Legal division
Briefly, a legal division means that the company (the legal entity) is divided. The major advantage of a legal division is that you can divide your company with just one legal act. In this way you can transfer either part of or all of the assets.
In a legal division it is possible, either that the dividing company ceases to exist (the so-called split-up), or that the dividing company still exists (the split-off). In the following we shall explain the difference between both these forms of legal division.
The split-up
- After the split, the “original” company ceases to exist
- All the assets of the “original” company are transferred
- At least two companies are created
The split-off
- The “original” company still exists
- A certain part of the assets are transferred to the new company
- A least one new company is created (We refer to the “original” and the “new” company)
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