Commercial Code amendments entering into force on 1 January 2015 set out the possibility for a natural person who is the sole shareholder of a private or public liability company to merge with the company. As a result of the merger, the company will be dissolved, and the rights and obligations of the company will be transferred to the sole shareholder.
The purpose of the amendments is to provide a more convenient and expeditious way to end business activities on a voluntary basis compared to the liquidation procedure. In practice, a shareholder should be cautious when deciding whether to merge as a natural person will be fully and personally liable for the obligations of the company.
The new merger procedure is only recommended when the shareholder is convinced that the company has neither existing nor potential obligations which the sole shareholder is not ready to fulfil. A shareholder can only make a prudent decision to merge with the company when they have a complete overview of the business activities of the company, or if the company has been registered with the commercial register but has not actually started business activities.