The European Commission has published a consultation (in the form of an online questionnaire) to assess the functioning of the existing EU legal framework for cross-border operations of companies and any potential need for changes in the current rules. The questions focus not only on the improvement of the existing framework for cross-border mergers but also a possible framework for cross-border divisions of companies.
When the EC reviewed the application of the Cross-Border Merger Directive it identified a number of difficulties related to its implementation and functioning in practice. In particular, the procedural rules were identified as being a source of uncertainty and complexity, especially those relating to the protection of creditors and minority shareholders and the valuation of assets.
As regards divisions, although the relevant rules have been harmonised at national level for a number of years, there is no EU level framework for cross-border divisions. Companies wishing to undertake a cross-border division, therefore, have to perform several operations, such as a national division and a cross-border merger, or the creation of a subsidiary and a subsequent transfer of assets.
In 2012, the EC published a consultation on the future of European company law (see our March 2012 newsletter article) which considered some of these issues. The outcome of that consultation showed that the majority of stakeholders would be interested in further harmonisation in the field of cross-border mergers and divisions.
The purpose of the current consultation is, therefore, to gather more in-depth information on the following issues:
- existing barriers in cross-border operations,
- the changes that are needed to the existing legal framework, and
- costs that could be saved thanks to action at EU level.
Responses to the consultation will be will be taken into account in assessing the need for EU action in this field. Responses should be submitted by completing the questionnaire online no later than 1 December 2014. To access the online questionnaire, click here.