EASIER COMPANY RULES FOR MERGER, DIVISION OR MOVE WITHIN THE EU SINGLE MARKET

The European Commission proposed new company law rules on 25 April 2018 to provide companies better business opportunities in the EU’s Single Market and to ensure that cross-border operations (conversions, mergers and divisions) are accompanied by adequate safeguards against abuse. The new company law proposals include two draft laws, one on adapting company law to the digital age, and one on the cross-border mobility of companies.

According to the proposals, it will be possible to create a company fully online, including across borders, and to move, merge or divide a company across national borders within the EU, without having unnecessary burdens and paying unnecessary costs, provided that the operation is not artificial or abusive and that the interests of stakeholders (employees, shareholders, creditors) are protected. In addition, the transfer of the seats of the companies to another Member State will be carried out under a new simplified online procedure. It would also provide the opportunity to create new branches and to submit documents to the Company Register online.

The proposal reacts the development of the European economy that needs new rules to make easier the cross-border growth of the companies. The proposal will be submitted to the Council of the European Union and the European Parliament for consideration and final adoption. Once approved, the new Directive would have to be implemented into the laws of all EU Member States.