Nell’ambito del diritto societario, la recente aggiunta al corpus del diritto societario dell’Unione europea è la direttiva 2017/1132/UE, che pone le basi per la creazione di un diritto societario europeo uniforme, in grado di favorire l’adempimento della libertà di stabilimento e raggiungere la libertà di impresa. In tale contesto, il contributo si propone di illustrare le disposizioni dettate dalla Direttiva 2017/1132/UE, che opera principalmente come organizzazione sistematica del diritto comunitario in materia di diritto societario.

SOMMARIO:

1. Introduction: subject matter - 2. The Establishment and Functioning of Limited Liability Companies - 2.1.2. Nullity of the limited liability company and validity of its obligations - 2.2. Disclosure and Interconnection of the Central, Commercial and Companies Registers - 2.2.2. Disclosure Rules Applicable to Branches of Companies from other Member States and of Companies from Third Countries - 2.3. Capital Maintenance and Alteration - 2.3.1. Capital Requirements - 2.3.2. Safeguards for Statutory Capital - 2.3.3. Rules on Distribution - 2.3.4. Rules on Companies’ Acquisitions of its own Shares - 2.3.5. Rules for the Increase of Legal Capital - 2.3.6. Rules for the Reduction of Legal Capital - 2.3.7. Serious Loss of the Subscribed Legal Capital - 3. Mergers and Divisions of Limited Liability Companies - 3.1.2. The Merger Process - 3.1.3. Consequences of the Merger and Conditions for Nullity - 3.1.4. Acquisition of One Company by Another that Holds 90% or More of its Shares - 3.1.5. Other Operations Treated as Mergers - 3.2. Cross-border Mergers of Limited Liability Companies - 3.2.2. The Cross-border Merger Process - 3.2.3. Consequences of the Cross-border Merger - 3.3. Divisions of Public Limited Liability Companies - 3.3.2. Consequences of the Division and Conditions for Nullity - 3.3.3. Division by the Formation of New Companies - 3.3.4. Division under the Supervision of a Judicial Authority - 3.3.5. Other Operations Treated as Divisions

1. Introduction: subject matter

Under Article 50 TFEU, the European Parliament and the Council of the European Union have delivered many company law directives, aiming at harmonizing the company laws of the Member States. The objective of harmonising company law is to promote the achievement of freedom of establishment (Title IV, Chapter 2 TFEU) and to implement the fundamental right enshrined in Article 16 of the Charter of Fundamental Rights of the European Union, the freedom to conduct a business within the limits of Article 17 of the Charter (i.e. right to property, also referred to as the “freedom of enterprise”). As is well known, Article 49(2) TFEU, guarantees the right to take up and pursue activities in a self-employed capacity and to set up and manage undertakings, in particular companies or firms. The purpose of European Union rules in this area is to enable businesses to be set up anywhere in the European Union, which then enjoy the freedom of movement of persons, services and capital, are able to provide protection for shareholders and other parties with a particular interest in companies, to make businesses more competitive, and to encourage businesses to cooperate across borders. Within this context, the most recent addition to the body of European Union Company Law is Directive 2017/1132/EU of 14 June 2017 (applied since 20 July 2017), which lays the foundations for the creation of a uniform European Company Law capable of promoting the fulfilment of the freedom of establishment and achieving freedom of enterprise. It operates primarily as a systematic organization of community law in the field of company law, by repealing previous Directives that concerned key areas of European Company Law. In particular, it codifies and replaces the following six Directives: Directive 82/891/EEC concerning the division of public limited liability companies; Directive 89/666/EEC concerning disclosure requirements for branches opened in an European Union country by certain types of company governed by the law of another country; Directive 2005/56/EC on cross-border mergers of limited liability companies; Directive 2009/101/EC on coordination of safeguards that are required by European Union countries of companies, with a view to making such safeguards equivalent; Directive 2011/35/EU concerning mergers of public limited liability companies; Directive 2012/30/EU on coordination of safeguards that are required by European Union countries of companies in respect of [continua ..]

2. The Establishment and Functioning of Limited Liability Companies

2.1. Incorporation and Nullity of the Company and Validity of its Obligations 2.1.1. Incorporation of the Public Liability Company In the European Union, the statutes or instruments of incorporation of a public limited liability company must make it possible for any interested person to acquaint themselves with the basic particulars of the company, including the exact composition of its legal capital. The statutes or the instrument of incorporation of a company must always provide at least the following information: the type and name of the company; the objects of the company; where the company has no authorised capital, the amount of the subscribed capital; where the company has an authorised capital, the amount thereof and also the amount of the capital subscribed at the time the company is incorporated or is authorised to commence business, and at the time of any change in the authorised capital; in so far as they are not legally determined, the rules governing the number of, and the procedure for, appointing members of the bodies responsible for representing the company vis-à-vis third parties, administration, management, supervision or control of the company and the allocation of powers among those bodies; the duration of the company, except where this is indefinite. The following information at least shall appear in either the statute or instrument of incorporation, or in a separate document published in accordance with the procedure set forth in the laws of each Member State, in accordance with the provisions concerning the disclosure in the commercial register: the registered office; the nominal value of the shares subscribed and, at least once a year, the number thereof; the number of shares subscribed without stating the nominal value, where such shares may be issued under national law; the special conditions, if any, limiting the transfer of shares; where there are several classes of shares, the information referred to in the previous points for each class and the rights attaching to the shares of each class; whether the shares are registered or bearer, where national law provides for both types, and any provisions relating to the conversion of such shares unless the procedure is set forth by law; the amount of the subscribed capital paid up at the time the company is incorporated or is authorised to commence business; the nominal value of the shares or, where there is no nominal value, the number of shares issued [continua ..]

