THE ROLE OF THE LAWYER IN COMPANY MERGER
The role of the lawyer in the company merger is too important to be denied. It is rightful that we first talk about the concept of the company before the subject why is lawyer so important in the merger of the company. Thus, it will be better understood why the role of the lawyer in corporate unions is so important. The company refers to two or more people bringing their goods and labor together to earn profit. The Company is a legal entity established under the provisions of the Turkish Commercial Code. Company merger law turkey
A legal personality independent from the parties of the contract is arisen with the preparation of contracts in trade companies. The legal entity of the company comes from the capital committed during the establishment by the persons signing the company’s main contract. Thus, the legal personality of the company arises as having assets independent of the assets of the partners. It is inevitable that some problems or questions arise in the union of the companies established in this way.
The lawyer working together will inform the person concerned about the problems that may arise during the company merger and will be able to resolve the problems as they are for the benefit of the people. That’s why the lawyer’s role in company unions is great. The lawyer also has a big importance in the negotiations to be held during the company merger and in the contracts to be prepared. As the conditions of the merger and the arrangement of the contract require attention, care and legal knowledge, there needs help to be taken from a lawyer in these matters. Otherwise, it will not be possible to avoid any future problems or loss of interest, and losses that are troublesome in compensation will occur.
Company mergers usually occur as a combination of two companies. But sometimes different situations can emerge. There are two types of merger in our law. The first is the takeover, and the second is the union through the new establishment. In these matters, it is necessary to apply to lawyers in order to obtain accurate and sufficient information. In any case, the role of a lawyer in company associations is much more than it is supposed and consulting an expert lawyer in such matters that directly affect the company’s future will definitely be useful. Company merger in turkey
What is The Role of the Lawyer in the Company Mergers Agreement and how is the Company Associations done?
We have already mentioned that there can be two different types of corporate union in our legal system and in the Turkish Commercial Code. First of them is the acquisition of a company by another company with assets and liabilities. And the other one is union as a new organization realized by two different companies in order to form a new company. Company mergers are realized when the shares of the acquiring company are automatically acquired by the shareholders of the transferring company at a certain rate of exchange for the assets of the transferred company. As a result of the merger, the acquiring company will have acquired the assets of the transferred company as a whole together with its assets and liabilities. At the same time, we should also mention that the company assigned as a result of association expires and its record in the trade register is deleted. Company merger law turkey
It is also possible for a company that is in the process of liquidation to join the merger. However, for this reason, it is necessary that the company is in the position of being transferred and at the same time, the distribution of its assets has not yet been realized. It is possible to join the merger if the company meets the conditions. The existence of the conditions must be proven by presenting a report confirming this by the transaction auditor to the director of trade registry at the location of the headquarters of the company that transferee. At the same time, the companies with the loss to the half of the sum of the capital and legal reserves and the companies sunk in debt can unite with another company. So, it is necessary to unite with a company that has the net assets to compensate for the lost capital or the lost wreck and save freely. Otherwise, such merger will not be possible.
The preparation of the company union’s agreement and its registration must be carried out in accordance with being loyal to the legal procedures. The role of the lawyer in company mergers arises at this point. The deficiencies in the legal procedure will cause the companies being talked about to suffer great losses due to the continuity of their commercial lives. For this reason, we must say that the role of the lawyer is very important in corporate unions. In order to complete the legal procedure correctly and completely, the assistance of a specialist attorney dominant to the relevant legislation will be useful for the future of the company.
Partnership Shares and Rights in the Company Merger Agreement
One of the important issues that we need to discuss about the role of the lawyer in company mergers is partnership interests and rights. First of all we have to say that the partners of the transferred company have the right to ask for the existing partnership shares and at the same time the rights on shares and rights that the acquiring company owns. When the rate of change of the partnership shares is determined, it may be foreseen to pay an equalization payment not exceeding 1/10 of the real value of the partnership shares allocated to the partners of the transferred company. Company merger agreement
Equivalent rights can be given to the transferring company or an appropriate provision can be made in return for the concession rights related to the shares existing in the transferred company. However, the acquiring company will have to give the equivalent rights to the owner of redeemed shares of the transferred company or acquire dividend shares at the actual value of the date on which the merger agreement was made. Finally, it should be noted that if there is a time elapsed for more than 6 months between the signing of merger agreement and the date of the balance sheet date, or if there is a significant change in the assets of the companies participating in the merger, then the merging companies will have to bare the balance sheet sometime. At the point of learning and preparing all these issues, we see how important the role of lawyers is in company merger.
How to Write a Company Merger Agreement
When talking about the role of the lawyer in the merger of the company, we would not have been able to pass without mentioning the merger contract. Too much need for lawyers is needed especially when a merger agreement is being prepared. The merger contract must be made in written form. The contract is signed by the governing bodies of the companies participating in the merger and then presented to the general assembly. A number of quorums must be provided for the approval of the contract by the General Assembly. This issue has been regulated in the 151st article of Turkish Commercial Code. If the quorums that are to be reached in the general assembly are reached, the merger contract will be approved. The company merger has to be registered in the trade register for validity. With registration, all assets and liabilities of the transferred company will be transferred to the transferring company. At the same time, the merger decision will be announced in the Turkish Trade Registry Gazette. Company merger in Turkey
Matters required in the merger agreement are:
• The title of the companies participating in the merger,
• Centers and legal forms of companies,
• Trade name and center of the new company,
• The form of changing company shares,
• Separation agreement in necessary situations,
• The rights that the transferee company will give to the beneficial owner of the shares and special shareholders,
• Rate of change of company shares,
• Amount of offsetting
The role of the lawyer in the incorporation of the company cannot be denied in terms of not passing the required points and preparing a complete contract. It would be useful to consult a specialist lawyer in the field in order to get accurate information about the merger of the company and to improve the process in a flawless manner. Expert company merger lawyer
Things to be considered in Mergers and Acquisitions of Companies
There should be at least two companies in the company merger. The form of merger in which a company takes over another company is called as acquisition merger, and association of two or more companies into a new company is called as new establishment merger. There are various standards and special procedures in both types. The conditions for the unification of the companies are realized during the bidding period. In this period, we see the role of the lawyer in the company association until the very last detail.
The fact that what kind of circumstances may the procedures included in the bidding texts lead to your company and legal aspects of the business must be entirely under the control of your lawyer. In case companies are separated before merger the companies mutually have information given compulsorily to each other during the bidding process. A confidentiality agreement is made between companies to prevent abuse of any information that should be kept secret in a company by any party. If you want your company to operate in a healthy way before and after the merger, you need to know the role of the lawyer in the union of companies very well.
Preparation of Agreements of Partners
The priority in many agreements like the partner’s agreement between companies is not for company interests, but whether they comply with the law or not. Because, the contracts that are not legal may cause loss of your company. As you all know, such contracts must first be drafted or prepared in accordance with the law and then in accordance with the interests of the company. The fact that agreements required to be prepared in this way may lead to major problems. Even today, when it is necessary to obtain consultancy services from expert lawyers in the field, each firm prepare illegal contracts consciously or unconsciously. If you want to stay away from the negative effects of such contracts, you should definitely work with specialist attorneys in the field or with the institutions including these lawyers. Merger in Turkey