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Merger Of Companies

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Merger Of Companies

Article 272
(Concept and types)
1. Two or more companies, even if they are of different types, can merge into a single one.
2. The merger can be done:
a) by the global transfer of the patrimony of one or more companies to another one, and the attribution to the shareholders of the former of parts or shares in the latter;
b) by the creation of a new company, to which the patrimonies of the merged companies are globally transferred, the shareholders of the latter being given parts or shares in the new company.

Article 273
(Merger project)

1. The administrations of companies wanting to merge shall prepare together a merger project which, besides other elements necessary or convenient for the perfect knowledge of the operation aimed at, shall mention:
a) the type, motivation, conditions and objectives of the merger, in relation to all participating companies;
b) the firm, registered office, amount of capital and registration number of each of the companies;
c) the participation that any of the companies may have in the capital of the other;
d) especially prepared balance sheets of the intervening companies, mentioning the value of the elements of the assets and liabilities to be transferred to the absorbing company or to the new company;
e) the parts or shares to be allocated to shareholders of the company being absorbed in accordance with subparagraph a) of paragraph 2 of the previous article, or of the companies being merged in accordance with subparagraph b) of that paragraph and, if any, the amount in money to be paid to the same shareholders, specifying the ratio of exchange of the company participations;
f) the draft amendment to be introduced in the articles of association of the absorbing company, or the draft articles of association of the new company;
g) the measures to protect the rights of creditors;
h) the rights ensured by the absorbing company or by the new company to shareholders holding special rights;
i) in mergers in which the absorbing company or the new company is a public company, the types of shares of such companies and the date from which the shares will be handed over and will provide a right to profits, as well as the modalities of this right.

2. The project, or an attachment to it, shall indicate the appraisal criteria adopted, as well as the bases of the exchange ratio mentioned in subparagraph e) of the previous paragraph.

Article 274
(Supervision of project)

1. The administration of each of the participating companies shall communicate the merger project and its attachments to the respective supervisory board or single supervisor, to have their opinion or, in their absence, to an accounting auditor or firm of auditors.

2. The supervisory board or the single supervisor, the accounting auditor or firm of accounting auditors can request from all participating companies any information and documents needed, and can undertake necessary verifications.

Article 275
(Registration of project and call of general meeting)

1. A merger project shall be submitted for resolution to the shareholders of each of the participating companies, in a general meeting, irrespective of the type of company; the general meetings shall be called after the registration of the merger project and shall meet no earlier than 30 days from the date of sending or publication of the call, in accordance with paragraph 2, depending upon which takes place later.

2. A public notice of the registration of the merger project shall be made according to the form provided for in article 326, stating that the project and the attached documentation can be consulted by the respective shareholders and creditors at the registered office of each company and stating the dates for the general meetings.

Article 276
(Consultation of documents)

1. From the publication of the notice required by the previous article, the shareholders and creditors of any of the companies participating in the merger have the right to consult the following documents in the registered office of each company, and to obtain, free of charge, a full copy of:
a) the merger project;
b) reports and opinions prepared by the supervisory organs or by accounting auditors.

2. They can also consult the accounts, reports of the organs of administration, reports and opinions of the organs of supervision and resolutions of the general meetings on those accounts, covering the last three accounting periods.

Article 277
(General meeting)

1. In the meeting, the administration shall start by expressly declaring if, since the elaboration of the merger project, there has been any relevant change to the factual elements on which it is based and, in the affirmative case, what are the modifications of the project that are necessary.

2. If there has been a relevant change in accordance with the previous paragraph, the general meeting shall decide if the merger process must be restarted, or if it will continue with the consideration of the proposal.

3. The proposals presented to the various general meetings must be strictly identical; any modification introduced by a general meeting is considered as a rejection of the proposal, without prejudice to its renewal.

4. Any shareholder can demand, in the general meeting, any information about the participating companies that may be indispensable for him to understand the merger project.

Article 278
(Resolution)

1. In the case of lack of special provision, the resolution shall be taken in accordance with the terms prescribed for the amendment of the articles of association.

2. The resolution can only be executed after the assent of the prejudiced shareholders is obtained, if it:
a) increases the obligations of all or some shareholders;
b) affects special rights that some shareholders hold;
c) modifies the proportion of their company participations in relation to the other shareholders of the same company, except to the extent to which such modification arises from payments demanded in order to comply with legal provisions imposing a determined or minimum value for each unit of participation.

3. If any of the participating companies has various categories of shares, the merger resolution of the respective general meeting is only effective after its approval by a special meeting of each category.