2.1.2. Nullity of the limited liability company and validity of its obligations

The coordination of national provisions concerning the validity of obligations entered into by, and the nullity of, companies limited by shares or otherwise having limited liability, is of special importance, particularly for the purpose of protecting the interests of third parties. The protection of third parties should be ensured by provisions that restrict to the greatest possible extent the grounds on which obligations entered into the name of companies limited by shares or otherwise having limited liability are not valid. On these grounds, if, before a company being formed has acquired legal personality, actions have been carried out in its name and the company does not assume the obligations arising from such action, the persons that acted shall, without limit, be jointly and severally liable therefor, unless otherwise agreed. Completion of the formalities of disclosure of the particulars concerning the persons that, as an organ of the company, are authorised to represent it, shall constitute a bar to any irregularity in their appointment being relied upon as against third parties, unless the company proves that such third parties had knowledge thereof. As regards acts of the organs of a company and its representation: these acts shall be binding upon it even if those acts are not within the purpose of the company, unless such acts exceed the powers that the law confers or allows to be conferred on those organs; however, Member States may provide that the company shall not be bound where such acts fall outside the purpose of the company, if it proves that the third party knew that the act was outside those purposes or could not in view of the circumstances have been unaware of it; the limits on the powers of the organs of the company, arising under the statutes or from a decision of the competent organs, may not be relied on as against third parties, even if they have been disclosed. If national law provides that authority to represent a company may, in derogation from the legal rules governing the subject, be conferred by the statutes on a single person or on several persons acting jointly, that law may provide that such a provision in the statutes may be relied on as against third parties on condition that it relates to the general power of representation. Within the context of the formation of a company, in all Member States with laws that do not provide for preventive administrative or judicial control, the instrument of [continua ..]

2.2. Disclosure and Interconnection of the Central, Commercial and Companies Registers

2.2.1. General Provisions The basic documents of a company should be disclosed in order for third parties to be able to ascertain the content of the same and other information concerning the company, especially the particulars of the persons who are authorised to bind the company. Documents and particulars to be compulsorily disclosed by companies are: the instrument of incorporation, and the statutes if they are contained in a separate instrument;    any amendments to the instrument of incorporation, including any extension of the duration of the company;    after every amendment of the instrument of incorporation or of the statutes, the complete text of the instrument or statutes as amended to date;    the appointment, termination of office and particulars of the persons who: ○   are authorised to represent the company in dealings with third parties and in legal proceedings, making it apparent whether the persons authorised to represent the company may do so alone or are required to act jointly; ○   take part in the administration, supervision or control of the company;    at least once a year, the amount of the legal capital subscribed, where the instrument of incorporation or the statutes mention an authorised capital, unless any increase in the capital subscribed necessitates an amendment of the statutes;    the accounting documents for each financial year that are required to be published in accordance with Directive 2013/34/EU on the annual and consolidated financial statements and related reports of undertakings;    any change of the registered office of the company;    the winding-up of the company;    any declaration of nullity of the company by the courts;    the appointment of liquidators, their particulars, and their respective powers, unless such powers are expressly and exclusively derived from law or from the statutes of the company;    any termination of a liquidation and, in Member States where striking off the register entails legal consequences, the fact of any such striking off. In each Member State, a file shall be opened in a central, commercial or companies register, for each of the companies registered therein. Member States shall ensure that companies have a unique identifier allowing them to be unequivocally identified in communications between registers through the system of [continua ..]

2.2.2. Disclosure Rules Applicable to Branches of Companies from other Member States and of Companies from Third Countries

As is well known, the opening of a branch, like the creation of a subsidiary, is one of the possibilities currently open to companies in the exercise of the right of establishment in another Member State. To ensure the protection of persons who deal with companies through the intermediary of branches, disclosure measures are required in the Member State in which a branch is located. Documents and particulars relating to a branch opened in a Member State by a company governed by the law of another Member State shall be disclosed pursuant to the law of the Member State of the branch. Where disclosure requirements in respect of the branch differ from those in respect of the company, the branch’s disclosure requirements shall take precedence with regard to transactions carried out by the branch. As discussed above, Member States shall ensure that branches have a unique identifier allowing them to be unequivocally identified in communications between registers through the system of interconnection of registers. The documents and particulars that must be compulsory disclosed by branches are:    the address of the branch; the activities of the branch;    the register in which the company file is kept, together with its registration number in that register;    the name and legal form of the company and the name of the branch, if that is different from the name of the company; the appointment, termination of office and particulars of the persons who are authorised to represent the company in dealings with third parties and in legal proceedings: ○   as a company organ constituted pursuant to law or as members of any such organ; ○   as permanent representatives of the company for the activities of the branch, with an indication of the extent of their powers;    the winding-up of the company, the appointment of liquidators, as well as their particulars and powers, and the termination of the liquidation;    insolvency proceedings, arrangements, compositions, or any analogous proceedings to which the company is subject;    the accounting documents;    the closure of the branch. Where a company has opened more than one branch in a Member State, the compulsory disclosure may be made in the register of the branch of the company’s choice. In this case, compulsory disclosure by the other branches shall cover the particulars of the branch register [continua ..]

