Cross Border Movement of Companies: The New Eu Rules on Cross Border Coversion

Abstract

Cross-border companies' mobility is issue which has been gaining public attention in Europe since the end of the 1980's. Although it is clear, from the wording of the articles 49 and 54 of the TFEU, that companies should benefit from a freedom of establishment, in practice, the scope of this freedom is quite unclear. Companies wishing to move abroad are usually facing insurmountable obstacles which are still, more than 30 years after the famous Daily Mail case, very present. The recent EU legislative activity may finally bring this problem to an end. In April 2018 the European Commission proposed new rules on cross-border mobility. By enacting the Proposal of the Directive on cross-border conversions, mergers and divisions European Commission introduced important novelties to the cross-border mobility with an aim to simplify procedures, bring legal certainty and create such a legal environment which will enable companies to operate easily on the Single Market. In this paper authors will analyse only the rules of the Proposal that apply to cross-border conversions of companies. The new Proposal on cross-border conversions seem to be an adequate tool for companies that wish to convert abroad. However, the process of conversion is far from being simple. It is a very specific, multi-layered process which involves different stakeholders and authorities and requires their coordinated action. Authors will provide for a critical overview of the proposed legal solutions with special respect to the recent ECJ decision in Polbud case, in which the ECJ reaffirm the right of companies to cross-border conversion.

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“…43 Additionally the need for trial and error in the contracting and partnership agreements lead to a stronger and more educated plans of action in the future. 44 But it is exactly that philosophy that would encourage legal practitioners to push potential partnership seekers towards complete disclosure and understanding on potential hazards that may arise in the future. As stated above fiduciary duties such as loyalty and care cannot be fully eliminated but may be regulated by agreement, especially in limited partnerships.…”

“…Some sample partnership agreements already include a Duty of Loyalty clause. 35 It is also noted that agreements can specify acts that the partners agree will violate a fiduciary duty and the key remains simply whether the partner, in the pursuit of their non-partnership endeavours, discloses to other partners the actions or conduct. But leaving too much discretion up to the -good conduct‖ or -faith based‖ 36 approach of the partners is problematic and best practices of attorneys should be to create for clients and more sturdy partnership agreement that constitutes potential duty of loyalty breaches.…”

“…As noted above, RUPA 37 does indicate that partners cannot -eliminate the duty of loyalty, although the partners may identify specific types or categories of activities that do not violate the duty, if not manifestly unreasonable‖. It is the second part 38 of that statement, regarding the identification of types or categories of activities that attorneys in their counselling of clients and the drafting of partnership agreements need to take a strong review of in modern partnership formation and performance. This again, is due to the nature of the modern trend of partners being involved in a multitude of enterprises.…”

“…Database issued on November 2, 2014. interest that exist in the issuer pays model, alternative payment models were proposed for consideration as stated in the following 37 This model may solve problems of free rider, conflict of interest, and competition. 38 Considering their limited number, CRAs may act as a whole and still favour issuers over investors in issuing ratings; May lead to more -homogenised‖. 39 The debt ratings debate has highlighted that the role of CRAs going forward is far from certain.…”

“…39 The debt ratings debate has highlighted that the role of CRAs going forward is far from certain. Despite all of the outcry over the problems plaguing CRAs, clear 35 Garcia Alcubilla & Ruiz Del Pozo (2012) at 251. 36 European Commission (2010).…”