6. Splits

Chapter 6



by: josavere


They are separations. A company transfers its assets and liabilities (patrimony) to form a new company or to increase the patrimony of another company, which already exists. It does not imply dissolution.  This process can be combined with another type of operations as follows: 

A. PARTITION - INCORPORATION: when the company being segmented joins an existing company. 

B. PARTITION - MERGER: when patrimonial portions of two or more existing companies divide to establish a new company. 

C. OWN PARTITION: when part of the patrimony of a company is segregated to establish a new company.

Based on the previous definitions, there will be partitions when:

  • A company without being settled transfers, in the block, one or several parts of its patrimony to one or more existing companies, or appoints them to the one establishment of one or several companies.

  • A company is dissolved without being settled; it divides its patrimony into two or more parts, which are transferred to several existing companies, or this patrimony is appointed to the establishment of new companies.

There can also be multiple partitions when several companies are segmented to establish one or several beneficiary companies.


A. DIVIDING COMPANY: an enterprise or enterprise, which produces the partition.

B. BENEFICIARY COMPANY: it is the resulting company from the partition. 


a. To increase productivity through its specialization and decentralized activities to implement the Benchmarking.

b. To make possible strategic alliances or to attract investors.

c. To improve the measurement process to make possible a better calculation for management indexes of each activity based on international indexes as globalization demands it.

d. To determine the profile of each type of activity, because the different economic sectors present essential differences related to the type of business, cash needs, financing alternatives, etc.

e. To make it possible, for specialized companies, the understanding of the financial information in a clear and simple way.

f. In certain cases, it simplifies the solution of conflicts among partners. 


It constitutes a key element for a partition due to the effects that it can have on the shareholders. For them, it implies giving up their rights in the dividing company and receiving shares of the divided society. A method of recognized technical value suitable for the nature, particularities, and special characteristics of the company should be used.

Example: on September 30, 1997, Bavaria S.A.  Carried out an oriented partition to separate their industrial activity from their investments. The dividing company, Bavaria S.A. proposed a partition in two different stock companies; one dedicated to the industry that keeps the trade name Bavaria S.A. and another one specialized in investment activities, VALORES BAVARIA S.A. These companies, in turn, will become matrices of the group of companies that fulfill similar activities.

Assets were divided. Those related to the industrial activity that remained in BAVARIA S.A. (the divided company) and the corresponding investments, were transferred to Bavaria Values S.A. (the beneficiary company). The former company keeps the subscribed and paid capital; VALORES BAVARIA was established with a patrimony equivalent to the assets minus the liabilities, which were transferred from the dividing company.

Bavaria S.A.
Valores Bavaria S.A.
Assets 4.721.990 3.265.860 1.456.129
Liabilities 928.156 759.384 168.771
Patrimony 3.793.834 2.506.476 1.287.358

To each one of the shareholders registered in the book of the dividing company, a share of Values Bavaria S.A. (the beneficiary company) was given for each share they had in Bavaria S.A. to conserve the initial percentage. 


A. AGREEMENTS: a conventional period, when the project should be analyzed and widely discussed and approved by the Boards of Directors and corresponding assemblies of shareholders. 

B. PERMISSIONS: previous approval of the Superintendence which controls and supervises the companies involved in the dividing process; and previous fulfillment of the legal requirements. 

C. PUBLICATIONS: notices in newspapers of nationwide and regional circulation, as well as a communication to the creditors of the dividing company filling out pre-established formats to announce the partition. 

D. LEGALIZATION: by notarization and registry of the deed of partition, the statutory reform or inter-company agreements should be legalized, with the acceptance - before a Public Notary - of the legal representatives of the companies involved. 

E. LEFT RESPONSIBILITIES: the dividing company (is) and beneficiary company (is), hold joint-liable responsibilities for payments to creditors transferred to the beneficiary companies and, in general, of the obligations, but only to the number of net assets the new company has received in the partition agreement. 


a. The assembly of shareholders of the company to be divided should approve the partition according to the majority of votes by Law. 

b. The beneficiary company (is) should approve the partition in the corresponding meetings.

c.The following recommendations should be followed for the project to be accepted:

  • Reasons and conditions of the partition.
  • Trade name and NIT of the companies to be transformed.
  • Statutes of the new company (or companies) if established.
  • Discriminated valuation of the assets and liabilities being divided.
  • Form of distribution of the beneficiary company’s shares to the partners of the divided company, explaining the estimated methods used.
  • Special options (creditors), if agreed.
  • Duly certified financial statements.
  • The exact date for the beginning of independent operations. 


Public notice of the partition should be published in a newspaper of nationwide circulation and in a local one (in the main office of the company) fulfilling the same characteristics. The DIVIDING COMPANY as well as the BENEFICIARY ONE becomes jointly liable entities in relation to their previous obligations and the acquired ones in relation to the process of partition. In the beneficiary company, capital is established or increased, for this reason, an emission of shares should be made or contributions should be increased, to deliver certifications to the partners of the dividing company, whose participation in the beneficiary company is determined by the percentage of participation of nominal capital of the former company.

The divided company should establish an economic unit by itself or should complement an existing one, so it should meet the following requirements:

a. The economic unit should be a part joined within the social patrimony of the divided company.

b. Due to its own structure, it should exert an enterprise activity.

c. It should have certain autonomy; that is to say, to serve for an activity that can separate and develop independently from the activities carried out by the remaining patrimonial elements of the DIVIDED Company.

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