2.3. Capital Maintenance and Alteration

As it is well known, legal capital is the sum of assets contributed to a company by shareholders when they are issued shares. This sum is disclosed both in the public register (being part of the instrument of incorporation or of the statutes) and in the annual financial statements. The Directive provides not only capital formation rules, i.e. rules ensuring correct assessment of assets contributed for the formation of the legal capital, but also capital maintenance rules. Union provisions are necessary for maintaining the capital, which constitutes a security for creditors, in particular by prohibiting any reduction thereof by distribution to shareholders where the latter are not entitled to it, and by imposing limits on the right of public limited liability companies to acquire their own shares.

2.3.1. Capital Requirements

The laws of the Member States shall require that, in order for a company to be incorporated or obtain authorisation to commence business, a minimum capital shall be subscribed, the amount of which shall be not less than EUR 25,000. Subscribed capital may be formed only by assets capable of economic assessment. However, an undertaking to perform work or supply services may not form part of those assets. Shares may not be issued at a price lower than their nominal value, or, where there is no nominal value, their accountable par. However, Member States may allow those who undertake to place shares in the exercise of their profession to pay less than the total price of the shares for which they subscribe in the course of this transaction. Shares issued for consideration shall be paid up at the time the company is incorporated or is authorised to commence business in an amount equal to not less than 25% of their nominal value or, in the absence of a nominal value, their accountable par. The remaining part of consideration is paid upon request of the administrative or management body. However, where shares are issued for consideration other than in cash at the time the company is incorporated or is authorised to commence business, the consideration shall be transferred in full within five years of that time.

2.3.2. Safeguards for Statutory Capital

Subject to the provisions relating to the reduction of subscribed capital, shareholders may not be released from the obligation to pay up their contributions. Furthermore, in case of contributions other than in cash, e.g. either credits or contributions in kind, the value of these contributions must be assessed. In particular, in order to ensure for the protection of creditors and other shareholders that contributions other than in cash are not overvalued, an expert report shall be drawn up before the company is incorporated or is authorised to commence business, by one or more independent experts appointed or approved by an administrative or judicial authority. Such experts may be natural persons, legal persons, companies or firms under the laws of each Member State. The expert report shall contain at least: a description of each of the assets comprising the consideration; the methods of valuation used and whether the values resulting from the application of those methods correspond at least to the number and nominal value or, where there is no nominal value, to the accountable par and, where appropriate, to the premium on the shares to be issued for them. The expert report shall be published in the manner set forth by the laws of each Member State, in accordance with the rules concerning the disclosure in the commercial register. Member States may decide to not apply the provision relating to the expert report where 90% of the nominal value, or where there is no nominal value, of the accountable par, of all the shares is issued to one or more companies for a consideration other than in cash, and where the following requirements are met: with regard to the company in receipt of such consideration, the natural or legal persons or companies or firms by which or in whose name the statutes or the instrument of incorporation, or where the company was not formed at the same time, the drafts of those documents, were signed, have agreed to dispense with the expert report; such agreement has been published; the companies furnishing such consideration have reserves that may not be distributed under the law or the statutes and which are at least equal to the nominal value or, where there is no nominal value, the accountable par of the shares issued for consideration other than in cash; the companies furnishing such consideration guarantee, up to an amount equal to that indicated in previous point, the debts of the recipient company arising between [continua ..]

2.3.3. Rules on Distribution

First of all, it is appropriate to clarify that the term “distribution” includes the payment of dividends and of interest relating to shares. As a general rule, except for cases of reductions of subscribed capital, no distribution to shareholders may be made when on the closing date of the last financial year the net assets as set out in the company’s annual accounts are or, following such a distribution, would become, lower than the amount of the subscribed capital plus those reserves that may not be distributed under the law or the statutes of the company. Where the non-paid up part of the subscribed capital is not included in the assets shown in the balance sheet, that amount shall be deducted from the amount of subscribed capital. The amount of a distribution to shareholders may not exceed the amount of the profits at the end of the last financial year plus any profits brought forward and sums drawn from reserves available for this purpose, less any losses brought forward and sums placed to reserve in accordance with the law or the company statutes. Any distribution made contrary to general rules shall be returned by shareholders who have received it if the company proves that those shareholders knew of the irregularity of the distributions made to them, or could not in view of the circumstances have been unaware of it. Under the Directive, the laws of a Member State may allow the payment of interim dividends, which is a dividend payment made before a company’s general meeting to approve final financial statements. When the laws of a Member State allow interim dividends, at least the following conditions shall apply: interim accounts shall be drawn up showing that the funds available for distribution are sufficient; the amount to be distributed may not exceed the total profits made since the end of the last financial year for which the annual accounts have been drawn up, plus any profits brought forward and sums drawn from reserves available for this purpose, less losses brought forward and sums to be placed to reserve pursuant to the requirements of the law or the statutes.

