Cross-Border Conversion of Companies in the EU: The Impact of the VALE Judgement
18 Pages Posted: 10 Jan 2013
Date Written: January 9, 2013
The VALE judgement of the Court of Justice of the European Union has made it clear that the right to cross-border conversions is protected by the freedom of establishment, and should therefore be facilitated by the Member States. In addition, the Court introduced the principles of equivalence and effectiveness in the area of EU company law, thereby giving some guidelines about how the procedures for cross-border conversions should be enacted in the two Member States involved. However, a close examination reveals that these principles, although helpful in some ways, are also very open to interpretation and many questions are still left unanswered. The two main issues are 1) that the rules governing domestic conversion are not always suitable for cross-border conversions and 2) that there is likely to be a lack of coordination of the rules in the different Member States which will cause problems for a successful conversion. Especially to overcome the later problem a revival of the work on a 14th Company Law Directive would prove helpful.
Keywords: Cross-border conversion of companies, CJ VALE Judgment Case C-378/10, free movement, freedom of establishment
JEL Classification: K22
Suggested Citation: Suggested Citation