--- title: "EOR after a merger, acquisition or entity closure" description: "An entity has closed, sold or spun off and people are still in it. What an EOR can and cannot do, and why a rehire is not the same as a statutory transfer." canonical: https://www.teamed.global/insights/eor-after-a-merger-acquisition-or-entity-closure datePublished: 2026-09-22T12:00:00.000Z --- Last updated: 22 September 2026 An entity has closed, sold or spun off. There are people still inside it. Becoming those employees' employer of record is normally a new employment relationship, not a continuation of the old one. That holds whatever the deal shape. Some countries have separate statutory transfer rules. Those rules can preserve continuous employment automatically when specific conditions are met. Whether one applies to a given deal depends on that country's law and on how the deal is structured. That is a legal question for counsel in the country concerned. This page does not answer it for any specific case. What follows is the shape of the four situations we see. It covers what has to be settled before any handover, and what an EOR can and cannot do at each stage. ## Why doesn't a rehire under an EOR carry over continuity of service? Because in most cases it is a new contract with a new legal employer. A statutory transfer is different. Where a country has one, it happens automatically by operation of law, once specific conditions are met. A rehire under an EOR does not do that by default. When Teamed becomes an employee's employer of record after an entity closes, sells, carves out or spins off, that is ordinarily a fresh employment contract. Teamed is the new legal employer. It is not automatically the same employment relationship the person had before, carried forward. A number of countries have their own rules for when employment carries over automatically in a business transfer, sale or restructuring. Whether one of those rules applies to a specific deal turns on that country's law. It also turns on exactly how the deal is structured. Both sit outside the scope of a general guide. This page does not state which situations trigger a statutory transfer in which country, and it should not be read as though it does. That call needs legal counsel qualified in the country where the employees are. Get it before anyone assumes continuity applies, or assumes it does not. This matters, because continuity of service is not just a form of words. Where it applies, it usually affects how much notice an employee is owed. It affects how leave and other tenure-based entitlements are calculated. It also affects what an employer owes if the role is later made redundant. Getting the assumption wrong in either direction has a cost. An employee can be left short of something they were legally owed. A company can think it owes more than it does. ## The four situations we see The trigger is always corporate change. The shape of what happens next is not always the same. ### Office or entity closure, retaining a handful of people The client is closing a legal entity in a country, or an office within one. It still wants to keep employing one or more of the people who worked there. The prior entity has to complete its own closure process for those employees first, under that country's law. That means whatever notice, consultation or termination steps apply, plus final pay. Only once that is properly finished does Teamed take the person on as a new employer of record. There is no route that skips this step. There is no route that lets Teamed employ someone whose prior employment has not yet ended. ### Carve-out or divestiture Part of a business is separated out, sold or divested. The employees inside it need a new employer, because the entity that used to employ them is not the one keeping them. This is the shape where a statutory transfer rule is most likely to be in play, in the countries that have one. Carve-outs are the kind of transaction those rules were often written with in mind. That does not mean one applies here. It means this is exactly the situation where the deal's own legal advisers need to confirm the position. They need to do that before anyone tells the affected employees anything. Either the employment transfers automatically, or the employees are being offered a new contract. ### Management buyout or spin-out A management team buys out a division, or a subsidiary is spun into its own company. The new company needs to become the employer of its own people. Sometimes that is in countries where it holds no entity of its own yet. The same rule applies here as elsewhere on this page. Whether continuity of service carries over is a question for that country's law. It is not something this page, or Teamed generally, decides on the new company's behalf. ### Acquisition of a company with people in markets you have no entity in The buyer acquires a company that employs people in a country where the buyer itself holds no legal entity. Three things need to be clear before anything else. Which entity currently employs the acquired staff. Whether that entity, or the employment itself, is being legally transferred, dissolved, or ended with new contracts offered. And whether the buyer intends to set up its own entity in that market later, or use an employer of record for the medium term. Teamed's ability to help here is bounded by where Teamed itself has entity or partner coverage. That has to be checked country by country. It is not a given. ## What has to be settled before the handover Five things, in roughly this order. - **How the prior employment ended or transferred.** Confirmed against that country's law. Never assumed from how a similar deal worked somewhere else. - **Which employees are in scope, and their current status.** Whether each person is already fully terminated with the old employer, mid-notice, mid-consultation, or already subject to a transfer. - **How accrued leave, bonuses and benefits from the old employer are treated.** Decided and put in writing to the employee before the handover, not worked out afterwards. - **Local legal sign-off on whether continuity of service applies.** One way or the other, from counsel qualified in that country. Not inferred from this page, or from how another country handled a similar case. - **Confirmation that Teamed, or another partner, has coverage in every affected country.** Coverage is not universal. It has to be checked market by market, before any commitment is made to the client or the employees. *One assumption sits in this section. Where a deal spans more than one country, we assume each country's legal position is checked separately, rather than resolved once for the whole deal. A client's own process may resolve it differently, for example through a single group-wide legal opinion. In that case, read the sequence above as a minimum, not as a substitute for that process.