2.3.4. Rules on Companies’ Acquisitions of its own Shares

Generally speaking, the shares of a company may not be subscribed by the company itself. The restrictions on a public limited liability company’s acquisition of its own shares apply not only to acquisitions made by a company itself, but also to those made by any person acting in their own name but on the company’s behalf. In order to prevent a public limited liability company from using another company in which it holds a majority of the voting rights or on which it can exercise a dominant influence to make such acquisitions without complying with the relevant restrictions, the arrangements governing a company’s acquisition of its own shares should cover the most important and most frequent cases of the acquisition of shares by such other companies. In particular, if the shares of a company have been subscribed by a person acting in his or her own name, but on behalf of the company, the subscriber shall be deemed to have subscribed for them for his or her own account. The persons or companies or firms by which or in whose name the statutes or the instrument of incorporation or, in cases of an increase in subscribed capital, the members of the administrative or management body, shall be liable to pay for shares that are subscribed in contravention of this rule. However, the laws of a Member State may provide that any such person may be released from his or her obligation if they prove that no fault is attributable to them personally. That said, without prejudice to the principle of equal treatment of all shareholders who are in the same position, and to Regulation 596/2014/EU on market abuse, Member States may permit other transactions that involve the acquisition of the company’s own shares. Where such transactions are permitted, conditions ensuring the protection of creditors must be met. In particular, to the extent that the acquisitions are permitted, Member States shall make such acquisitions subject to the following conditions: authorisation is given by the general meeting, which shall determine the terms and conditions of such acquisitions, and, particularly, the maximum number of shares to be acquired, the duration of the period for which the authorisation is given, the maximum length of which shall be determined by national law without, however, exceeding five years, and, in the case of acquisition for value, the maximum and minimum consideration; the acquisitions, including of shares previously acquired by the [continua ..]

2.3.5. Rules for the Increase of Legal Capital

It is necessary that the Member States’ laws relating to the increase of legal capital ensure that the principles of equal treatment of shareholders in the same position are observed and harmonised. Within this context, any increase in capital shall be decided upon by the general meeting. Both that decision and the increase in the subscribed capital shall be published in the manner set forth by the laws of each Member State, in accordance with the provisions concerning the commercial register. Nevertheless, the statutes or instrument of incorporation or the general meeting may authorise an increase in the subscribed capital up to a maximum amount, which shall be fixed with due regard for any maximum amount provided for by law. Where appropriate, the increase in the subscribed capital shall be decided within the limits of the amount fixed by the company body empowered to do so. The power of such body in this respect shall be for a maximum period of five years and may be renewed one or more times by the general meeting, each time for a period not exceeding five years. Where there are several classes of shares, the decision by the general meeting concerning the increase in capital or the authorisation to increase the capital shall be subject to a separate vote at least for each class of shareholder whose rights are affected by the transaction. This provision shall apply to the issue of all securities that are convertible into shares or which carry the right to subscribe for shares, but not to the conversion of such securities, nor to the exercise of the right to subscribe. Shares issued for consideration in the course of an increase in subscribed capital, shall be paid up to at least 25% of their nominal value or, in the absence of a nominal value, of their accountable par. Where provision is made for an issue premium, it shall be paid in full. Where shares are issued for consideration other than in cash in the course of an increase in the subscribed capital, the consideration shall be transferred in full within a period of five years from the decision to increase the subscribed capital. This consideration shall be the subject of a report drawn up before the increase in capital is made by one or more experts – natural persons, legal persons, companies or firms under the laws of each Member State – that are independent of the company and appointed or approved by an administrative or judicial authority. Member States may decide not to [continua ..]

2.3.6. Rules for the Reduction of Legal Capital

Firstly, it is appropriate to clarify that it is necessary that the Member States’ laws relating to the reduction of legal capital ensure that the principles of equal treatment of shareholders in the same position and of protection of creditors with claims that exist prior to the decision on reduction are observed and harmonised. On these grounds, any reduction in the subscribed capital, except by a court order, shall be subject to, at least, a decision of the general meeting taken at least by a majority of not less than two thirds of the votes attaching to the securities or the subscribed capital represented. Such decision shall be published in the manner set forth by the laws of each Member State, in accordance with the provisions concerning the disclosure in the commercial register. The notice convening the meeting shall specify at least the purpose of the reduction and the way in which it is to be carried out. In case of several classes of shares, the decision by the general meeting concerning a reduction in the subscribed capital shall be subject to a separate vote, at least for each class of shareholders whose rights are affected by the transaction. The subscribed capital may not be reduced to an amount less than the minimum capital. However, Member States may permit such a reduction if they also provide that the decision to reduce the subscribed capital may take effect only when the subscribed capital is increased to an amount at least equal to the prescribed minimum. In order to enhance standardised creditor protection in all Member States, in the event of a reduction in the subscribed capital, at least the creditors with claims that predate the publication of the decision on the reduction shall have the right to obtain security for claims that have not fallen due by the date of that publication. Member States are bound by certain guidelines, specifically that Member States: may not set aside such a right unless the creditor has adequate safeguards, or unless such safeguards are not necessary having regard to the assets of the company; shall lay down the conditions for the exercise of this right; shall ensure that the creditors are authorised to apply to the appropriate administrative or judicial authority for adequate safeguards provided that they can credibly demonstrate that due to the reduction in the subscribed capital the satisfaction of their claims is at stake, and that no adequate safeguards have been obtained from the [continua ..]