Article 279
(Participation of a company in the capital of another)

1. If any of the companies holds a participation in the capital of another, it cannot make use of a number of votes higher than the sum of those of all the other shareholders.

2. For the purpose of the previous paragraph, to the votes of the company shall be added the votes of other companies controlled by the former in accordance with article 212, as well as the votes of persons acting in their own name but for the account of some of these companies.

3. As an effect of a merger by absorption, the absorbing company shall not receive parts or shares of itself in exchange for parts or shares in the absorbed company which are held either by the former or by the latter or by persons acting in their own name but for the account of any of these companies.

Article 280
(Right to voluntary exoneration from a company)

1. If the law or the articles of association grant to a shareholder who has voted against a merger project the right to exonerate himself from the company, the shareholder can demand, within the 30 days following the date of the publication required by paragraph 1 of article 282, that the company acquires, or have a third party acquire, his company participation.

2. Except if otherwise stipulated in the articles of association, or if there is an agreement of the parties, an accounting auditor without connection with the merging companies shall determine the value of the participation.

3. The company must pay the value set within 90 days; if not, the shareholder can request its dissolution.

4. The right of the shareholder to transfer his participation by other means is not affected by the provisions of the previous paragraphs; the limitations prescribed by the articles of association of the company do not apply to such transfer, if effected within the time limit there mentioned.

Article 281
(Merger document)

1. Once the merger has been approved by resolution of the general meeting of each of the participating companies, the respective administrations shall sign the respective merger document.

2. If the merger takes place through the creation of a new company, the provisions that apply to such creation shall be complied with, except if otherwise arises from their justification.

Article 282
(Publicity of merger and opposition of creditors)

1. The administration of each of the participating companies shall promote the registration and publication of the resolution that approves the merger project.

2. Creditors of the participating companies can judicially oppose the merger within 30 days from the last publication done in accordance with the previous paragraph, based on the damage arising from it to the payment of their credits, if the latter are prior to such publication.

3. The creditors mentioned in the previous paragraph shall be given notice of their right of opposition in the publication mentioned in paragraph 1 and, if their credits are mentioned in books or documents of the company or are by any other means known to it, by registered mail.

Article 283
(Effects of opposition)

1. Judicial opposition by any creditor prevents the registration of the merger until any of the following facts have taken place:
a) it is judged without merit, by a decision that can no longer be appealed, or, if the case was dismissed for procedural reasons [absolvição da instância], if the opposing creditor does not initiate new proceedings within 30 days;
b) the opposing creditor withdraws the proceedings;
c) the company has paid the opposing creditor or posted bail of an amount set by agreement or by judicial decision;
d) the opposing parties agree to the registration;
e) the amounts due to the opposing parties are judicially deposited [consignação em depósito].

2. If the court allows the opposition, the court shall order the reimbursement of the credit of the opposing party or, if it cannot yet be demanded, the posting of a bail.

3. The provisions of the previous article and of paragraphs 1 and 2 do not obstruct the application of contractual clauses that give the creditor the right to the immediate payment of his credit if the debtor company merges with another company.

Article 284
(Bondholder creditors)

1. The provisions of articles 282 and 283 apply to bondholder creditors, with the modifications mentioned in the following paragraphs.

2. Meetings of the bondholders of each company shall take place; they shall be called by the common representative for each issue, in order to assess the merger in relation to possible damage to these creditors; resolutions shall be adopted by absolute majority of the bondholders present or represented.

3. If the meeting does not approve the merger, the right of opposition shall be collectively exercised through the common representative.

4. The holders of obligations, convertible or not into shares, enjoy, in relation to the merger, the rights that have been attributed to them for such case; if no specific rights were attributed to them, they enjoy the right of opposition, in accordance with this article.

Article 285
(Holders of other instruments)

The holders of instruments other than shares, to which special rights are inherent, shall continue to enjoy at least equivalent rights in the absorbing company or in the new company, except if:
a) it is decided, in an extraordinary meeting of the instrument holders and by absolute majority of the number of each type of instrument, that the said rights can be modified;
b) if the special extraordinary meeting is not foreseen in the law or in the articles of association, all bearers of each kind of instrument individually assent to the modification of their rights;
c) the merger project foresees the acquisition of such instruments by the absorbing company or by the new company, and the conditions for such acquisition are approved, in an extraordinary meeting, by the majority of the bearers present or represented.

