Facilitated Merger 2 August 2016
Merger can be defined as establishing a new Corporation through consolidation of two or more Corporation or joining of a Corporation to another existing Corporation. It is regulated in Article 136 and the rest of Turkish Commercial Code, and according to Turkish Commercial Code, merger is occurred by acquiring the shares of the transferee company by the partners of the predecessor company, in accordance with a rate by considering the predecessor company’s properties which join to the transferee company.
Considering the process and the documents that are prescribed by Turkish Commercial Code, it can be seen that merging is a long and difficult process. Here, the main purpose is to prevent any loss of a right of shareholders of predecessor company, especially the creditors’.
In order to protect creditors’ rights, the legislator has eased the process by adopting facilitated merger provisions in Turkish Commercial Code, for the situations where both acquired and predecessor companies do not lose any rights while preparing the necessary documents and fulfilling any other requirements for merger. In the article 155 and 156 of Turkish Commercial Code, the execution area and the conveniences of facilitated merger are regulated.
Conditions for Facilitated Merger of Companies with Share Capital
Conditions for facilitated merger of companies with share capital are regulated in Article 155 of Turkish Commercial Code. It should be noted that, facilitated merger is applicable only for companies with share capital and it could be possible only in two ways. Accordinly, transferee company has to hold either all or at least %90 of acquired company’s shares which give the right to vote.
Status of a transferee company with share capital that holds the acquired company’s all shares which give right to vote, is also possible in merger of two sister corporations. For example, if C stock company and real person D have all the shares ensuring to vote of merging A and B limited companies, this means that company A and B are sister corporations and under the same domination. Legislator approves facilitated merging for sister companies, as well. In the same way, 100% of the shares with right to vote of merging companies with share capital could belong to a Corporation, a real person, a heritage company or an ordinary partnership.
Facilities for Merger of Corporations under Article 156 of Turkish Commercial Code.
Necessary documents which must be prepared for the process of merging are listed in article 144 and the rest of Turkish Commercial Code. However, in facilitated merger, transferee and predecessor companies are held exempted from submitting some of the necessary documents. These exemptions differentiate regarding if the transferee company holds all or at least %90 of acquired company’s shares which give the right to vote.
Facilities which are provided in case transferee company holds the predecessor company’s all shares which give the right to vote, are regulated in article 156/1 of Turkish Commercial Code. Accordingly, a merger agreement is valid if it includes the records which are stated in article 146 (a) ,(f) and (i), that regulate the content of a merger agreement, of Turkish Commercial Code. So, it is enough for the validity of a merger agreement to have the commercial names, legal statues, headquarters of the merging companies; in case of merger through establishment, legal status of the new Corporation, its commercial name and its headquarter; and if required in according with Article 141, separation funds and names of unlimited partners. Besides, those companies have neither the obligation of preparing a merger report or providing a right to audit, nor the need to obtain the general assembly approval for merger agreement.
In case the transferee company holds at least %90 of predecessor company’s shares, merger agreement must include the records which are stated in articles 147/2 (a), (b), (f) and (i). Accordingly, in addition to the subjects listed in article 146; the merger agreement should also have the information on the main purpose of the merger and its consequences; if required the amount of the increase made by transferee company, the effects of the agreement on the employees and a social plan if required. Besides, merging companies have neither the obligation of preparing a merger report or providing a right to audit, nor the need to obtain the general assembly approval for merger agreement, however, merging companies with share capital are still obliged to provide the right of auditing.
Conclusion
Facilitated merger which is adopted with Turkish Commercial Code numbered 6102, shortens and simplifies the process of merger significantly for the corporations which fulfill the conditions prescribed by law.
Türkçe Versiyonu İçin
http://www.kasaroglu.av.tr/tr/27988/Kolaylastirilmis-Birlesme