2.3.7. Serious Loss of the Subscribed Legal Capital

Member States shall not define a loss that is deemed to be serious as a figure that is higher than half the subscribed capital. The Directive requires that, in the case of a serious loss of the subscribed capital, a general meeting of shareholders is called within the period set forth by the laws of the Member States, to consider whether the company should be wound up or any other measures taken. Appropriate measures include: a change in the purpose of the company; the pursuit of new financial resources, including a capital increase; the dissolution of the company. In addition, the general meeting may also consider that the remaining net assets are sufficient means to pursue the purpose of the company. Accordingly, shareholders might decide to reduce the legal capital to offset losses incurred. A capital reduction to offset losses incurred is permitted, unless the new subscribed capital would be less than the minimum required by the Directive.

3. Mergers and Divisions of Limited Liability Companies

3.1. Mergers of Public Limited Liability Companies 3.1.1. General Provisions on Mergers Member States shall, as regards companies governed by their national laws, provide rules governing mergers by the acquisition of one or more companies by another company and merger by the formation of a new company. For this purpose, the Directive sets forth the following definitions: “merger by acquisition” shall mean the operation whereby one or more companies are wound up without going into liquidation and transfer to another all their assets and liabilities in exchange for the issue to the shareholders of the company or companies being acquired of shares in the acquiring company and a cash payment, if any, not exceeding 10% of the nominal value of the shares so issued or, where they have no nominal value, of their accounting par value. A Member State’s laws may provide that merger by acquisition may also be affected where one or more of the companies being acquired is in liquidation, provided that this option is restricted to companies which have not yet begun to distribute their assets to their shareholders. “merger by the formation of a new company” shall mean the operation whereby several companies are wound up without going into liquidation and transfer to a company that they set up all their assets and liabilities in exchange for the issue to their shareholders of shares in the new company and a cash payment, if any, not exceeding 10% of the nominal value of the shares so issued or, where they have no nominal value, of their accounting par value. A Member State’s laws may provide that merger by the formation of a new company may also be affected where one or more of the companies that cease to exist is in liquidation, provided that this option is restricted to companies that have not yet begun to distribute assets to their shareholders. On these grounds, as a starting point, it is appropriate to clarify that the protection of the interests of members and third parties requires that the laws of the Member States relating to mergers of public limited liability companies be coordinated, and that provision for mergers be made in the laws of all the Member States. Within the context of such coordination, it is particularly important that the shareholders of merging companies be kept adequately informed in as objective a manner as possible, and that their rights be suitably protected. However, there is no reason to [continua ..]

3.1.2. The Merger Process

A merger by acquisition involves three steps: drafting the terms of merger; decision by the general meetings of the companies to be merged; the deed of merger. A merger by formation of a new company involves the same process. For this purpose, “merging companies” and “company being acquired” shall mean the companies that will cease to exist, and ‘acquiring company’ shall mean the new company. In this case, the draft terms of merger and, if they are contained in a separate document, the memorandum or draft memorandum of association and the articles or draft articles of association of the new company shall be approved at a general meeting of each of the companies that will cease to exist. As regards the first step, the Directive requires that the administrative or management bodies of each of the merging companies draw up draft terms of merger in writing. Draft terms of merger shall specify at least: the type, name and registered office of each of the merging companies; the share exchange ratio and the amount of any cash payment; the terms relating to the allotment of shares in the acquiring company; the date from which the holding of such shares entitles the holders to participate in profits and any special conditions affecting that entitlement; the date from which the transactions of the company being acquired shall be treated for accounting purposes as being those of the acquiring company; the rights conferred by the acquiring company on the holders of shares to which special rights are attached and the holders of securities other than shares, or the measures proposed concerning them; any special advantage granted to the experts that examine the draft terms and to the members of the merging companies’ administrative, management, supervisory or controlling bodies. The disclosure requirements for the protection of the interests of members and third parties should include mergers so that third parties are kept adequately informed. In particular, draft terms of merger shall be published in the manner prescribed by the laws of the Member States in accordance with the provisions concerning the disclosure in the commercial register, for each of the merging companies, at least one month before the date fixed for the general meeting that is to decide thereon. Any of the merging companies shall be exempt from the publication requirement if, for a continuous period beginning at least one month before [continua ..]

