The legislative package on company law, which was to have been presented by the European Commission on Wednesday 29 November, has finally been postponed until early 2018. According to our information, this postponement aims to allow the 'Polbud' judgment of the Court of Justice of the European Union (CJEU) on the transfer of company headquarters, which was returned on 25 October of this year, to be taken into account.
Readers may recall that the future package aims to establish a more modern and reliable legal framework for European businesses. Aside from the proposals to facilitate cross-border trade and promote the digitisation of companies, the package also contains a proposed directive on the transfer of company headquarters.
This is an ambitious project, as the adoption of a 14th directive on company law concerning the transfer of company headquarters (or registered office) of a company has been added to and then taken back off the European agenda many times over the last 20 years. At the moment, this process, which allows a company to settle in a different EU country without losing its legal personality, comes under different national laws and principles established by the Court of Justice, protecting the freedom of establishment.
In the 'Polbud' case, the Court was asked the following question: by virtue of the principle of freedom of establishment, can a company transfer just its registered office to a different member state, without moving its actual headquarters?
In its judgment (case C-106/16), the Court stated that the freedom of establishment allows a company to transfer its registered office alone from one member state to another and to transform itself into a company under the law of that state, as long as the company meets the criteria for setting up a company in that state (see EUROPE 11891). The Luxembourg judges also observed that legislation requiring the prior liquidation of a company wishing to transfer its headquarters to a different member state constitutes a restriction on the freedom of establishment.
When asked by EUROPE, Pierre-Henri Conac, a member of the Commission's expert group on company law, explained that “this postponement will allow the Commission to clarify its proposed directive in line with the liberal spirit of the 'Polbud' judgment”. He added that it is an “excellent decision” that is fully in line with the Commission's proposal.
At a time when a sharp increase has been observed in the EU in favour of restricting the freedom of establishment, the Commission is responding to countless calls from the Court of Justice to legislate in the area, whilst setting the necessary protections in place, he added. (Original version in French by Marion Fontana)