In an acquisition for the purpose of obtaining control, there should be two important signs for investors to complete the acquisition:
first, change the register of shareholders (or articles of association) to achieve legal control;
Second, transfer seals, replace personnel in core positions, etc., to realize the transfer of operating rights on the entity.

Generally speaking, the transfer of management rights can include two parts:

1. The transfer of the company's main seals (including official seals, legal representative seals, special financial seals, etc.), business licenses, payment keys (including bank U shields, electronic passwords, etc.), financial account books, asset warrants, contract documents and other materials.
2. Replacement of personnel in core positions, especially those who can represent the company externally or have the authority to approve and approve operations (such as legal representatives, executive directors, general managers, and financial officers) in accordance with laws and the articles of association.

After the completion of the above two links, the author believes that the company's management rights have been transferred. The following is an explanation of the key points of the delivery of management rights:

1. Transfer of information

Transfer of main seals, business licenses, payment keys, financial account books, asset warrants, contract documents and other materials. The handover list shall be counted and prepared on the day of handover, and shall be signed and confirmed by both parties. The "Handover List" should at least include: the items to be delivered, the quantity, the degree of completeness, and the delivery time. If the relevant seals are condominated during the transition period, a "Handover List" should be made at the beginning of the condominium and at the end of the condominium.

• Transfer of official seal: In practice, it is possible to consider incision treatment of the original seal of the reorganization enterprise (that is, making multi-angle incisions on the printing surface of the original seal and marking the mark), and formulate a seal incision comparison table to compare the seal impression before the incision with the seal impression after the incision, so as to divide the users before and after. But even so, after the completion of the merger and acquisition, it is recommended that the new shareholders engrave a new seal.
• Payment key: In addition to making the "handover list", the password should be changed in time after receiving the key to ensure the security of funds.

• Other business information (financial documents, property licenses): The completeness and authenticity should be checked as soon as possible after the completion of the delivery, and the original materials should be checked if necessary.

2. Changes in core positions

(1) Change of legal representative

After the reorganization enterprise passes the resolution to change the legal representative, it should promptly issue an announcement on the change of the legal representative, and withdraw the company's seal and company license from the original legal representative, and bring the company registration (filing) application, shareholders' resolution signed by all shareholders, the appointment documents and identity certificates of the new legal representative to the industrial and commercial department for change registration.

Risk warning: If the original legal representative signs a contract externally during the period from the adoption of the resolution to the change registration, the company shall not confront a bona fide third party according to the internal resolution, and the contract may have legal effect on the company. The announcement issued can be evidence to prove that the third party is aware or should have known.

(2) Changes in other core positions (directors, supervisors, senior executives).

The transfer of personnel management is generally divided into aggressive transfer and gradual transfer.

• Usually, the reorganization enterprise is an asset-heavy enterprise or the core purpose of the M&A transaction is to acquire core assets, and the transfer of the reorganized enterprise should adopt a radical transfer.
• For the reorganization enterprise is an asset-light enterprise, especially the company whose main business scope is technical research, design and development and other technical and professional talents, it is more suitable to adopt gradual transfer.

The change of personnel in other core positions should pay attention to the following links:

1. After the completion of the M&A transaction, the overall evaluation will be conducted in a timely manner according to the original management personnel, and then the personnel structure, scope of responsibilities, and deliberation authority of the core positions such as the board of directors, board of supervisors, general manager, and financial officer of the reorganized enterprise will be adjusted. It is optional to maintain the smooth continuation of the original operation and management, and at the same time achieve effective management of major decision-making matters of the reorganization enterprise.

2. If the main business of the restructuring enterprise is highly dependent on core management personnel and technical R&D personnel, it can also consider employee equity incentives according to the operating conditions of the reorganized enterprise after the completion of the merger and acquisition transaction, and empower the company's original employees through an effective equity incentive model, so as to transform the previous supervision and management of management into win-win cooperation.

3. To make a list of core talents of the restructuring enterprise, the list can refer to the following four standards:

   • can help enterprises gain competitive advantage;
   • can improve the performance of the enterprise;
   • mastering key technical links;
   • It can increase the added value of products.

4. At the same time as signing the transaction documents with the transaction party, the core management and technical R&D personnel of the restructuring enterprise to be retained need to sign supporting legal documents such as the "Tenure Commitment", "Non-Compete Commitment", and "Confidentiality Commitment", so as to ensure the stability of the core personnel and the impact on the company's main business through the constraints of the commitment.

5. Before the new executives achieve control, the original executives will continue to stay in the company, but will not participate in the operation and assist the new executives; the replaced executives should be properly arranged; and give sufficient support to the new executives. In addition, the company's directors, supervisors and senior management are generally elected or appointed through shareholders' meetings and board of directors, so the replacement time of the company's directors and senior management can be subject to the time of relevant resolutions and decisions.

6. Conduct corporate culture training to make the employees left by the reorganized enterprise have a sense of identity and belonging to the company.