* ## What is a realistic timeline? Mostly gated by the legal and documentation questions above, not by onboarding mechanics. Once the legal position in a given country is settled, the rest moves quickly. Settled means it is clear whether the move is a fresh contract or a transfer, and the paperwork for that is ready. Taking on an employee as an employer of record is then typically the fast part. The slower part is confirming the legal position itself, and getting sign-off internally and from counsel. A deal that spans several countries will generally take longer than a single-country closure. Each country's legal position has to be checked on its own terms. We have not put a specific week or month figure on this page. It depends on how many countries are involved. It depends on how quickly counsel can turn an opinion around in each one. It also depends on how much of the prior entity's own closure process is already complete. Anyone quoting a fixed timeline for a case like this, without knowing those specifics, is guessing. ## What Teamed can still do Two things, once the legal position is settled. Teamed does not decide whether continuity of service or a statutory transfer applies to a specific deal. That is an answer only the client's own legal counsel can give, for that country. First, the employment itself. Once it is clear, country by country, whether a given employee is moving onto a fresh contract or is subject to a statutory transfer, Teamed can take over. The client also has to have settled how prior leave, bonuses and benefits are treated. From that point Teamed can be that employee's employer of record. That covers payroll, statutory benefits, tax and the employment paperwork in that country going forward. Second, the join. Teamed can set the new contract's start date to line up with the end of the prior employment. That way there is no gap in pay or benefit cover for the employee. Teamed can also flag early where a country's rules mean the client needs its own legal review first. Coverage depends on the country. Where Teamed has no entity or partner coverage in the market the employees are in, we say so plainly, rather than build a workaround. *A rehire is not a transfer. Say so before the employee asks, not after they have already assumed their tenure carried over.* Teamed Legal Operations. ## Frequently asked questions ### Does an employee's service carry over automatically when we move them onto an EOR after closing our entity? Usually not. A rehire under an EOR is normally a new employment relationship with a new legal employer, not a continuation of the old one. Some countries have separate statutory transfer rules that can preserve continuity in specific circumstances. Whether one applies to a given deal is a question for that country's law. It needs local legal advice, not a general assumption either way. ### What is the difference between a rehire under an EOR and a statutory transfer? A statutory transfer happens automatically by operation of law, when specific conditions are met, and it preserves continuous employment. A rehire under an EOR is a fresh employment contract, with the EOR as the new legal employer. Continuity does not carry over, unless local law and the deal's structure say otherwise. Which one applies is a legal question. It is answered by counsel in the country concerned, not by Teamed. ### Can Teamed take on employees who are still mid-notice or mid-consultation from a restructuring? Only once the client has completed its own legal process for those employees under local law. That might be a redundancy consultation, a works council step, or a transfer notice. Their prior employment also has to have properly ended or transferred. Teamed becomes the new employer after that point, not during it. ### What has to be settled before Teamed can take over any of these employees? Five things. How the prior employment ended or transferred under that country's law. Which employees are in scope, and their current status. How accrued leave, bonuses and benefits from the old employer are treated. Local legal sign-off on whether continuity of service applies. And confirmation that Teamed or another partner has coverage in every affected country. ### How long does this kind of handover usually take? It depends mainly on how quickly the legal and documentation questions get answered. It does not depend on how fast an EOR can onboard someone. Once the legal position is settled, the employer of record side of the move is usually the fast part. A handover spanning several countries takes longer, because each country needs its own check. ### Can Teamed take on acquired employees in a country where the buyer has no entity and Teamed doesn't currently operate either? Only where Teamed has its own entity or partner coverage in that specific country. Coverage varies by market. If Teamed does not operate in the country where the affected employees are, the honest answer is to say so, rather than force a workaround. ## A note from Teamed Deals like these put real people in an uncertain spot, often through no choice of their own. We would rather tell a client plainly that continuity does not carry over by default. The answer needs a lawyer in that specific country. Letting an assumption stand, because it was easier to leave unsaid, helps nobody. Ask the continuity question before the employee does, not after the offer has gone out. Once the legal position is settled, we are ready to take on the employment relationship. **A note on this page.** This is a guide, not legal advice. Whether continuity of service, accrued rights or a statutory transfer applies to a specific merger, acquisition, entity closure or restructuring depends on the country involved and on the exact structure of the deal. Get advice from a qualified employment lawyer in each affected country before relying on any specific position. Related reading: [how to transfer employees from EOR to direct employment](/insights/how-to-transfer-employees-from-eor-to-direct-employment) covers the opposite direction. [US employment law changes after an acquisition](/insights/employment-laws-usa-2026-after-acquisition-first-changes) covers the same moment in one market. [EOR vs your own entity](/compare/eor-vs-own-entity) and [Employer of Record](/employer-of-record) explain the two models. The [employer cost calculator](/tools/employer-cost) prices a hire in a given country.