Article 286
(Registration of merger)

After the period mentioned in paragraph 2 of article 282 has elapsed without any opposition or any of the facts mentioned in paragraph 1 of article 283 having taken place, the administration of any of the companies participating in the merger, or the new company, shall proceed with the commercial registration of the merger.

Article 287
(Effect of registration)

With the registration of a merger:
a) the absorbed companies or, in the case of creation of a new company, all merged companies, are extinguished; their rights and obligations are transferred to the absorbing company or to the new company;
b) the shareholders of the extinguished companies become shareholders of the absorbing company or of the new company.

Article 288
(Condition or term)

If the effects of a merger are dependent upon a suspensive condition or a suspensive term and, before the occurrence of such, relevant modifications take place in the factual elements on which the resolutions were based, the general meeting of any of the companies can decide to petition the court for the rescission or modification of the merger, its effect being delayed until the moment when the decision pronounced in the proceedings can no longer be appealed.

Article 289
(Liability arising from merger)

1. The administrators, the members of the supervisory board or single supervisor and the secretary of each of the participating companies are jointly and severally liable for damage caused by the merger to the company and to its shareholders and creditors, if they have not observed the diligence of a systematic and ordered manager in verifying the patrimonial situation of the companies and in concluding the merger.

2. In relations among themselves, the co-obliged parties are liable in accordance with paragraph 2 of article 192.

3. The extinction of companies caused by a merger does not hinder the exercise of the right to compensation mentioned in paragraph 1, nor of their rights and obligations arising from the merger; such companies are considered to be in existence for this purpose.

Article 290
(Enforcement of liability in case of extinction of company)

1. The rights mentioned in the previous article, if relating to companies mentioned in its paragraph 3, are exercised by a special representative, whose appointment can be requested from the court by any shareholder or creditor of the company.

2. Such special representative shall invite the shareholders and creditors of the company, by means of a notice published according to the form prescribed for company notices, to claim their rights of compensation, within a time limit stated by him, of no less than 30 days.

3. Compensation granted to the company shall be used in the payment of the respective creditors, to the extent that they have not been paid or guaranteed by the absorbing company or by the new company; any excess shall be distributed by the shareholders, in accordance with the rules applicable to the distribution of the balance of a liquidation.

4. Those shareholders and creditors who have not timely claimed their rights are not included in the sharing mentioned in the previous paragraph.

5. The special representative has a right to reimbursement for expenses that he has justifiably made and to remuneration for his activity; the court, using prudent discretion, shall determine the amount of the expenses and the remuneration, as well as the extent to which they shall be paid by the shareholders and interested creditors.

Article 291
(Absorption of a company totally controlled by another)

1. The previous articles shall apply, with the exceptions mentioned in the following paragraphs, to the absorption by a company of another of whose parts or shares the former is the only holder, directly or for its account but under a separate name.

2. In this case the provisions on the exchange of company participations, on the reports of company organs of the absorbed company, and on the liability of those organs shall not apply.

3. The merger document can be prepared without previous resolution by the general meetings, provided that the following cumulative requirements are met:
a) the merger project indicates that if the respective call is not requested in accordance with subparagraph d) the document shall be signed without previous resolution by the general meetings;
b) the publicity required by article 275 has been made at least two months in advance in relation to the date of the document;
c) the shareholders were able to gain knowledge, at the registered office, of the documentation mentioned in article 276, at least from the eighth day following the publication of the merger project, and they have been informed of this in the same project or simultaneously with its communication;
d) up to 15 days before the date set for the preparation of the document, no general meeting to decide upon the merger has been requested by shareholders holding 5% of the company capital.

Article 292
(Nullity of merger)

1. The nullity of a merger can only be declared on the basis of lack of a document or of a previous declaration of nullity or annulment of any of the resolutions of the general meetings of the participating companies.

2. Proceedings to declare the nullity of a merger can only be initiated while the existing defects have not been corrected, but not after six months from the publication of the registered merger, or from the publication of a judicial decision that can no longer be appealed declaring void or voiding any of the resolutions of the said general meetings.

3. The court shall not declare the nullity of a merger if the defect producing it is corrected within a time limit that it shall state.

4. A judicial declaration of nullity is subject to the same publicity required for a merger.

5. The effects of the acts practiced by the absorbing company, after the entering of a merger in the register and before the decision declaring nullity, are not affected by this declaration, but the absorbed company is jointly and severally liable for the obligations contracted by the absorbing company during that period; the merged companies are liable in the same manner for the obligations contracted by the new company, if the merger is declared void.

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