Business restructuring and M&A in Tajikistan

1) In what forms can the reorganization of a legal entity be carried out?

The reorganization of a legal entity can be carried out in the following forms: 

• merger;
• accession;
• division;
• separation;
• transformation. 

This process may be initiated by the decision of its founders (participants).

2) What are the procedures for the division or merger of a company?

Procedures for the division or merger of a company:

1. Adoption of a resolution at a general meeting of shareholders or members to reorganise the company.

2. Notification, within ten working days, to the registering authority of legal entities (Unified State Register of Legal Entities - USRLE) of the decision to reorganise.

3. Obtaining the prior consent/conclusion of the Antimonopoly Service for the reorganisation of the company.

4. Preparation and submission of all necessary documents to the USRLE and obtaining updated/new extracts from the register for the reorganised companies.

5. Production of seals and opening of new accounts for the established companies. 

3) How to separate a specific type of activity into an independent company?

To separate a specific type of activity into a new company, the reorganization of the legal entity can be carried out through the form of separation. In this process, a new legal entity is created, and the rights and obligations of the original entity related to that activity are transferred to the new entity according to a division balance sheet.

4) Is it possible to reorganize a company in case of bankruptcy?

Reorganization of a company is possible before formal bankruptcy proceedings begin or in the early stages, such as during financial recovery efforts or external management. The law does not explicitly provide for reorganization once the company has entered formal bankruptcy proceedings.

5) Which government agencies' approvals should be obtained for mergers and acquisitions?

The following actions shall be carried out with the prior consent of the state antimonopoly authority:

• creation and reorganization of associations of companies;
• creation and reorganization of companies if the amount of their authorised capital exceeds fifty thousand calculation indicators;
• merger of companies or joining of company to another legal entity, if the total book value of their assets (assets of their groups of entities) according to the latest balance sheets exceeds one hundred thousand calculation indicators;
• acquisition of shares and shares with voting rights in the authorised (share) capital of companies;
• liquidation and division (spin-off) of company whose assets exceed twenty-five thousand calculation indicators, if this will lead to the creation of  company with a dominant position in the commodity market.

Authors: Bahodur Nurov, Kamoliddin Mukhamedov