Companies Act 2014 section 461

Interpretation (Chapter 3)

Section 461 defines the key terms used throughout the chapter on mergers, establishing the meanings of words such as "merger", "merging company", "successor company", "transferor company", and "share exchange ratio".

• A merger can take three forms: by acquisition, by absorption, or by formation of a new company, and the term "director" means the liquidator where a company is being wound up.
• A merging company is either a transferor or successor company in a merger by acquisition or absorption, but only a transferor company where the merger involves forming a new company.
• The share exchange ratio is the number of shares or securities in the successor company to be allotted to members of a transferor company in exchange for a given number of their existing shares, as set out in the common draft terms of merger.
• The successor company receives the assets and liabilities, while the transferor company is the one whose assets and liabilities are transferred; an "acquisition of a company" means acquiring its assets and liabilities by way of a merger under this chapter.