When a transfer or merger comes up
You are selling your company or your share
We discuss what the sale should bring you, prepare the company for the buyer's review and negotiate the share transfer agreement.
You are buying another company
In an acquisition we review the target through due diligence and reflect the findings in the price and in the seller's warranties.
The shareholders are changing
We prepare the share transfer, the general meeting's consent and the amendment to the articles of association so that the company keeps running without disputes.
You want to bring two companies together
We propose a merger by acquisition or by formation of a new company, draft the merger plan and set the timetable with your accountant.
You are handing the company to the next generation
We prepare the transfer of shares to your children and the rules for decision-making until the management is handed over in full.
You want to close the company
We consider with you whether a sale would pay off better, then carry out the liquidation from the shareholders' decision to deletion from the register.
How a transaction runs, step by step
The timescales are indicative. They depend mainly on the size of the company and on how quickly we receive the documents.
The goal and the form of the deal
At the free first consultation we discuss the goal and recommend whether to transfer a share, sell the business as a going concern or merge the companies. Usually within the first week.
Reviewing the company
We go through contracts, debts, disputes, employees and assets, and discuss the tax impact with your tax adviser. Two to six weeks depending on the size of the company.
Agreements and approvals
We negotiate the share transfer agreement or the merger plan and prepare the general meeting resolution. A merger plan is published at least one month before it is approved.
Signing, payment and registration
The purchase price can be held in an attorney escrow account until the conditions are met. We then arrange the entries in the Commercial Register and the Register of Beneficial Owners.
What to watch out for
These are the points where transactions most often stall.
What the articles of association say
They may restrict a share transfer, give the other shareholders a right of first refusal or require the general meeting's consent. That is why we read them first.
A share or the business itself
Whoever buys a share takes over the company with its old debts. When a business is bought as a going concern, its contracts, employees and the debts the buyer knew or must have known about pass to the buyer.
The seller's representations and warranties
What the seller says about the company should have a clear consequence in the contract if it turns out to be untrue.
Consent of the bank and business partners
Loan, lease or licence agreements may require the other party's consent to a change of owner, so we look for them during the review.
Figures as well as law
We look at the economics of the deal too
A notary certifies the general meeting resolution and can enter the change in the register directly. We handle what comes before that, meaning whether the price matches the state of the company, how and when the money is paid out and what the transaction does to the taxes of the seller and the company.
We discuss the tax impact with your tax adviser or accountant before anything is signed.
- We advise whether to sell a share or the business, or to split the company first
- We tie the purchase price to the actual state of the company on the transfer date
- We split the payment of the price into stages tied to the agreed conditions
The firm in numbers
- 20 yearsof legal practice
- 180+long-term clients
- 95%of new clients come through referrals
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Frequently asked questions about transfers and mergers
Short answers to what business owners ask us most often. We look at your specific transaction at the first consultation.
How does a share transfer in a Czech limited liability company work?
The transfer is made by a share transfer agreement, which must be in writing with officially certified signatures (Section 209 of the Business Corporations Act). An attorney's declaration of the authenticity of the signatures can replace the certification. A share can be transferred to someone who is not a shareholder only with the consent of the general meeting, unless the articles of association provide otherwise. The transfer takes effect towards the company when the agreement is delivered to it, and the change is then entered in the Commercial Register.
What is due diligence and what does it cover?
Due diligence is a review of a company before it is bought. The legal part covers contracts, debts and security, court disputes, assets, permits and the contracts of key staff. The financial and tax part is done by an auditor or tax adviser. The result shows the risks that go into the price or the warranties in the contract, and sometimes a reason to walk away.
What is an acquisition and how does it differ from a merger?
An acquisition means taking control of another company, most often by buying a share or stock, or by buying its business as a going concern. When a share is bought, the company continues to exist and simply has a new owner. In a merger the companies combine into one. In a merger by acquisition the assets and liabilities of the dissolving company pass to a company that already exists, while a merger by formation creates a new one.
How long does a merger of companies take?
Usually several months. The merger plan is published at least one month before it is approved, so that creditors learn about it. The merger resolution is recorded by a notary and the merger only takes effect when it is entered in the Commercial Register. The effective date may not precede the filing of the registration application by more than twelve months (Section 10 of the Act on Transformations of Companies and Cooperatives), so we plan the dates with your accountant from the start.
How does a company liquidation work and how long does it take?
The shareholders decide to dissolve the company with liquidation and appoint a liquidator. The liquidator publishes a call to creditors at least twice, inviting them to file their claims within a period of at least three months from the second publication. The liquidator then sells the assets, settles the debts and distributes what is left among the shareholders. The company ceases to exist when it is deleted from the Commercial Register, so liquidation takes at least several months. If the company cannot pay its debts, the liquidator files an insolvency petition.
What does a transaction cost and what will you learn at the first consultation?
The first consultation is free and takes at least half an hour, in person in Zlín or online. We discuss your plan, and at the end you know how we would proceed and what the work would cost. The price depends mainly on the size of the company and the scope of the review, and we agree it in advance. Notary and court fees are separate.
