In a previous article, we examined the decision of the General Meeting or the partners of each company participating in the merger. We also examined the merger agreement, which is drawn up by the representatives of the merging companies. Here, we focus on the publicity obligation applicable to these elements (Article 16 of Law 4601\/2019). We also examine the preventive legality review that precedes publicity (pursuant to Article 16 of Law 4601\/2019).<\/p>\n
The law requires the participating companies to submit the merger to the publicity formalities of the General Commercial Registry (G.E.MI.) (Article 16 \u00a73 of Law 4601\/2019). These formalities serve the transparency of the procedure. At the same time, they inform third parties of the change in the legal and financial position of the participating companies.<\/p>\n
More specifically, the publicity obligation covers, at a minimum, two basic elements. First, the decision of the meeting of the partners or shareholders approving the merger (Article 14 of Law 4601\/2019). Second, the merger agreement (Article 15 of Law 4601\/2019), which is drawn up by the competent corporate bodies. The obligation is imposed cumulatively on all participating companies. Compliance with the publicity formalities in respect of only one of them is therefore not sufficient.<\/p>\n
Furthermore, where a company participating in the merger falls within specific categories, additional publicity is required. This concerns, in particular, public-interest entities, companies for which specific legislative approval is required, or companies licensed by the Hellenic Capital Market Commission (Article 9 \u00a73 of Law 4548\/2018). In such cases, the approval decision of the competent body of the Ministry of Development is also published (Article 17 \u00a74 of Law 4601\/2019).<\/p>\n
The merger is completed upon registration of the merger agreement with the G.E.MI. in respect of the absorbing company (Article 18 of Law 4601\/2019).<\/p>\n
The legislation governing mergers (Article 16 of Law 4601\/2019) does not introduce specific requirements concerning the legal effects of publicity. It refers instead to the general framework governing publicity through the G.E.MI., as regulated by Law 4919\/2022.<\/p>\n
The legal effects of constitutive publicity arise upon registration and publication with the G.E.MI. (Article 18 of Law 4919\/2022). Publicity therefore has constitutive effect. The legal effects of the merger begin upon its completion.<\/p>\n
Failure to comply with the publicity formalities prescribed by law (Article 16 of Law 4601\/2019) entails, in principle, administrative penalties.<\/p>\n
These penalties concern infringements of publicity and registration obligations with the G.E.MI. (Article 50 of Law 4919\/2022).<\/p>\n
The case of registration of the merger agreement in respect of the absorbing company is different. This registration is connected with completion of the merger and does not constitute a mere publicity formality.<\/p>\n
Publicity of merger acts presupposes a prior legality review. The review covers all acts and formalities of the participating companies.<\/p>\n
The relevant law (Law 4601\/2019) does not fully specify the content of the legality review. For this reason, the provisions of the law governing the G.E.MI. apply supplementarily (Law 4919\/2022, in particular Article 3 point 17).<\/p>\n
Under those provisions, the review is substantive in nature. It is aimed at establishing whether the acts, information and declarations to be registered comply with the articles of association. It is also aimed at establishing their compliance with the mandatory provisions governing the relevant company type.<\/p>\n
The specific merger provision (Article 17 of Law 4601\/2019) broadens the scope of the review. It also includes compliance with the formalities prescribed by that Law and by the specific corporate legislation.<\/p>\n
Accordingly, the legality review is not exhausted by a simple formal examination or by verifying that the acts comply with the required form.<\/p>\n
It does not, however, constitute a full substantive legality review in the broadest sense. It does not include an overall assessment of the compliance of the acts with the entire legal order. Nor does it include a review of expediency.<\/p>\n
Issues of tax compliance and grounds relating to the validity of the merger agreement remain outside its scope.<\/p>\n
Furthermore, through the reference to Article 9 \u00a75 of Law 4548\/2018, review of the invalidity of resolutions of corporate bodies is also excluded.<\/p>\n
For initiation of the approval procedure, the rules governing registration and publication with the G.E.MI. apply. Accordingly, the procedure for registration and publication of acts requiring a legality review applies (Article 25 of Law 4919\/2022).<\/p>\n
The twenty (20)-day time limit provided for in paragraph 3 begins from the drawing up of the merger agreement. Failure to comply within that period activates the administrative penalties for infringements of publicity obligations before the G.E.MI. (Article 50 of Law 4919\/2022).<\/p>\n
Because of the preventive legality review, automated registration with the G.E.MI. is excluded in cases of corporate transformations (Article 26 \u00a72 of Law 4919\/2022).<\/p>\n
Any errors in the approval decision are corrected through the procedure for correcting registration errors with the G.E.MI. (Article 27 of Law 4919\/2022).<\/p>\n
In all cases, the competence of the G.E.MI. Service is bound by law. Where the statutory conditions are met, the competent authority is required to proceed with registration or issue the relevant approval decision.<\/p>\n
The preventive legality review and the subsequent publicity are carried out by the competent G.E.MI. Service.<\/p>\n
The competent service is that of the region in which the registered office of the absorbing company is located.<\/p>\n
Competence is concentrated in the same service, even though the formalities under Article 16 concern all participating companies. This approach avoids the parallel involvement of several authorities.<\/p>\n
Territorial competence is determined on the basis of the registered office or establishment of the obligated entity, in accordance with the rule governing the allocation of competence among G.E.MI. Services (Article 20 \u00a75 of Law 4919\/2022).<\/p>\n
Where a company falling within Article 9 \u00a73 of Law 4548\/2018 participates in the merger, either as absorbing or absorbed company, competence is transferred to the Ministry of Development.<\/p>\n
This concerns public-interest entities, companies requiring specific legislative approval and companies licensed by the Hellenic Capital Market Commission.<\/p>\n
In such cases, the approval decision is issued by the competent body of the Ministry.<\/p>\n
The provisions governing publicity and preventive review of a merger (Articles 16 and 17 of Law 4601\/2019) apply to all forms of merger.<\/p>\n
They cover mergers by absorption, namely those involving the transfer of assets and liabilities to an existing absorbing company (Article 6 of Law 4601\/2019), and mergers by formation of a new company, to which the assets of the merging companies are transferred (Article 22 of Law 4601\/2019).<\/p>\n
They also cover mergers involving a specific relationship of shareholding control by an S.A. (Article 36 of Law 4601\/2019).<\/p>\n
The same category includes acquisition transactions treated as equivalent to mergers by absorption (Article 37 of Law 4601\/2019).<\/p>\n
In addition, Article 16 applies to the corporate forms eligible to participate in a transformation (Article 2 \u00a71 of Law 4601\/2019).<\/p>\n
Its application also extends to dissolved companies, subject to the specific conditions governing their participation in a transformation or merger (Articles 3 and 24 of Law 4601\/2019).<\/p>\n
Publicity and preventive legality review operate as the final institutional safeguard before completion of the merger.<\/p>\n
For businesses, this is not merely a formal stage in the transaction file. It is the point at which corporate decisions, the merger agreement and the required approvals acquire external effect.<\/p>\n
For advisers and management executives, timely and proper preparation materially reduces the risk of delays. It is also a prerequisite for a secure transition to the next stage.<\/p>\n
In the next article, we will examine the effects of the merger. In other words, the legal consequences arising after completion of publicity and registration with the G.E.MI.<\/p>\n
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