Merger of Companies in Kuwait
A merger of companies in Kuwait requires an experienced corporate lawyer. Contact the Abdulaziz Al-Subaie Law Firm & Legal Consultancy Group at 50766923 for swift assistance. We handle every step to ensure your merger complies with the Kuwaiti Companies Law.
Definition of Merger of Companies in Kuwait
A merger of companies in Kuwait is the legal process by which two or more entities unite to form a single new company retaining the same corporate structure.
The merging companies must agree to:
- Transfer assets and liabilities from the transferor company to the new entity.
- Dissolve the original companies once the new company is formed.
- Allocate shares in the merged company to each partner based on their prior capital contributions.
Procedures for Merger of Companies in Kuwait
Merger by Absorption
- The absorbing company’s board passes a resolution to approve the merger.
- A certified auditor evaluates the net assets of the transferor company.
- The absorbing company resolves to increase its share capital according to that valuation.
- Surplus capital is distributed to the transferor company’s partners in proportion to their stakes.
Merger by Amalgamation
- Each company passes a resolution approving its own dissolution.
- A new company is established under the Kuwaiti Companies Law.
- Shares in the merged company are allotted based on each dissolved company’s contribution.
- Partners receive shares according to their previous ownership percentages.
Steps to Execute a Merger of Companies in Kuwait
- Prepare merger documentation using the Ministry of Commerce and Industry’s prescribed form (Article 1, Law No. 1/2016).
- Detail the objectives and justifications for the merger.
- Agree on all merger conditions among the merging companies.
- Conduct a fair valuation of each company’s assets and liabilities, specifying the valuation date and consideration for each partner.
- File the merger agreement and valuation report with the Ministry.
- Submit the auditor’s report for the merged company.
- Provide all additional required documents for review.
- Await the Ministry’s decision to approve or reject the merger.
- If approved, convene a general assembly to finalize the merger.
- If rejected, receive written reasons and amend the proposal.
- Publish the approved merger and record it in the commercial register.
Documents Required for Merger of Companies in Kuwait
- Draft merger agreement.
- Preliminary valuation reports of assets and liabilities.
- Corporate charter and all amendments to date.
- Auditor’s report detailing partner share allocations.
- Current company license.
- Undertaking by the absorbing or amalgamating company to assume obligations.
- Approval from the Central Bank of Kuwait or Capital Markets Authority.
Conditions for Merger of Companies in Kuwait
- Bondholder approval for companies with outstanding bonds.
- Consent of all partners, with the right for dissenters to withdraw.
- Extraordinary general assembly resolution by majority vote.
- Amendment of the merger agreement within 30 days of approval.
- Thirty-day waiting period after publication in the official gazette before effectiveness.
- Formal objection period via written notice.
Merger of Companies by Absorption in Kuwait
- Joint and several liability for transferor company obligations.
- Completion of legal steps to establish the new entity’s form.
- No obligation to retain the prior corporate form.
- Merger agreement prepared per ministry template.
- Regulatory approval of the draft merger agreement.
- Submission of auditor’s report at least 10 days before the general assembly.
Frequently Asked Questions about Merger of Companies in Kuwait
What is a merger of companies in Kuwait? It is the union of two or more companies into a new single entity that assumes all rights and obligations of the original companies.
How do I contact a corporate lawyer for a merger? Call Abdulaziz Al-Subaie Law Firm & Legal Consultancy Group at 50766923 for expert guidance throughout the merger process.
What is the difference between a merger and an acquisition?
| Aspect | Merger | Acquisition |
|---|---|---|
| Entity Formation | Creates a new legal entity | No new entity; acquiring company assumes control |
| Ownership | Partners unite and share ownership equally | Acquirer gains full control |
| Liability Transfer | New company assumes combined liabilities | Acquirer assumes liabilities of target |
Contact the Abdulaziz Al-Subaie Law Firm & Legal Consultancy Group at 50766923 now to finalize your merger of companies in Kuwait quickly and professionally.