Corporate take-over

The corporate take-over in everyday practice is divided into three distinct forms: the stock merger (otherwise known as an exchange of shares), the corporate merger and the judicial merger. The distinction can be found in the manner in which these corporations are joined together and the subsequent different fiscal-judicial and economic implications they bred for the shareholders and corporations involved.

A stock merger is characterized by the merging of two or more enterprises, on account of a transfer of stock by the shareholder(s) of one enterprise to the benefit of another enterprise, provided against the issue of shares. Then, the shareholder of the transferred enterprise will receive a share ownership in the acquiring firm.

During a corporate merger, two or more enterprises are joined together, as a result of the transfer of the assets and liabilities of one firm to another firm. The acquiring firm can pay for the transfer in cash or against presentation of own shares (the so-called share repurchase). In the latter, the surrendering firm will obtain a share ownership in the acquiring firm.

A judicial merger is an act in law, established by a notarized document in which two or more entities are incorporated, whereby either 1) one enterprise acquires the other’s capital by universal succession of title or whereby 2) a new enterprise, founded through this act in law by both enterprises, acquires the capital of both of these enterprises by universal succession of title. The involved firms seize to exist by law, with the exception of the acquiring firm. Due to the judicial merger, the shareholders of the disappearing corporations are to become by law the shareholders of the acquiring firm.

“A categorical imperative would be one which represented an action as objectively necessary in itself, without reference to any other purpose.”

Immanual Kant (22/04/1724 – 12/02/1804), German Philosopher

Van Clamsfield International Ltd. offers practical guidelines and detailed advice concerning:

1. Fiscal ramifications shareholders and attributable fiscal facilities;
2. Settlement of the fiscal account and applicable fiscal facilities (E.g. exemption of tax);
3. Legal requirements, conditions and implications of the corporate merger with and without ministerial approval;
4. Fiscal consequences and solutions for shareholders, depending on their fiscal status;
5. Legal requirements, conditions and implications of the judicial merger with and without ministerial approval;

Van Clamsfield International Ltd.’ approach is that of due diligence in corporate take-over analysis. Moreover, the primary aim is to make the various stipulations and apparent infinite possibilities of the taxation law, accessible to our clients to arrive at the appropriate application of fiscal facilities that adequately deal with the originated take-over profit.