The licensing issue is relatively simple in case of two entities using SAP merge. The entity established after the merger becomes the “heir" to the license rights of both merging companies to the extent provided by the agreement for each entity. When we carve out a new entity, in which, however, the parent company retains more than 50% of the shares, we can transfer the required part of the license to it. However, if we don’t retain a controlling stake in the new company, and we want to transfer the licenses on to it, we must ask in advance the software vendor for its consent.

The license conditions do not limit the possibility of extending the system to a new entity in the capital group. In this case, the scope of using the software is most often extended, requiring the purchase of additional licenses or subscriptions, if the software is a cloud-based solution. It remains the responsibility of the licensee to inform the software manufacturer of the change in legal status and to indicate the entity with which the license rights remain.

The situation is not obvious when the enterprise that doesn’t have the system acquires a controlling stake of the company which already has SAP and wants to use its system in the future. SAP is usually a vital company asset – including infrastructure, configuration, master data, the administrator and user competence and, of course, license rights. The use of the system by the new owner is subject to the approval of the software manufacturer, SAP company. Make sure that the manufacturer gives such consent. It is not obvious when the entity we acquire uses specific license terms applicable to its previous owner. In this case, the system manufacturer may refuse to grant consent, and therefore, if we want to use SAP software, we will be obliged to acquire software license rights.

The above remarks apply to standard contractual terms and conditions that may differ in individual contracts with SAP, therefore getting familiar with the license agreement in detail should be an element of each audit before the acquisition of any company. SNP (now All for One Poland) as a Channel Partner under the SAP Partner Edge program authorizing the sale of SAP licenses and SAP subscriptions provides you with knowledge of the legal conditions for using the SAP system.