The reporting requirements on company mergers and demergers have
been relaxed with effect from 31 December 2010.
The changes implement EU merger rules by exempting
merging/demerging companies from the need to provide certain
documents and information to shareholders when it doesn't
prejudice their rights and interests to do so.
When all shareholders of the merging/demerging companies agree,
companies no longer have to provide:
- the report of the managing bodies about the merger/demerger terms, particularly the share exchange ratio
- accounting statements for the month before the date of the draft merger/demerger agreement/plan
- information from the managing bodies about material changes in assets/liabilities between the date of the merger/demerger report/agreement and the date of the general meeting to vote on the merger
Companies providing shareholder access via their website to
merger/demerger documents and materials no longer need to make them
available at their registered management address.
Companies may also send merger/demerger documents by to
shareholders who have consented to receiving it in this way.
There are reduced reporting and disclosure requirements when
a parent merges with one or more of its subsidiaries and the
newly-merged company owns more than 90% of its predecessor(s) , and
when a company demerges into new companies owned in the same
proportions as its predecessor.
Law: amendment of Commerce Act
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 17/02/2011.