. Legal consequences post acquisition.
After the acquisition, the acquired company ceases to exist. The business registration authority updates the status of the acquired company on the national enterprise registration database. Additionally, the rights, obligations, and assets will be transferred to the acquiring companies.
The acquiring company inherits the lawful rights and interests, liabilities, indebtedness, employment contracts, and other obligations of the acquired company. This company automatically inherits all legal rights, obligations, and interests of the acquired companies under the acquisition contract. The business registration authority revises the Certificate of Enterprise Registration of the acquiring company. Simultaneously, the acquiring company continues to perform obligations as well as pay debts (if any) for the acquired company or companies.
5. The advantages of acquisition
In fact, the acquisition of companies benefits both the acquired company and the acquiring company, specifically as follows:
The aformentioned information on acquisition of companies and relevant regulatory issues is brief. Because it is a complex procedure, our team of legal experts are available to respond to queries, related inquiries and/or provice professional guidance to complete business acquisitions efficiently and effectively. Please contact us via hotline +84-916-545-618 or email hung.le@cnccounsel.com and thanh.tran@cnccounsel.com.
