Generally, when undergoing a transformation, both the corporate legal framework and the tax implications must be considered. The legal framework for the transformation or restructuring of a company is primarily defined by the Transformation Act (UmwG), which distinguishes between changes of legal form, mergers, and demergers.
Change of Legal Form:
This form of transformation refers to cases where existing companies are converted into other types of companies (for example, a GmbH into an AG, or a partnership into a corporation). This process must be notarized and involves specific legal regulations and formalities.
Merger:
A merger occurs when an existing company is merged into another existing company, meaning it is absorbed by that company. Essentially, the company being merged into another company ceases to exist within the existing company.
Demerger:
In a demerger, the assets of one legal entity are divided among one or more other legal entities.
We will assess with you whether a restructuring of your company through a transformation is advisable from a business perspective. We also work closely with our tax advisors, who support the entire corporate legal process. Since tax reasons are often the primary motivation for a transformation, this integrated approach is essential for comprehensive advice, in our understanding.
