General comments
The Federal Act on mergers (LFus) came into force on 1st July 2004. Its provisions have replaced the few existing rules; they form the legal basis allowing company restructuring operations.

In fact the new law does not only target mergers but four different restructuring operations: mergers, splits, transformations and asset transfers. These four operations allow universal succession, in other words, the transfer of assets and all of their constituent rights and obligations in one single deed, no longer requiring the forms governing the individual transfer of the various assets (recording on the land register for buildings, consent of the creditor to take back debts, etc.).

However, certain formalities still need to be observed in the transfer procedure.

Although the restructuring procedures set up by the new Act are relatively complex and detailed, small and medium sized companies can benefit from a lighter schedule, if all the partners agree to it.

The new Act, under certain conditions, also allows company restructuring with foreign entities.

Finally, tax laws have consequently been modified with the aim, whenever possible, of obtaining fiscal neutrality in operations. It should be noted that as of this year (2009), restructuring companies no longer have to pay cantonal and communal duty on the transfer of buildings.

Merger
A merger consists of bringing together several entities of an identical legal form (two public companies for example) or of a different form (one limited liability and one cooperative company for example) without having to liquidate them. Before the LFus was brought in, all of the partners of the various entities involved received shareholders' rights from the restructured company. Now the merger contract stipulates that partners can simply choose to be compensated, without receiving shareholders' rights; the contract can even impose compensation.

Split
A split means the transfer of a part of the assets from one company to another, in exchange for the attribution of shareholders' rights. This can involve a division (all of the assets are transferred to two entities and the transferring entity is wound up) or a separation (only some of the company's assets are transferred, the balance remaining within the transferring entity). Like a merger, a split therefore occurs in the dual continuity of assets and shareholding.

Transformation
Transformation is quite simply a change in a company's legal form. In such cases, the company's legal and economic relationships, such as work contracts or contracts with suppliers, will continue to be effective.

Asset transfer
The brand new institution of asset transfer allows companies to transfer all or some formally inventoried assets or liabilities to another entity. It is possible to imagine a whole range of transactions involved in company restructuring. But asset transfer can also be used to set up a subsidiary or joint venture (by a contribution in kind), for example. During such transfers, however, the partners involved do not receive shareholding rights as compensation.

Your notary
Your notary intervenes:

• as the main coordinator who prepares and organises all restructuring operations, bringing in other professionals if necessary (tax experts, inheritance experts, etc.).
• by mandate from one of the parties to the operation or their advisors, in particular to draw up contracts and authentication operations and to record the company on business and land registers.

In all cases, the notary executes the merger, split or transformation decision for the relevant entities. Sometimes the notary can also draft a certificate confirming the transfer of a building's ownership to be recorded on the land register. The notary may also be required in other cases, for example certain changes in the articles following restructuring operations (company name, prior modification of the corporate aim of the transferring entity, capital stock, etc.) or the winding up and liquidation of the transferring entity (in the case of asset transfer).

 

FaLang translation system by Faboba