Dividing a company requires a clear definition of the companies involved and the business areas to be transferred to each of them. The division plan should allocate each asset, liability, contract and other legal position in a traceable way. It must also specify how shares in the acquiring or newly formed companies will be allocated. The corporate resolutions required by law and the constitutional documents must be obtained for the reorganisation. Employment relationships, ongoing proceedings, security interests and internal financing must be included in the allocation of assets. Unclear allocations can lead to disputes over responsibilities and liability after the division takes effect. The rights of shareholders and creditors must be taken into account in accordance with the protective rules applicable to the division. The reorganisation takes effect upon the required entry in the Business Registry. Each licence, permit and contract must be reviewed individually to determine whether it follows the proposed allocation or requires additional notices or consents. Accounting records, tax data, personnel files and operational systems must be aligned with the new company structure as of the effective date.
Division of a Company as a Reorganisation in Georgia
In a company division in Georgia, assets, liabilities and business activities are allocated among several existing or newly formed companies according to a specified plan. Depending on how it is structured, the original company either continues to exist with part of its assets or ceases to exist when the reorganisation takes effect.
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