Company Transformation

Change of legal form (LLC to JSC)

Transformation from LLC to JSC is the most common type of transformation in practice. The main motives include:

• Enhanced prestige and creditworthiness before partners and banks
• Shareholder anonymity (with bearer shares)
• Ability to issue bonds
• Access to the stock exchange and attracting investments

Procedural steps

The process involves preparing a transformation plan (notarised), which is filed with the Commercial Register at least 30 days before the scheduled General Meeting. This is followed by notification to the NRA, preparation of an auditor's report, and holding a General Meeting where the resolution is adopted by a 3/4 majority of the capital.

Merger and division

In a merger, two or more companies combine their operations into one new or existing company. In a division, one company is split into two or more new companies.

In both cases, a transformation agreement (notarised) is required, which is published in the Commercial Register with a 30-day period for creditors. An auditor verifies the exchange ratio for shares/stocks. A 6-month separate accounting requirement is provided for creditor protection.

Timeline

Transformation is one of the longest corporate procedures. The total timeframe is 2–4 months, including: plan preparation (1–2 weeks), 30-day publication period, auditor's review (1–2 weeks), General Meeting, and Commercial Register filing.

Required documents

• Transformation plan (notarised)
• Management body report
• Independent auditor's report
• Annual financial statements for the last 3 years
• Interim balance sheet
• Draft new articles of incorporation (for JSC)
• General Meeting resolution (3/4 majority)

Frequently asked questions