Electronic signature for merging LLC companies – Step by step

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Merging limited liability companies (LLC) is a rather complex legal process. Thanks to modern technologies, however, it can now be handled more conveniently – electronically, from the office, or even from home. One of the key tools that makes this possible is the electronic signature and timestamp.

In today’s article, we will look at how the electronic signature and timestamp work during the merger of LLC companies, what documents you can sign with them, and what to watch out for to complete the process quickly, safely, and in compliance with the law. If you are considering a company merger, this overview will give you a clear idea of what to expect.

Merger of LLC companies – Legal framework

The main goal of any business is its prosperity, growth, and expansion. Business is a dynamic process where entrepreneurs must adapt to a rapidly changing environment and market demands. They need to find solutions to maintain or expand their operations. For these purposes, many entrepreneurs sometimes decide to merge.

One practical reason why many entrepreneurs currently consider merging their multiple LLC companies is to legally reduce tax burden. This method of optimization is common practice and fully compliant with the law.

A merger of an LLC company with another LLC. company is a process in which one or more LLC companies cease to exist (without liquidation) and their assets are transferred to a new or existing LLC company. The new or existing company becomes their legal successor. A merger is a voluntary legal way of dissolving a limited liability company.

As of March 1, 2024, the area of LLC company mergers underwent a significant amendment, now governed by Act No. 309/2023 Coll. on Transformations of Commercial Companies and Cooperatives and on the Amendment of Certain Laws (hereinafter the “Act”). According to §2 of this Act, a transformation is defined as a company merger, and a merger is defined as the consolidation of a company.

According to the law, only two LLC companies can merge. The exception is the possibility of merging an LLC company and transforming it into a joint-stock company, a simple joint-stock company, or a cooperative.

Transformation project and submission to the Slovak Commercial Register

Among the significant legislative changes effective from March 1, 2024, is the replacement of the merger agreement with a so-called transformation project. Section 7 of the Act requires entrepreneurs to prepare a draft of the transformation project. In the case of a merger, the project must be prepared jointly by the statutory representatives of the participating companies.

The law also requires that the draft of the transformation project meet the general requirements listed in §8 of the Act, as well as special requirements applicable to an LLC, or another form of company involved in the merger.

A properly prepared transformation project must then be published in the Collection of Deeds or the Commercial Bulletin, together with a notice of the filing of the project in the Collection of Deeds or Commercial Bulletin for at least one month before the general meeting where the project approval will be decided.

TIP:

A new option for entrepreneurs is the possibility to cancel an already approved transformation project if they, for any reason, change their mind and find a more suitable solution. However, the cancellation can only be executed until the proposal for registration of the company transformation is submitted to the Commercial Register.

Standard attachments to the transformation project include the draft of the new company agreement and the statutes of the new company being formed. All these documents and necessary attachments can be signed with a qualified electronic signature. By adding a timestamp, entrepreneurs save not only the costs of official notarization but also the complete visit to the registry or notary.

Summary:
Signing any documents and attachments required by law for a LLC company merger and submitting them to the Commercial Register can be conveniently done from home or work if you own a qualified electronic signature and a timestamp. In this case, you no longer need to notarize your signature or the document date. These attributes are fully replaced by the qualified electronic signature and timestamp.

How, where, quickly, and easily to obtain a qualified electronic signature (QES) and timestamp?

A qualified electronic signature (QES) is information logically linked to an electronic document. If it meets the requirements of Act No. 272/2016 Coll. on Trust Services and Regulation (EU) No. 910/2014 (eIDAS), it allows the reliable and unambiguous identification of the physical person who created the electronic signature. In practice, a QES fully replaces the handwritten signature of the person.

Instructions for obtaining a qualified electronic signature are available here.

A qualified timestamp is intended for the qualified time verification of a document. By adding a qualified timestamp, you ensure the precise time when the timestamp was applied. Any document with a qualified timestamp thus provides legally relevant (verified) data that is indisputable, as the time source comes from the certification authority’s server, operated by BRAIN:IT via the platform www.nfqes.com.

Instructions for obtaining a qualified timestamp are available here.