Directive 2019/2121 - Amendment of Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions - Main contents
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Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions| Legal instrument | Directive |
|---|---|
| Number legal act | Directive 2019/2121 |
| Original proposal | COM(2018)241  |
| CELEX number i | 32019L2121 |
| Document | 27-11-2019; Date of signature |
|---|---|
| Publication in Official Journal | 12-12-2019; OJ L 321 p. 1-44 |
| Signature | 27-11-2019 |
| Effect | 01-01-2020; Entry into force Date pub. +20 See Art 5 |
| Deadline | 01-02-2027; Review See Art 4.1 |
| End of validity | 31-12-9999 |
| Transposition | 31-01-2023; See Art 3.1 |
12.12.2019 |
EN |
Official Journal of the European Union |
L 321/1 |
DIRECTIVE (EU) 2019/2121 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 27 November 2019
amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 50(1) and (2) thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Economic and Social Committee (1),
Acting in accordance with the ordinary legislative procedure (2),
Whereas:
(1) |
Directive (EU) 2017/1132 of the European Parliament and of the Council (3) regulates cross‐border mergers of limited liability companies. The rules on cross-border mergers represent a significant milestone in improving the functioning of the internal market for companies and firms and their exercise of the freedom of establishment. However, evaluation of those rules shows that they need to be changed. Furthermore, it is appropriate to provide for rules regulating cross-border conversions and divisions, since Directive (EU) 2017/1132 only provides for rules on domestic divisions of public limited liability companies. |
(2) |
Freedom of establishment is one of the fundamental principles of Union law. Under the second paragraph of Article 49 of the Treaty on the Functioning of the European Union (‘TFEU’), when read in conjunction with Article 54 of the TFEU, the freedom of establishment for companies or firms includes, inter alia, the right to form and manage such companies or firms under the conditions laid down by the legislation of the Member State of establishment. This has been interpreted by the Court of Justice of the European Union as encompassing the right of a company or firm formed in accordance with the legislation of a Member State to convert itself into a company or firm governed by the law of another Member State, provided that the conditions laid down by the legislation of that other Member State are satisfied and, in particular, that the test adopted by the latter Member State to determine the connection of a company or firm with its national legal order is satisfied. |
(3) |
In the absence of harmonisation of Union law, defining the connecting factor that determines the national law applicable to a company or firm falls, in accordance with Article 54 of the TFEU, within the competence of each Member State. Article 54 of the TFEU places the connecting factors of the registered office, the central administration and the principal place of business of a company or firm on an equal footing. Therefore, as clarified in case-law, the fact that only the registered office, and not the central administration or principal place of business, is transferred does not as such exclude the applicability of the freedom of establishment under Article 49 of the TFEU. |
(4) |
Developments in the case-law have opened up new opportunities for companies in the internal market to foster economic growth, effective competition and productivity. At the same time, the objective of an internal market without internal borders for companies has also to be reconciled with other objectives of European integration, such as social protection as set out in Article 3 of the Treaty on European Union (TEU) and Article 9 of the TFEU, as well as the promotion of social dialogue as set out in Articles 151 and 152 of the TFEU. The rights of companies to convert, merge and divide across borders should go hand in hand, and be properly balanced, with the protection of employees, creditors and members. |
(5) |
The lack of a legal framework for cross-border conversions and... |
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