A division is a form of transformation whereby one company (called the “converting”) (whether an LLC or an JSC) is being divided into two or more companies (called the “acquiring companies”). The division consists in the fact that the transforming company is terminated without liquidation and a corresponding part of its assets, rights and obligations and activities pass to the acquiring companies. It is possible that some of the acquiring companies are newly created and others already established. In the case of conversion by division, the receiving companies cannot change their legal form (e.g. from LLC to JSC).
Procedure.
A. Conversion Agreement.
Before the conversion decision is made, a conversion contract is concluded between the receiving and/or converting companies participating in it. The conversion contract is concluded by the persons representing the company in writing with notarization of their signatures. The conversion agreement sets out how the conversion will take place and must contain at least the following elements: