Cross-border transfer of a company’s registered office within EU
Pierre-Olivier BROUARD et Ani YAVASHEVA
The Directive (EU) 2019/2121, amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions, was implemented in France by Ordinance dated 24 May 2023 and Decree dated 2 June 2023. Articles L.236-50 to L.236-53, R.236-39 and R.236-40, in particular, were introduced into the French Commercial Code and apply to transfers where the project is filed with the Trade and Companies Registry as from 1 July 2023. The cross-border transfer of a company’s registered office consists in the conversion of a French commercial company (such as joint stock company (société par actions), private company (société anonyme) or limited liability company (société à responsabilité limitée)) into a company of an equivalent legal form governed by the law of another Member State. The decision to convert a company is taken by the shareholders’ general meeting (ruling by a majority of minimum 2/3 and maximum 90% of the voting rights) as from the expiry of the 3-month objection period of the company’s creditors and with the prior consultation of its employees.
The main advantage of the cross-border transfer is that the company keeps its legal personality without dissolution or liquidation. Thus, the company keeps its assets and liabilities, the employment agreements are maintained and the current shareholders continue to be shareholders of the converted company. However, any shareholder that has voted against the conversion of the company is entitled to the buyback of his/her/its shares.
The scrutiny of the legality of the transfer, aims to verify that it is not abusive or fraudulent, is carried-out by the clerk of the commercial court located in the jurisdiction of the registered office within (i) 3 months of the receipt of the transfer decision (with possible extensions for a total of up to 8 months) when France is the departure Member State or (ii) 15 days of the receipt of the documents when France is the destination Member State.
In France the cross-border transfer is effective on the registration date of the transferred company with the Trade and Companies Registry. The registration is then communicated to the registry of the departure Member State through the interconnection system of registers. Therefore, the register in the departure Member State can deregister the concerned company. Depending on the concerned country and the size of the company, the procedure can take between 2 and 5 months.