1.0 Definition, Legal nature, types and the Effects of Mergers
1.1 Definition
Merger is a combination of two existing companies to form one company. That is, it is the transfer of undertaking and liabilities from one company to another company. According to Marof , Chiplin and Wright , they have all defined merger as a combination of the assets and liabilities of two firms to form a single business entity. Under the Kenyan companies Act, mergers has been defined as either a transfer of undertaking, property and liabilities of one or more public companies (including the company in respect of which the compromise or arrangement is proposed) to another existing public company; or the transfer of undertaking, property and liabilities of …show more content…
Yvonne Cheminade goes ahead to support this argument by stating that there is no dissolution of company that has taken place since there was no liquidation in the first place. That is, there was no collection at all of the debts owed to the company from the debtors. In addition to that, there was no payment to the creditors that took place and finally there was division of whatever remained to the shareholders. It is based on this argument that the supports of this non expiry of legal personality argues that mergers lead to transfer of undertaking and liabilities from Transferor Company to Transferee Company without the expiry of the legal personality of the transferor …show more content…
This is because there is no division of that company’s assets taking place since such assets are transferred in form of economic venture (is an entity of production that contains both the physical elements (such as funds and tools) and the human elements (such as the minds that create and administer the venture and the labour running it) put together to ensure that company achieves its objectives) during the mergers. The same argument has been supported by legal scholar from USA such as Williams A. Klein, J Mark Ramseyer and Stephen M. Bainbridge in their chapter seven on mergers, Acquisition and takeover Mohsin Shafiq from Egypt and Jacob Sarkhou from Kuwait . In addition to this, there are some judicial authority in support of this argument as was established in an American case of Farris vs Glen Alden corporation where it was stated that, “upon the filing of the merger agreement with the appropriate state official, Glen Alden would disappeared and all the property, interest, rights and obligations of Glen Alden would pass by law to list”. Another case that supported this argument is from the state of Missouri in the case of Dodier Realty & Inv. Co. v. St. Louis Nat. Baseball Club,Inc from Supreme Court of Missouri where it was held that
1.1 Definition
Merger is a combination of two existing companies to form one company. That is, it is the transfer of undertaking and liabilities from one company to another company. According to Marof , Chiplin and Wright , they have all defined merger as a combination of the assets and liabilities of two firms to form a single business entity. Under the Kenyan companies Act, mergers has been defined as either a transfer of undertaking, property and liabilities of one or more public companies (including the company in respect of which the compromise or arrangement is proposed) to another existing public company; or the transfer of undertaking, property and liabilities of …show more content…
Yvonne Cheminade goes ahead to support this argument by stating that there is no dissolution of company that has taken place since there was no liquidation in the first place. That is, there was no collection at all of the debts owed to the company from the debtors. In addition to that, there was no payment to the creditors that took place and finally there was division of whatever remained to the shareholders. It is based on this argument that the supports of this non expiry of legal personality argues that mergers lead to transfer of undertaking and liabilities from Transferor Company to Transferee Company without the expiry of the legal personality of the transferor …show more content…
This is because there is no division of that company’s assets taking place since such assets are transferred in form of economic venture (is an entity of production that contains both the physical elements (such as funds and tools) and the human elements (such as the minds that create and administer the venture and the labour running it) put together to ensure that company achieves its objectives) during the mergers. The same argument has been supported by legal scholar from USA such as Williams A. Klein, J Mark Ramseyer and Stephen M. Bainbridge in their chapter seven on mergers, Acquisition and takeover Mohsin Shafiq from Egypt and Jacob Sarkhou from Kuwait . In addition to this, there are some judicial authority in support of this argument as was established in an American case of Farris vs Glen Alden corporation where it was stated that, “upon the filing of the merger agreement with the appropriate state official, Glen Alden would disappeared and all the property, interest, rights and obligations of Glen Alden would pass by law to list”. Another case that supported this argument is from the state of Missouri in the case of Dodier Realty & Inv. Co. v. St. Louis Nat. Baseball Club,Inc from Supreme Court of Missouri where it was held that