Entrepreneurs often face with the necessity to modify the organizational and legal form of a legal entity. There are various reasons for this: for instance, a change in the direction of the company. Often in such circumstances, the founder wants to avoid the liquidation of the enterprise and chooses a reorganization. How to reorganize the company in the right way? To perform this process correctly, it is necessary to clarify what exactly is meant by the reorganization of a legal entity.

Reorganization of the enterprise includes termination or other change in the legal status of legal entities. Types of reorganization:​

  • merger;
  • affiliation;
  • separation;
  • allocation;
  • conversion.

Reorganization is carried out by owners, founders, bodies entrusted by them. This process can be whether mandatory or forcible. Mandatory reorganization is performed in cases determined by applicable legislation.

If the owner of the legal entity or the body authorized by it does not perform reorganization within the term prescribed by the judicial authority, the court appoints a manager, whose task is to reorganize this legal entity.

To ensure the company a more stable position in the market, it will be necessary to change the organizational structure of the legal entity. Such changes are associated with the desire of the founders to combine the business with another organization, or the desire to split the company (for example, in the event of a partnership relations disorder). Reorganization is carried out in accordance with one of the legally provided forms:​

  • In case of reorganization of an enterprise by merger, several legal entities form one new one.
  • Affiliation implies that the existence of one legal entity stops, and it completely merges with another.
  • Separation - a legal entity is divided into two (or more) entities;
  • Allocation implies that one is allocated from the legal entity, while the former continues to function.
  • Conversion is the transformation of a legal entity from one organization and legal form to another. The rights and obligations of the enterprise remain unchanged and are fixed on the basis of a special act.

In the event of reorganization of the enterprise, our specialists will draw up all the required documentation, prepare draft contracts, transfer deeds, and, if necessary, carry out registration in state institutions.

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