Oct 23, 2024
Navigate the complexities of business restructuring in Uzbekistan. Understand the types of reorganization and the crucial steps for successful state registration.
The Concept and Types of Reorganization of Legal Entities
Reorganization signifies a fundamental alteration to a company's structure, where existing entities may cease to exist while new ones emerge. According to the Civil Code, there are five primary forms of legal entity reorganization: merger, accession, separation, allocation, and conversion.
Merger
A merger involves the creation of a new legal entity to which all rights and obligations of two or more existing legal entities are transferred, with the original entities subsequently liquidated. All rights and obligations pass to the newly formed entity via a transfer act. For Limited Liability Companies (LLCs), the general meeting of participants of each merging company decides on the reorganization, approves the merger agreement and the transfer act. A joint general meeting then approves the new entity's charter and elects its governing bodies. It is important to note that the Law on JSC (Article 93) does not permit the merger of a joint-stock company with legal entities of a different organizational and legal form. Merging Joint Stock Companies (JSCs) enter into a merger agreement defining the process and the conversion of shares into shares of the new entity.
Acquisition (Joining)
Separation (Division)
Allocation (Spin-off)
Conversion (Transformation)
Steps for State Registration of Legal Entities During Reorganization
Step | What is Needed? | When is it Needed? |
1. Decision on Reorganization | Formal decision by participants/shareholders of the company(ies) on the chosen reorganization form (merger, accession, separation, allocation, or conversion). | First step in the reorganization process. |
2. Creditor Notification | Publication on Unified Portal of Interactive Public Services (my.gov.uz), personal notifications (registered letters), or media messages. | Within 30 days from the date the last of the reorganized enterprises makes the decision. |
3. Comprehensive Inventory | Complete inventory of all property, accounts receivable, and accounts payable for each company involved. | Before preparing the transfer act. |
4. Final Financial & Tax Statements | Final financial and tax statements for each reorganized company, based on NAS No. 23. | Before the entry is made in the Unified State Register of Business Entities regarding termination of activities (for merger, accession, separation, conversion). |
5. Preparation & Approval of Reorganization Documents | Transfer Acts for each company, general Reorganization Agreement, new Constituent Documents for legal successor(s). Approval at a joint meeting of participants/shareholders. | Before state registration application. |
6. State Registration Application | Application submitted to the Public Services Center with all required documents. | Within 30 days from the date of the joint meeting where documents were approved. |