3.1.3. Consequences of the Merger and Conditions for Nullity

The laws of the Member States shall determine the date on which a merger takes effect. As regards publication formalities, a merger shall be publicised in the manner prescribed by the laws of each Member State, in accordance with the rules concerning the disclosure in the commercial register, in respect of each of the merging companies. The acquiring company may itself carry out the publication formalities relating to the company or companies being acquired. A merger shall have the following consequences ipso jure and simultaneously: the transfer, both as between the company being acquired and the acquiring company and, as regards third parties, to the acquiring company of all the assets and liabilities of the company being acquired; the shareholders of the company being acquired become shareholders of the acquiring company; the company being acquired ceases to exist. No shares in the acquiring company shall be exchanged for shares in the company being acquired held either: by the acquiring company itself or through a person acting in his own name but on its behalf; or by the company being acquired itself or through a person acting in his own name but on its behalf. The foregoing shall not affect the laws of Member States that require the completion of special formalities for the transfer of certain assets, rights and obligations by the acquired company to be effective as against third parties. The acquiring company may carry out such formalities itself; however, the laws of the Member States may permit the company being acquired to continue to carry out such formalities for a limited period, which may not, save in exceptional cases, be fixed at more than six months from the date on which the merger takes effect. The laws of the Member States shall, as a minimum, lay down rules governing civil liability towards the shareholders of the company being acquired, of: the members of the administrative or management bodies of that company in respect of misconduct on the part of members of those bodies in preparing and implementing the merger; the experts responsible for drawing up on behalf of that company the report on the examination of the draft terms of merger, in respect of misconduct on the part of those experts in the performance of their duties. In order to ensure certainty in the law as regards relations between the companies concerned, between those companies and third parties, and between the members, it is necessary to [continua ..]

3.1.4. Acquisition of One Company by Another that Holds 90% or More of its Shares

Member States shall make provision, in respect of companies governed by their laws, for the operation whereby one or more companies are wound up without going into liquidation and transfer all their assets and liabilities to another company, which is the holder of all their shares and other securities conferring the right to vote at general meetings. Such operations shall be regulated by the provisions regulating mergers by acquisition. However, Member States shall not impose – inter alia – the following requirements:    the specification in the draft terms of: ○   the share exchange ratio and the amount of any cash payment; ○   the terms relating to the allotment of shares in the acquiring company; ○   the date from which the holding of such shares entitles the holders to participate in profits and any special conditions affecting that entitlement; the administrative or management bodies’ report; the expert report;    civil liability of members of the administrative or management bodies of the company being acquired;    civil liability of the experts responsible for drawing up the expert report on behalf of the company being acquired. Member States shall not apply the rules requiring approval by the general meeting if the following conditions are fulfilled:    the publication of the draft terms is affected, as regards each company involved in the operation, at least one month before the operation takes effect;    at least one month before the operation takes effect, all shareholders of the acquiring company are entitled to inspect the following documents at the company’s registered office: ○   the draft terms; ○   the annual accounts and annual reports of the merging companies for the preceding three financial years; ○   where applicable, an accounting statement drawn up on a date that shall not be earlier than the first day of the third month preceding the date of the draft terms of merger, if the latest annual accounts relate to a financial year which ended more than six months before that date; one or more shareholders of the acquiring company holding a minimum percentage of the subscribed capital is entitled to require that a general meeting of the acquiring company be called to decide whether to approve the merger; this minimum percentage may not be [continua ..]

3.1.5. Other Operations Treated as Mergers

The safeguards afforded to members and third parties in connection with mergers of public limited liability companies should cover certain legal practices that, in some important respects, are similar to a merger, so that the obligation to provide such protection cannot be evaded. In particular, where in cases of merger by acquisition or merger by formation of a new company, the laws of a Member State permit the cash payment to exceed 10%, the rules concerning mergers by acquisition and mergers by the formation of new companies shall apply. In addition, where the laws of a Member State permit a merger by acquisition, a merger by formation of a new company or a transfer of all assets and liabilities by one or more companies to another company that is the holder of all their shares without all of the transferring companies thereby ceasing to exist, the rules concerning mergers by acquisition, mergers by the formation of new companies and acquisition of one company by another which holds 90% or more of its shares shall apply as appropriate.

3.2. Cross-border Mergers of Limited Liability Companies

3.2.1. General Provisions on Cross-border Mergers As already mentioned, the Directive also aims to facilitate cross-border merger operations, which are a matter of utmost importance for the realization of the right of primary establishment set forth by Article 49, second subparagraph TFEU. In particular, the Directive sets out the rules applicable to mergers of limited liability companies formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union, provided at least two of them are governed by the laws of different Member States. The laws of the Member States should allow the cross-border merger of a limited liability company of one Member State with a limited liability company from another Member State if the national laws of the relevant Member States permit mergers between such types of company. For this purpose, “merger” means an operation whereby: one or more companies, on being dissolved without going into liquidation, transfer all their assets and liabilities to another existing company, the acquiring company, in exchange for the issue to their members of securities or shares representing the capital of that other company and, if applicable, a cash payment not exceeding 10% of the nominal value, or, in the absence of a nominal value, of the accounting par value of those securities or shares; or two or more companies, on being dissolved without going into liquidation, transfer all their assets and liabilities to a company that they form, the new company, in exchange for the issue to their members of securities or shares representing the capital of that new company and, if applicable, a cash payment not exceeding 10% of the nominal value, or in the absence of a nominal value, of the accounting par value of those securities or shares; or a company, on being dissolved without going into liquidation, transfers all its assets and liabilities to the company holding all the securities or shares representing its capital. On these grounds, it should be specified that each company taking part in a cross-border merger, and each third party concerned, remains subject to the provisions and formalities of the national law that would be applicable in the case of a national merger. None of the provisions and formalities of national law should introduce restrictions on freedom of establishment or on the free movement of capital, save where [continua ..]

