Mergers and Acquisitions of LLC

Publication date: 15.06.2026

In the context of the development of a market economy, the reorganization of legal entities is one of the most demanded mechanisms of corporate restructuring. For limited liability companies, reorganization makes it possible to solve a wide range of tasks: business consolidation, improvement of management efficiency, separation of individual areas of activity, preparation for investment transactions, as well as change of the organizational and legal form of an enterprise.

According to Article 1 of the new Law of the Republic of Uzbekistan “On Limited Liability Companies” dated April 21, 2026, this Law regulates matters related to the establishment, activities, reorganization, and liquidation of companies.

Reorganization is a procedure provided for by legislation involving the termination or change of the legal status of a legal entity with the transfer of its rights and obligations to other legal entities by way of universal succession.

According to Article 60 of the Law, a company may be reorganized by decision of the general meeting of participants in the manner prescribed by legislation. Reorganization is permitted in the following forms:

Merger;
Accession;
Division;
Spin-off;
Transformation.

A common feature of all forms of reorganization is the transfer of the rights and obligations of the reorganized company to its legal successors without the need to re-register each individual obligation.

Decision on Reorganization

Adoption of a decision on reorganization falls within the exclusive competence of the general meeting of participants of the company. This authority may not be transferred to the executive body or to the supervisory board.

A decision on reorganization must contain:

the form of reorganization;
the terms and conditions for carrying it out;
the procedure for transferring property;
the procedure for the transfer of rights and obligations;
approval of the transfer act or separation balance sheet;
matters concerning the establishment of new companies or amendments to existing companies.

Protection of Creditors’ Rights During Reorganization

One of the key principles of reorganization is the protection of creditors’ interests.

The Law establishes the company’s obligation to:

notify all known creditors in writing no later than 30 days from the date of adoption of the decision on reorganization;
publish a notice of reorganization in the mass media.

Creditors have the right, within 30 days, to demand:

early performance of obligations;
termination of obligations;
compensation for losses incurred.

This guarantee is aimed at preventing the deterioration of creditors’ position as a result of corporate restructuring.

MERGER OF A COMPANY

A merger means the consolidation of two or more companies with the creation of a new legal entity and termination of the activities of all participating companies.

Features of a merger:

each company adopts a decision on reorganization;
a merger agreement is approved;
the charter of the new company is approved;
the transfer act is approved;
a joint meeting of participants of the companies is held.

In a merger, all rights and obligations of the reorganized companies pass to the newly created company, regardless of whether they are specified in the transfer act.

Practical Significance

A merger is most often used for:

business expansion;
consolidation of assets of a group of companies;
reduction of administrative expenses;
entry into new markets.

ACCESSION OF A COMPANY

Accession is the termination of one or more companies with the transfer of all their rights and obligations to another existing company.

Main stages:

Adoption of a decision by each company.
Approval of the accession agreement.
Approval of the transfer act by the acceding company.
Holding a joint meeting of participants.
Making amendments to the constituent documents of the successor company.

After completion of the procedure, all rights and obligations of the acceding company pass to the receiving company.

Advantages of Accession

there is no need to create a new legal entity;
preservation of licenses, contracts, and business reputation of the receiving company;
simplified business integration.

DIVISION OF A COMPANY

Division means the termination of a company’s activities with the transfer of its rights and obligations to two or more newly created companies.

The general meeting adopts a decision on:

division;
the procedure and terms of division;
establishment of new companies;
approval of the separation balance sheet.

All rights and obligations are distributed among the new companies in accordance with the separation balance sheet.

If it is impossible to determine the legal successor, all newly created companies bear joint and several liability to the creditors of the reorganized company.

Practical Application

Division is applied in cases of:

separation of independent business areas;
corporate conflicts between participants;
sale of part of the business to investors.

SPIN-OFF OF A COMPANY

A spin-off means the creation of one or more new companies without termination of the activities of the original company.

The distinctive feature of this form is that the existing LLC continues to exist, while part of its property, rights, and obligations is transferred to newly created companies on the basis of a separation balance sheet.

Advantages of Spin-off

possibility to separate risky business areas;
creation of holding structures;
preparation of the business for attracting investments;
optimization of asset management.

TRANSFORMATION OF A COMPANY

Transformation means a change in the organizational and legal form of a legal entity.

An LLC may be transformed into:

a joint-stock company;
a production cooperative;
other organizational and legal forms provided for by legislation.

In a transformation, universal succession takes place, and all rights and obligations are retained by the new legal entity.

Most Common Cases

preparation of a company for an IPO;
increase in the number of participants;
attraction of major investors;
change of the corporate governance model.

Transfer Act and Separation Balance Sheet

The key documents in reorganization are:

Form of reorganization	Document
Merger	Transfer act
Accession	Transfer act
Division	Separation balance sheet
Spin-off	Separation balance sheet
Transformation	Transfer act

These documents must contain information on all rights and obligations of the reorganized company, including disputed obligations and obligations to creditors.

State Registration of Reorganization

The Law links completion of reorganization to state registration.

A company is considered reorganized:

in case of merger, division, spin-off, and transformation — from the moment of state registration of the new legal entities;
in case of accession — from the moment an entry is made on termination of the activities of the acceding company.

It is from this moment that the legal consequences of reorganization arise and the transfer of rights and obligations takes place.

Comparative Table of LLC Reorganization Options

No.	Form of reorganization	Essence	What happens to the original LLC	Is a new legal entity created?	Where do rights and obligations pass?	Main document	When it is convenient to apply
1	Merger	Two or more LLCs are combined into one new company.	All participating companies terminate their activities.	Yes, a new company is created.	All rights and obligations of each company pass to the new company.	Merger agreement, charter of the new company, transfer act.	For consolidation of business, assets, clients, personnel, and management.
2	Accession	One or more LLCs are joined to an already existing LLC.	The acceding LLC terminates its activities; the receiving LLC continues to exist.	No, no new company is created.	All rights and obligations of the acceding company pass to the receiving company.	Accession agreement, transfer act, amendments to the charter of the receiving company.	For acquisition of a company, simplification of a group of companies, and consolidation of assets.
3	Division	One LLC is divided into two or more new companies.	The original LLC terminates its activities.	Yes, two or more new companies are created.	All rights and obligations are distributed among the new companies according to the separation balance sheet.	Separation balance sheet, constituent documents of the new companies.	For division of business between participants or separation of independent business areas.
4	Spin-off	One or more new companies are created from an LLC, while the LLC itself continues to exist.	The original LLC continues to exist.	Yes, one or more new companies are created.	Part of the rights and obligations passes to the spun-off companies according to the separation balance sheet.	Separation balance sheet, charter of the new company, amendments to the charter of the reorganized LLC.	For separation of assets, risks, projects, or business areas without liquidation of the main LLC.
5	Transformation	An LLC changes its organizational and legal form.	The LLC ceases to exist in its former form, but the business continues in a new form.	A legal entity arises in a new organizational and legal form.	All rights and obligations pass to the transformed legal entity.	Decision on transformation, constituent documents of the new form, transfer act.	For transition, for example, to a joint-stock model, attraction of investments, or change of corporate structure.