The European Union (Cross-Border Conversions, Mergers and Divisions) Regulations 2023 (SI No 233 of 2023) were signed into law on 24 May 2023 and came into operation on that day with some exceptions.
The regulations, which transpose EU Directive 2019/2121, are largely technical in nature, amending existing rules for cross-border mergers and introducing harmonised rules for cross-border conversions and divisions. The regulations provide for companies to restructure within the Internal Market, for the use of digital tools, and offer effective protection for stakeholders including employees, creditors, and minority shareholders.
- A cross-border conversion is where a company (without being dissolved, wound up or going into liquidation) converts the legal form under which it is registered in its existing Member States (MS) into a legal form of another MS by operation of law. Following conversion, the assets, liabilities and members of the converting company become those of the converted company.
- A cross-border mergeris where one or more companies from two or more MS, transfer their assets and liabilities to an existing or a newly formed company.
- A cross-border divisionis where a company divides into two or more companies across several MS. In a full division, the company being divided ceases to exist and its' assets and liabilities are transferred to two or more recipient companies. In a partial division, part of the assets and liabilities of the company being divided are transferred to one or more recipient companies and the company being divided remains in existence.