The merger procedure is multi-stage and requires a lot of work. During its duration, the merging company authorities must fulfil a number of obligations relating to the preparation of the merger plan, reports and other documents.
one of the obligations following at the final stage of the merger, is the filing to the registry court by the board of each of the merging companies of the merger resolution, in order to enter in the register a reference to such a resolution (Article 507(1) KSH). This seemingly simple obligation can cause at least a few problems.
When does the recipe apply?
first Doubt already concerns the need to apply Article 507(1) KSH in case of merger procedure by setting up a new company. The provision requires the indication: ‘Is the merging company the acquiring company or the acquired company’. The formulation of a recipe may raise doubts.
In the event of a merger by setting up a new company, we are not dealing with the acquiring company or the acquired company.
The drafting of a provision may therefore lead to the conclusion that the obligation to submit a merger resolution concerns only the merger by acquisition, since it is referred to here as indicating whether the merging company is the acquiring company or the acquired company.
In turn, the provision does not state whether the company is a company which merges by setting up a new company or a company created by such a company. However, this would be a false conclusion.
For substantive reasons (in particular for reasons of Article 507(2)(3), where it is already clear that the merger by setting up a new company) has no reason to say that the disposition Article 507(1) KSH only concerns merger by acquisition. This provision therefore also concerns the merger by setting up a new company.
What does it mean to write a reference?
The answer to these questions is difficult because Article 507(1) KSH is extremely enigmatic, especially in the light of the provisions of the National Court Register Act.
It is further complicated by the fact that, in connection with the merger, an application for an entry for an amendment to the contract of the acquiring company must also be submitted, or an application for entry in the register of the company created by the merger.
The wording concerning the inclusion in the register of the “notification” of the resolution is incompatible with the terminology of the KRS Act. The term “inscription” does not appear there.
The provisions of the KRS Act provide for disclosure of merger information with other entities (in section sixth register of entrepreneurs), but it is about entering a merger already made, not just adopting a merger resolution (which is only one from the stages of such a connection).
The inclusion of the reference is therefore not the same as the inclusion of a merger of companies and constitutes another additional obligation for the boards of all merging companies.
How do I register the announcement of the merger?
The merger shall be entered in accordance with the general rules, using the appropriate ‘W’ form, accompanied by the form WH. Writing a reference is more complicated.
Some of the representatives of the doctrine are of the opinion that since the Executive Regulation of the Minister of Justice to the KRS Act does not provide for a separate proposal to enter a reference to the adoption of a merger resolution, it is appropriate to submit an application on the KRS-ZH form concerning the change of data in the register of entrepreneurs. According to these representatives, the mention of the adoption of a merger resolution is entered in the register in the section sixth the register of entrepreneurs.
Other representatives of the doctrine stress that the provisions of the KRS Act do not provide for the possibility to enter such a reference, so it is not possible to submit an application on the KRS-ZH form. Therefore, a general provision should be applied Article 9(2) KRS Act.
According to him, if a specific provision requires the registration court to report certain data or to enter them in the register, and these data are not subject to the provisions of the NRS Act of entry in a specific section of the register, the documents containing these data shall be submitted to the register file.
Only that, based on the application for registration documents, the referee cannot enter a reference to a merger resolution in the register.
Interestingly, none of the positions can be attributed to the name ‘overriding’ and the views of the alerts referents are different in this respect. Some referendars manage return of the application submitted on the KRS-ZH form considering that it is not a basis for entering the reference.
Others, acting on the basis of a request for documents to be entered in the register files, shall issue provisions on the notification of a resolution on merger to the file without making any "notice entry". Therefore, no solution guarantees that the merger resolution is recorded in the register.