29th May 2018 |
The Department of Business Enterprise and Innovation is seeking the views of interested parties on a recent proposal by the European Commission.
This proposal (one element of the Commission’s “Company Law Package”), see documents below, seeks to provide specific and comprehensive procedures for cross-border conversions, divisions and mergers of companies to foster cross-border mobility in the EU, while at the same time offering stakeholders (creditors, employees and members) adequate protection in order to safeguard the fairness of the Single Market.
Cross-border conversion is about ensuring that a company with its registered office in one Member State can move, without completing a formal wind-up process, to another Member State without losing its legal personality. The proposal rests on the principle of freedom of establishment and European Court of Justice has recently ruled, in Polbud, that a national rule which imposes a winding up prerequisite on a cross-border transfer of a company is an unjustified and disproportionate restriction.
Cross-border mergers and divisions both refer to situations where a company wishes to exercise its freedom of establishment by offering the company a way to reorganise or simplify its corporate structures, adapt to changing market conditions and realise new market opportunities in another member state. There are no EU provisions providing for harmonisation on cross-border divisions. There is an existing EU Directive on cross-border mergers (Directive 2005/56/EC on cross-border mergers of limited liability companies) which this proposal will amend.
The proposal will therefore be of interest to companies and their members and employees, as well as potential creditors.
The Commission proposal has been sent to the Council of the European Union (composed of the governments of the EU Member States) and the European Parliament, for discussion, possible amendment, and agreement. The proposal will be considered in the first instance by the relevant EU Council Working Party.
How to send submissions
As part of Ireland’s national scrutiny of the proposal, the Department of Business, Enterprise and Innovation welcomes views on the proposal, and invites stakeholders and other interested parties to make a submission.
Respondents may send their views in writing (preferably by email) to the address below. Submissions should be marked 'Consultation - EU Commission Proposed Directive on cross-border conversions, division and mergers '. Submissions should arrive not later than Monday 2 July 2018.
Consultation on Proposed Directive on cross-border conversions, divisions and mergers,
c/o Company Law Unit,
Department of Business, Enterprise and Innovation,
Lower Hatch Street,
Freedom of Information and Publication of Submissions
Please note that all submissions received will be subject to the Freedom of Information Act 2014. Consequently, when submitting material, parties should specify any information which they consider should not be released, and identify the grounds under the Act which support the non-release of the information.
The Department may decide to place submissions received on its website in due course. A decision on any such placement may occur without prior consultation with respondents to this consultation process.
If a respondent does not wish any material contained in its submission to be published in this way because it is considered commercially sensitive or confidential, then this should be clearly indicated (with reasons) in the submission.
Further information may be obtained by contacting: Helen Curley – Telephone: 01 631 2638 or email: email@example.com.
Proposal for a directive amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions
Impact assessment - Proposal for a directive amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions and as regards the use of digital tools and processes in company law
Executive summary of the impact assessment - Proposal for a directive amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions and as regards the use of digital tools and processes in company law
Commerce, Consumer and Competition