The Legal Framework for The Merger of Companies According to the Saudi Companies Law - A Comparative Study of UAE Law

Abstract

The merger of companies may affect the legal personality of the company, shareholders, and creditors. However, it is of great importance in economic life as it is considered one of the most important foundations of the competition process. It also helps increase production and benefit from the investments necessary to prepare economic projects. It aims to achieve the greatest possible profit, and enables the companies concerned to enjoy the economic capacity that enables them to gain huge amounts of money that help them expand the project. It also works to protect companies from bankruptcy, which enables them to enter new markets that they aim to enter through the merger process with another company.

This research concluded that the Saudi regulator and the Emirati legislator have arranged for the completion of the merger process and its implementation to have effects, the most important of which is the transfer of all the rights and obligations of the merged company or companies. Among these obligations are undoubtedly the debts owed to others by the merged company. To further emphasize, the Saudi regulator considered the merging company or the company resulting from the merger to be a successor to the merged company, and therefore it succeeds it in its obligations, including the debts owed by this company to others before the merger.

This research concluded that it is necessary to organize the legal merger process of companies in some detail than the current situation, by setting the regulatory controls for this process, its procedures and the resulting effects, especially with regard to the rights of creditors and contracts concluded with the merged companies in more detail, in order to ensure the success of this process and achieve the desired goal, in a manner that is consistent with commercial companies, and for the major economic and investment role they play within the Kingdom and in an effort to achieve the Kingdom's Economic Vision 2030.