Reorganization of enterprises

Significant changes in the functioning of the Ukrainian economy, new challenges and new opportunities put domestic business in front of the need to respond to these challenges, adjusting the development strategies of companies in dynamically changing market conditions. One of the effective tools for such a response in the field of corporate law is the reorganization of enterprises. The need for such an operation may be due to many factors, such as the division and absorption of a business, the withdrawal or consolidation of assets, the allocation of rights and obligations, tax optimization, etc.
There are the following types of reorganization of enterprises: separation, merger, accession, separation, transformation.

Highlight

A spin-off is a type of reorganization of an enterprise, as a result of which a new one is separated from an existing legal entity by transferring part of the assets to a newly created enterprise. The creation of a new legal entity does not entail, in the event of reorganization by spin-off, the consequences in the form of the liquidation of the previously existing legal entity from which this spin-off occurred. The spin-off looks somewhat isolated from other types of reorganization, since this is the only type of reorganization that does not entail the liquidation of a legal entity.

Separation

Division is a reorganization of a legal entity, as a result of which two or more new legal entities are created, and the original enterprise ceases to exist. The assets and liabilities of the liquidated enterprise are divided between the established legal entities. The created legal entities are successors of the liquidated, as a result of division, enterprise.

Merge

In the event of a merger, the assets and liabilities of enterprises are transferred to the successor legal entity created by them as a result of the merger. At the same time, the enterprises themselves are liquidated as a result of the procedure.

Join

In contrast to the merger procedure, when merging, only the acceding legal entity ceases to exist. The enterprise that has annexed this legal entity (successor) shall transfer its assets and liabilities.

Transform

The transformation of a legal entity involves a change in the organizational and legal form of the enterprise, as a result of which one legal entity ceases to exist, on its basis another legal entity is created. State registration of a legal entity created by transformation is carried out at the location of the legal entity that terminates its activities. All rights and obligations of the reorganized enterprise are transferred to the newly established enterprise.