3.2.2. The Cross-border Merger Process

A cross-border merger shall follow the process set forth by the Directive for mergers of public limited liability companies. First of all, the common draft terms of a cross-border merger should be drawn up for each of the companies concerned in the various Member States. The common draft terms must therefore specify the minimum necessary content, while leaving the companies free to agree on other terms. In order to protect the interests of members and others, the common draft terms of the cross-border merger shall be published in the manner prescribed by the laws of each Member State for each of the merging companies at least one month before the date of the general meeting that will decide thereon. Not less than one month before the date of the general meeting, the report prepared by the management or administrative organ of each of the merging companies shall be made available to the members and to the representatives of the employees or, where there are no such representatives, to the employees themselves. The report is intended to explain and justify the legal and economic aspects of the cross-border merger and to explain the implications of the cross-border merger for members, creditors and employees. Where the management or administrative organ of any of the merging companies receives, in good time, an opinion from the representatives of their employees, as provided for under national law, that opinion shall be appended to the report. In addition, the laws of all the Member States should provide for the drawing-up at a national level of a report on the common draft terms of the cross-border merger by one or more experts on behalf of each of the companies that are merging. In order to limit the costs of experts connected with cross-border mergers, provision should be made for the possibility of drawing up a single report intended for all members of companies taking part in a cross-border merger operation. Depending on the law of each Member State, such experts may be natural persons or legal persons. In particular, an independent expert report intended for members and made available not less than one month before the date of the general meeting shall be drawn up for each merging company. As an alternative to experts operating on behalf of each of the merging companies, one or more independent experts, appointed for that purpose at the joint request of the companies by a judicial or administrative authority in the Member State of one of the [continua ..]

3.2.3. Consequences of the Cross-border Merger

The date on which the cross-border merger takes effect shall occur after the scrutiny of the legality of the operation has been completed. The date shall be determined by the law of the Member State that will have jurisdiction over the company resulting from the cross-border merger. In the interests of legal certainty, after the date on which a cross-border merger takes effect, it should no longer be possible to declare the merger null and void. The laws of each of the Member States with jurisdiction over the merging companies shall determine, with respect to the territory of that State, the arrangements for publicising the completion of the cross-border merger in the public register in which each of the companies is required to file documents. The registry for the registration of the company resulting from the cross-border merger shall notify, through the system of interconnection of registers (discussed above) and without delay, the registry in which each of the companies was required to file documents that the cross-border merger has taken effect. Deletion of the old registration, if applicable, shall be affected on receipt of that notification, and not before. A cross-border merger whereby one or more companies transfer all their assets and liabilities to another existing company or a company transfers all its assets and liabilities to the company holding all the securities or shares representing its capital shall, from the date on which the operation takes effect, have the following consequences: all the assets and liabilities of the company being acquired shall be transferred to the acquiring company; the members of the company being acquired shall become members of the acquiring company; the company being acquired shall cease to exist. A cross-border merger whereby two or more companies transfer all their assets and liabilities to a company that they form shall, from the date on which the operation takes effect, have the following consequences: all the assets and liabilities of the merging companies shall be transferred to the new company; the members of the merging companies shall become members of the new company; the merging companies shall cease to exist. Where, in the case of a cross-border merger of companies, the laws of the Member States require the completion of special formalities before the transfer of certain assets, rights and obligations by the merging companies becomes effective against third parties, those [continua ..]

3.3. Divisions of Public Limited Liability Companies

3.3.1. Division by Acquisition According to the Directive, the term “division by acquisition” shall mean the operation whereby, after being wound up without going into liquidation, a company transfers to more than one company all its assets and liabilities in exchange for the allocation to the shareholders of the company being divided of shares in the companies receiving contributions as a result of the division (hereinafter referred to as “recipient companies”) and possibly a cash payment not exceeding 10% of the nominal value of the shares allocated or, where they have no nominal value, of their accounting par value. A Member State’s laws may provide that division operation may also be affected where one or more of the companies being acquired is in liquidation, provided that this option is restricted to companies that have not yet begun to distribute their assets to their shareholders. Similarly to the provisions concerning mergers, the rules set out by the Directive for divisions cover protection for shareholders, creditors and employees. The protection of the interests of members and third parties requires that the laws of the Member States relating to divisions of public limited liability companies be coordinated where Member States permit such operations. In the context of such coordination, it is particularly important that the shareholders of the companies involved in a division be kept adequately informed in as objective a manner as possible, and that their rights be suitably protected. Creditors, including debenture holders, and persons having other claims on the companies involved in a division of public limited liability companies, should be protected so that the division does not adversely affect their interests. As regards the process of division, firstly, the administrative or management bodies of the companies involved in such operation shall draw up draft terms of division in writing. Draft terms of division shall specify, at a minimum: the type, name and registered office of each of the companies involved in the division; the share exchange ratio and the amount of any cash payment; the terms relating to the allotment of shares in the recipient companies; the date from which the holding of such shares entitles the holders to participate in profits and any special conditions affecting that entitlement; the date from which the transactions of the company being divided shall be treated for [continua ..]

