Companies Act 19,550 · Article 82 — Merger: concept and effects

Corporate merger: concept and effects (LGS art. 82)

Article 82 of the General Companies Law defines a merger: a merger exists when two or more companies dissolve without liquidation to form a new company (consolidation), or when an existing company absorbs one or more companies that dissolve without liquidation (merger by absorption). The new or absorbing company acquires all rights and obligations, with the entire estates transferred upon registration of the definitive merger agreement.

Source: Act 19,550

What article 82

Article 82 defines the two forms of merger and their effect: universal succession to the estates of the dissolved companies.

Official text · Act 19,550, art. 82

A merger occurs when two or more companies dissolve without liquidation in order to form a new company, or when an existing company absorbs one or more companies that are dissolved without liquidation.

Effects. The new company or the absorbing company acquires title to the rights and obligations of the dissolved companies, and their respective estates are transferred in their entirety upon registration with the Public Registry of Commerce of the definitive merger agreement and the instrument or bylaws of the new company, or of the capital increase that the absorbing company was required to make.

Source: Law 19,550, art. 82 — InfoLEG (updated official text)

Commentary

There are two forms: consolidation (two or more companies dissolve and a new one is created) and merger by absorption (one company absorbs another, which dissolves). In both cases the dissolved companies are not liquidated: their estates pass as a whole.

The effect is universal succession: the new or absorbing company takes all rights and obligations. That effect arises upon registration of the definitive agreement. The process (arts. 83 et seq.) requires a preliminary merger agreement, financial statements, publication, creditors’ right to object and a definitive agreement.

Distinctions often confused

Consolidation is not the same as Merger by absorption. In the former, a new company is formed and all prior companies dissolve; in the latter, one company survives (the absorbing company) and absorbs the others.

Merger is not the same as Spin-off. A merger concentrates estates in one company; a spin-off (art. 88) separates part of an estate into one or more other companies.

Practical impact

A merger permits companies to be integrated without liquidation: it transfers the whole estate as a block. It requires planning of financial statements, publication and creditors’ objection rights; full effectiveness arises upon registration.

Frequently asked questions

What is a merger by absorption?

It is where an existing company absorbs one or more companies, which dissolve without liquidation and transfer their entire estates to it.

When does the transfer of the estates occur?

Upon registration with the Public Registry of the definitive merger agreement and the bylaws of the new company or the absorbing company’s capital increase.

This page is informational and does not constitute legal advice nor replace professional consultation. It quotes the official text of the rule; for its application to a specific case, consult a licensed professional.

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