Merger, conversion, groups : chapter 13

• Date: 01 January 2008
• Published date: 01 January 2008
• Author: Christoph Jaehne
• DOI: 10.10520/EJC74082
• Pages: 199-206

199

CHAPTER 13

MERGER, CONVERSION, GROUPS

13.1 Introduction

As both entities play an important role in their respective economies,

it is relevant to discuss in which way provision is made in case the

organizational form of the entities changes. It will be interesting to

see if closeness of the entities ref‌lects on these matters. Regarding

the GmbH the ‘Umwand lungs gesetz’ of 1995 (Act on Con ver sions

and Mergers) is relevant.

13.2 GmbH

Until 1995 the Law on Conversions and Mergers was found in different

Acts,1 which is why the Federal Ministry of Justice presented a Go-

vernment draft for the adjustment of the Law on Conver sions. This

draft proposed changes through which all merger and conversion

proceedings of all corporational forms should be concentrated and

regulated in one Act regardless of the various legal forms.2

This draft has since been enacted and became the new ‘Umwand-

lungs gesetz’ of 1995.3 This new Act (and associated tax legislation)

enables business enterprises to change their legal status with rela-

tive ease and with minimal adverse f‌iscal consequences. The owner-

ship of the enterprise is deemed not to change. Under these new

regulations mergers and divisions are made easier as are conver-

sions from corporate to non-corporate forms (and vice versa). The

1 For a shor t reader, cf. Rose/Glorius, Unternehmungs-Formen und

-Verbindungen (1992).

2 See “Diskussionsentwurf eines Gesetzes zur Bereinigung des Umwand -

lungsrechts”, (Green Paper) ‘Bundesministerium der Justiz’, (BJM) III

A 1 — 3501/1, 1992 aiming at a new ‘Umwand lungs gesetz’ (Act Re-

gulating the Conversion of Compa nies). Compare also the proposed

Ninth Directive of the EC-Commission dealing with the structures of

groups of com panies, Lutter, “Der Vorschlag der EG-Kommission für

eine neunte Richtlinie zur Angleichung des Konzernrechts” (short in-

troduction and text of the Directive), ZGR 1985 (14), 444, 446 et seqq.

See also Verloop/Landes (ed.), Merger control in Europe (2003).

3 ‘Gesetz zur Bereinigung des Umwand lungs rechts’ (abbr. UmwG, Act

Regulating the Adjustment of the Conversion Law), BGBl. I 1994, 3210

et seqq. Coming into force on 1 January 1995. The previous law dated

back to 1969. Cf. Neye, “Der Re gierungs entwurf zum Umwandlungs-

recht”, 1994, ZIP 165 et seqq.; Lüttge, “Das neue Umwandlungs- und

Umwandlungs steuer recht”, 1995, NJW 417 et seqq. Through the Act

EU-Directives were also transferred into national law, cf. Lutter-Hom-

melhoff, GmbHG introduction, note 22 with further references. See

also Kiem, Unternehmensumwandlung (2000).