To which corporate forms do the proposals apply?
In the Netherlands, the new harmonised European procedure for cross-border mergers, divisions and conversions and the complete online establishment of a company will apply in principle to private limited-liability companies (besloten vennootschappen) and public limited companies (naamloze vennootschappen). It should be noted that the Member States may opt not to allow public limited companies, such as the NV, to be fully established online.
For Belgium, the proposals indicate that the new rules apply to the public limited company (naamloze vennootschap/société anonyme), the limited partnership with shares (commanditaire vennootschap op aandelen/société en commandite par actions) and the private limited-liability company (besloten vennootschap met beperkte aansprakelijkheid/société privée à responsabilité limitée). As in the Netherlands, the NV/SA may be excluded from the scope of full online establishment. Furthermore, Belgium will take the necessary steps to ensure that the proposal on cross-border mergers, divisions and conversions applies to all corporate forms, as such rules already exist under national law.
For Luxembourg, the rules will apply to the public limited-liability company (société anonyme), the partnership limited by shares (société en commandite par actions) and the private limited-liability company (société à responsabilité limitée), with the possibility to exclude the SA and, potentially, the SCA from full online establishment. At present, the Luxembourg rules on cross-border mergers are flexible and allow a cross-border merger with any Luxembourg company or limited partnership with legal personality. In addition, the cross-border merger of a Luxembourg company with a foreign (i.e. non-EU) company is allowed to the extent it is not prohibited under the applicable foreign law and the non-EU company complies with the provisions and formalities of its national law.
What is the procedure for a cross-border merger, division or conversion?
The procedure for cross-border mergers remains largely the same as provided for by the current Merger Directive (Directive 2005/56/EC, codified in Directive 2017/1132) with the addition of new rules for simple mergers and new protective measures for shareholders and creditors. The new procedure for a cross-border division or conversion will be, for the most part, the same as the cross-border merger procedure. The new protective measures include, amongst other things, the possibility for the Member State to require the company to declare that it sees no reason why it should no longer be able to fulfill its obligations after the transaction and that creditors who are dissatisfied with the protection provided may request appropriate safeguards with the competent administrative or judicial body. Minority shareholders that voted against the cross-border transaction may be eligible for cash compensation.
What is the procedure for online establishment?
All required documents must be uploaded online using e-IDs and electronic signatures (in keeping with Regulation (EU) 910/2014). To prevent abuse, national authorities can use each other’s information about banned directors. The public authorities may also require that certain professionals (such as notaries) be involved in the establishment of the company, provided the founders can fully complete the procedure online. Personal appearance by the founders may be required only if there are suspicions of fraud.
What are the next steps?
The proposals for the directives will now be discussed by the European Council and the European Parliament, which will have to agree on them. Afterwards, the Member States will have a so-called transposition period, within which the directives must be implemented in national law. The 2009 proposal for a directive on single-member private limited liability companies (Societas Unius Personae or SUP), which could be set up online in every Member State, will be withdrawn.
Compliments of NautaDulith, a member of the EACCNY