Company Law Proposals Adopted by EU Parliament

Commission proposals published in April 2018 on reforming and digitalising EU company law in order to make it easier for companies to merge, divide or move within the EU Single Market, whilst preventing fraud and abusive behaviour in cross-border operations, have been adopted by the EU Parliament, with 522 votes in favour, 54 opposed and 16 abstentions.

The rules allow companies to register, set up new branches or file documents online. As concerns cross-border conversions, mergers and divisions, the EU rules for cross-border conversions and divisions aim to update existing ones to facilitate reorganisation, provided that the operations are genuine. Companies will be required to inform employees on the legal and economic consequences of a cross-border operation, and to comply with safeguards concerning the prevention of cross-border operations which have abusive, criminal or fraudulent aims.

The new rules must now be voted by the EU Council before being published in the EU Official Journal and will enter into force 20 days thereafter.

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