Business transformation

Transformation of companies are the ways of winding up a company without liquidation. All rights and obligations of the dissolved company, including rights and obligations arising from labor relations and also property and companions of the original company are transferred to the legal successor or successors.

Transformation can be or a legal merger into one or more legal entities - the successor company or companies, or the distribution of existing businesses, or combinations of these processes. The term transformation is also used to change the legal status of companies, as it is to change a limited liability company into a joint stock company, etc.

Transformation within the meaning of the act on transformation of commercial companies and cooperatives are mergers of companies or cooperatives, division of companies or cooperatives, transfer of assets, change of legal form and the cross-border transfer of registered office.


Act No. 125/2008 Coll., The transformation of commercial companies and cooperatives, as amended

The main types of transformations of companies


A merger is simply a combination of two or more existing companies.

Mergers of companies may be by acquisitions or by merger of equals.

The acquisitions means that the merged company cancels and then terminates and its assets, rights and obligations are transferred to another existing company, the acquiring company, whose members also become companions of the repealed company. The acquired company or cooperative is dissolved and its assets are transferred to the acquiring company or cooperative. The successor company or team enters the legal status of the company or association, unless a special law provides otherwise.

Under the acquisition shall also be considered if the dissolving corporation or limited liability company mergers with a successor corporation, or limited liability company, which is its sole shareholder. Both, acquired and acquiring companies or cooperatives, are participating parties.

The merger of equals means that two or more companies cancel and then terminate to form a completely new company. Two or more companies or cooperatives transfer their assets to a successor company resulting from the merger. The acquiring company enters the legal status of the company or cooperative, unless a special law provides otherwise.

Participating parties are only acquired companies or cooperatives.

The legal status of the founders of the acquiring company have only the acquired companies or cooperatives.

Acquired and acquiring companies must have the same legal form. Cooperatives may merge only with the cooperative.

Mergers may be domestic or cross-border.

The legal effects of the merger occur on the date of registration of the merger in the commercial register.

If a successor company or cooperative has a registered seat in another EU Member State than in the Czech Republic, the legal effects of the cross-border mergers in the Czech Republic occur on the date on which occurs the effects of cross-border merger abroad.


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Transfer of assets to a partner
Change of legal form

Conversion of a company is permitted even when the company went into liquidation, if this is done at the discretion of its members or its competent authority - the general meeting or meeting of members, or after the expiry of the period for which the company was established, or if the purpose for which the company was established has been acheved or by a court decision on the cancellation of the company or cooperative liquidation, if the court set aside its decision to cancel the operations of companies or cooperatives. If the company or cooperative in liquidation is being converted for any of the above listed reasons, the liquidation terminates as of the date, when the company or the competent authority of the company or cooperative approved the conversion.

It is necessary for the transformation of the company in liquidation that the companions or the competent authority canceled the decision to enter into liquidation at the latest, until they started with the distribution of the balance. The effective date of this decision shall also cancel the activity of a liquidator and statutory bodies may initiate procedural steps necessary to implement the chosen method of transformation of society.

Merger or transfer of assets are admissible even if the company is insolvent or that already a bankruptcy settlement was permitted.

The decision to transform the company can be canceled until a decision authorizing the registration of the transformation in the Commercial Register, with the agreement of all participating companies.


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