3.3.2. Consequences of the Division and Conditions for Nullity

The laws of Member States shall determine the date on which a division takes effect. As regards publication formalities, a division shall be published in the manner prescribed by the laws of each Member State in accordance with the provisions concerning disclosure in the commercial register, in respect of each of the companies involved in a division. Any recipient company may itself carry out the publication formalities relating to the company being divided. A division shall have the following consequences ipso jure and simultaneously: the transfer, both as between the company being divided and the recipient companies and as regards third parties, to each of the recipient companies of all the assets and liabilities of the company being divided, where such transfer shall take effect with the assets and liabilities being divided in accordance with the allocation set forth in the draft terms of division; the shareholders of the company being divided become shareholders of one or more of the recipient companies in accordance with the allocation set forth in the draft terms of division; the company being divided ceases to exist. No shares in a recipient company shall be exchanged for shares held in the company being divided either: by that recipient company itself or by a person acting in their own name but on its behalf; or by the company being divided itself or by a person acting in their own name but on its behalf. The foregoing shall not affect the laws of Member States that require the completion of special formalities for the transfer of certain assets, rights and obligations by a company being divided to be effective as against third parties. The recipient company or companies to which such assets, rights or obligations are transferred in accordance with the draft terms of division may carry out those formalities themselves; however, the laws of Member States may permit a company being divided to continue to carry out those formalities for a limited period that may not, save in exceptional circumstances, be fixed at more than six months from the date on which the division takes effect. The laws of Member States shall at least lay down rules governing the civil liability of members of the administrative or management bodies of a company being divided towards the shareholders of that company in respect of misconduct on the part of members of those bodies in preparing and implementing the division, as well as the civil liability of the [continua ..]

3.3.3. Division by the Formation of New Companies

For the purposes of the Directive, “division by the formation of new companies” means the operation whereby, after being wound up without going into liquidation, a company transfers to more than one newly-formed companies all its assets and liabilities in exchange for the allocation to the shareholders of the company being divided of shares in the recipient companies, and possibly a cash payment not exceeding 10% of the nominal value of the shares allocated or, where they have no nominal value, of their accounting par value. A Member State’s laws may provide that division by the formation of a new company may also be affected where one or more of the companies that cease to exist is in liquidation, provided that this option is restricted to companies that have not yet begun to distribute their assets to their shareholders. Rules on divisions by acquisition shall apply to division by the formation of new companies. In this case, the term “companies involved in a division” shall refer to the company being divided and the term “recipient companies” shall refer to each of the new companies. The draft terms of division shall indicate the form, name and registered office of each of the new companies. The draft terms of division and, if they are contained in a separate document, the memorandum or draft memorandum of association and the articles or draft articles of association of each of the new companies shall be approved at a general meeting of the company being divided. Member States shall not impose the requirements concerning the written reports drawn up by the administration or management bodies and by one or more experts where the shares in each of the new companies are allocated to the shareholders of the company being divided in proportion to their rights in the capital of that company.

3.3.4. Division under the Supervision of a Judicial Authority

Within the context of division operations subject to the supervision of a judicial authority, this authority has the power:    to call a general meeting of the shareholders of the company being divided in order to decide upon the division;    to ensure that the shareholders of each of the companies involved in a division have received or can at least obtain the documents concerning the division in time to examine them before the date of the general meeting of their company that has been called to decide upon the division, whereby when a Member State makes use of the derogation from the requirement of approval by the general meeting of a recipient company, the period shall be long enough for the shareholders of the recipient companies to be able to exercise the following rights: ○   at least one month before the date fixed for the general meeting of the company being divided that is to decide on the draft terms of division, all shareholders of each recipient company are entitled to inspect the documents concerning the division at the registered office of that company; ○   one or more shareholders of any recipient company holding a minimum percentage of the subscribed capital is entitled to require that a general meeting of such recipient company be called to decide whether to approve the division; such minimum percentage may not be fixed at more than 5%, however, Member States may provide for the exclusion of non-voting shares from this calculation;    to call any meeting of creditors of each of the companies involved in a division in order to decide upon the division;    to ensure that the creditors of each of the companies involved in a division have received or can obtain at least the draft terms of division in time to examine them before the date referred in the minutes of the general meeting;    to approve the draft terms of division. Simplified formalities are set where the judicial authority establishes that the conditions referred to in the previous points have been fulfilled and that no prejudice would be caused to shareholders or creditors.

3.3.5. Other Operations Treated as Divisions