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Sundsvall, November 5, 2009 . Practical experiences in cross border operations registration - Yves Gonner Managing director - Trade and Companies Register Luxembourg. Outline. Trans border operations with existing EU legislative framework European company (SE) - Transfer of seat

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Practical experiences in cross border operations registration-Yves GonnerManaging director- Trade and Companies Register Luxembourg


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Outline registration

  • Trans border operations with existing EU legislative framework

    • European company (SE) - Transfer of seat

    • Cross border mergers

  • Trans border operations without existing EU legislative framework

    • Transfer of registered company seats

    • Cross border mergers involving non EU countries

  • ECRF working group


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European Company (SE) registration

  • Overview : 2005-2009 filings concerning SEs

    • 24 registrations

      • 15 conversions of existing public limited–liability companies into SEs

      • 8 incoming SE’s through transfer of seat

    • 10 deletions – transfer of seat (outgoing)

      • 14 active SE’s registered as of to date


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European Company (SE) - Transfer of seat – Problems arising (1/2 )

  • Notification

    • No standard formulation of the notification

    • Translation problems - Notifications received in different languages

  • Identification problems - Risks of errors

    • Identifying the correspondent register

      • Correct name of register – local national name or official translation ?

      • Postal address, name of correspondent, … of the register that has to be notified

      • Requires sometimes ‘research’ on the internet

    • Identifying the SE

      • Change of company name when entering jurisdiction – notification has to mention the new name and the old name

      • Unique identifier number is not available

    • Manual work – difficult or costly to automate under current circumstances as procedures are not standardized


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European Company (SE) - Transfer of seat – Problems arising (2/2)

  • Article 14 of the Council Regulation (EC) N° 2157/2001 of 8 October 2001 on the Statute for a European company (SE):

    • Publication of a notice of the transfer of seat of the SE in the Official Journal of the European Communities (OJEC) within one month of the publication in the Member state

      • Who has to publish : The register of the new registration or the register of the old registration or both ?

  • The Register of the old registration has to wait for the notification of the new register before deleting the SE from its register

    • Problem arises if the new register does not notify within one month

    • The publication deadline in the OJCE may not be honoured by the Register of the old registration


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Suggestions arising (2/2)

  • Registers could agree on an informal basis on a standardized notification (text message)

  • Registers could agree on a standardized procedure for transmission of notifications between registers

  • Introduction of a common numbering system for companies - Unique Identifier Number

  • Centralized directory of Registers with all required information for notification process


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Trans border mergers arising (2/2)- Practical aspects

  • 29 trans border mergers handled in 2009

    • 21 mergers by way of absorption of a foreign company by a Luxembourg registered company

  • Notification procedure

    • No standard for notification

    • Language and translation problems

    • Discussions concerning the formulation of the notification

  • Transmission procedure

    • Who do we have to notify ?

    • Delays in receiving notifications form other Registers

      • Problems for deleting the company off the Register

      • Not always easy to obtain information from other Registers

    • Manual work – under current circumstances not easy and costly to automate


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Trans border mergers arising (2/2)- Practical aspects

  • Cross border mergers involving non EU countries

    • No notification procedure exists


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Transfer of registered company seats (1/3) arising (2/2)

  • ECRF 2009 Annual Survey :

    • 12 ECRF member countries accept the principle of the transfer of seat to any other jurisdiction

    • 4 other jurisdictions accept the principle of transfer of seat to specific jurisdictions

    • 9 ECRF member countries do not accept the transfer of seat

    • 11 members wait for communication from the register of the new registration before deleting the company from their own register

  • Problems experienced

    • Company deleted from the outgoing Register before company was registered with the incoming Register – company finds itself in a kind of ‘no man’s land’ status

    • Incoming Register asking for certificates that outgoing Register is not able to provide


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Transfer of registered company seats (2/3) arising (2/2)

  • No EU regulatory framework at present

    • (draft proposal of a 14th EU directive)

  • No precise list of jurisdictions which allow the transfer of seats to another jurisdiction

  • No precise list of the formalities that each register requires from another register when a company wants to transfer its seat between their two respective jurisdictions

  • Communication between registers is not structured or even not existing at all, left at the discretion of each jurisdiction


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Transfer of registered company seats (3/3) arising (2/2)- Suggestions

  • Possible collaboration of registers on an informal basis

  • Identify countries that accept transfers of seats

  • Agree on a standardized transfer notification among registers - informal basis

  • Establish a standardized notification procedure similar to the one that could be applied to trans border merger operations or the SPE

    • (cf. Proposal for a Council Regulation on the Statute for a European private company – Annex III – Notification form concerning the registration of the transfer of the registered office)


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Example – Annex III of a Proposal for a Council Regulation SPE - Transfer of registered office - Notification form


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European Commerce Registers Forum (ECRF) working group

  • ECRF members decided in June 2009 to create a working group that should make proposals on facilitating communication between registers in trans border operations

    • The terms of reference of this working group has been suggested as follows:

    • Define the areas in trans border operations that include a communication between Registries,

    • Review the provisions and different situations that require a communication between Registers as foreseen by European company law, i.e. S.E., trans border mergers

    • Review the situations where a communication between Registers could be an advantage but that are not regulated by European company law (i.e. trans border transfer of seats)

    • Elaborate a set of common agreed communication principles.


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European Commerce Registers Forum (ECRF) working group

  • Objective

    • Work out simple and practical recommendations in order to improve trans border communication between registers (i.e. standardized notification,…)

    • Implementation on an informal and voluntary basis among Registers

  • Discussions could involve CRF (Corporate Registers Forum) members

    • Cross border mergers or transfer of registered company seats involving non EU / ECRF members