The Council Agrees on New Rules for EU Company Cross-Border Conversions, Mergers and Divisions


Yesterday the Council agreed on the reform of cross-border conversions, mergers and divisions for EU companies after months of negotiations. The new rules will provide EU companies with safeguards to discourage abuses and protect legitimate interests of workers, minority shareholders and creditors

Among other novelties, the new rules introduce comprehensive procedures for cross-border conversions and divisions and provide for additional rules on cross-border mergers of limited liability companies established in an EU Member State.

The new rules provide:

  • Speeding of procedures by waiving reports for members and employees in the case of a shareholder agreement, or if the company or any of its subsidiaries have no employees.
  • Procedures to check the legality of cross-border operations against the relevant national legislation, with mandatory anti-abuse control procedures
  • New rules on employee participation rights in cross-border conversions, mergers and divisions
  • Rules to encourage the use of digital tools throughout the cross-border operation, by the issuance of pre-operation certificates online, as well as the exchange of information through digitally interconnected business registers.

The Directive will come into force 20 days after its publication in Official Journal and Member State have 36 months to implement the necessary domestic legislation.

The full text of the Directive is available here.

About the author

Daniel Sarmiento

Daniel Sarmiento is Professor of EU Law at University University Complutense of Madrid and Editor in Chief of The EU Law Live Blog.

By Daniel Sarmiento