Mergers and Acquisitions

Corporate mergers and spin-offs

You need to combine two or more companies into one, or split a company's assets among several, and want to follow the legal procedure so that the reorganization is valid and enforceable.

In one line

Mergers and spin-offs are corporate reorganizations governed by the General Companies Law, involving universal succession of assets. This should not be confused with a share purchase, where only ownership of the capital changes and the company itself remains unchanged.

First steps

Choose the type: merger proper, merger by absorption, or spin-off
Prepare the preliminary agreement and the special merger or spin-off financial statements
Obtain the approving corporate resolutions with the required statutory majorities
Publish notices and address creditors' right to object
Register the definitive agreement with the Public Registry
Confirm qualification as a tax-free reorganization (article 80, Income Tax Law)

Mergers: types and effects

A merger occurs when two or more companies dissolve without liquidation to form a new one (merger proper), or when one company absorbs one or more others that dissolve (merger by absorption), under article 82 of Law 19,550. The resulting or absorbing company receives the assets by universal succession and steps into the rights and obligations of the previous companies.

The procedure requires a preliminary merger agreement, special financial statements, approving corporate resolutions, publication of notices and the possibility for creditors to object (articles 83 and 84, LGS). The merger is only completed once the definitive agreement is signed and registered with the Public Registry.

Spin-offs: splitting the assets

A spin-off (article 88, LGS) allows a company to allocate part of its assets to another existing or newly created company, or to split into several companies. It is useful for separating business units, organizing family groups, or preparing for a future partial sale.

The procedure follows guidelines similar to a merger regarding financial statements, resolutions, publication, creditors' right to object and registration. Planning the allocation of assets and the equity interests received by shareholders is the most delicate part.

Tax treatment of the reorganization

When the transaction qualifies as a tax-free reorganization under article 80 of the Income Tax Law (and its regulations), the transfer of assets does not generate taxable results and tax attributes carry over, provided the requirements of the law are met, including maintaining the ownership interest and the activity.

Verifying the tax treatment before implementing the reorganization is essential: a structure that does not meet the requirements can lose the benefits and generate unexpected tax liability. Corporate and tax analysis must go hand in hand.

Common mistakes

Omitting publication and the creditors' objection period
Approving the reorganization without reliable special financial statements
Failing to verify the tax treatment and losing tax-free status
Neglecting the allocation of interests to shareholders in a spin-off
Considering the transaction complete before registration

Frequently asked questions

What is the difference between a merger by absorption and a merger proper?

In a merger proper, two or more companies dissolve to create a new company. In a merger by absorption, one company survives and absorbs the assets of the companies that dissolve. Both involve universal succession (article 82, LGS).

Can creditors object to a merger or spin-off?

Yes. The law provides for publication of notices and a period during which creditors may object (article 83, LGS). The transaction may proceed after addressing objections through payment, security, or the applicable legal mechanism.

Is the reorganization subject to tax?

If it qualifies under article 80 of the Income Tax Law and meets its requirements, the transfer of assets does not generate taxable results and tax attributes carry over. The tax treatment must be analyzed before implementing the transaction.

When is the merger considered complete?

Upon signing the definitive merger agreement and registering it with the Public Registry. Until then, the transaction does not have full effect against third parties, even if the companies have already approved the preliminary agreement.

This page is informational and does not replace professional advice on your specific case. It does not imply any promise of results.

Are you planning a merger or spin-off?

We design the reorganization, coordinate financial statements, publication and registration, and review its tax treatment. Tell us what you are looking to achieve.

Ask via WhatsApp