Positioned as a pivotal milestone in European legislative evolution, Law 5055/2023 meticulously addresses the challenges of cross-border corporate activities in the EU. This legislation aims to reshape the way capital companies operate, ensuring efficiency in procedures and bolstered security for both the companies and their associated stakeholders.
Law 5055/2023, as illustrated in Article 1, sets forth a clear goal: to break down the barriers preventing the seamless establishment of capital companies within the EU’s internal market. This is achieved through its detailed regulations on cross-border transformations, which not only cover the known domain of cross-border mergers but also newly address cross-border divisions and conversions. While aiming to streamline operations, the legislation firmly stands by the protection of various stakeholders, ensuring the interests of workers, creditors, shareholders, and partners remain at the forefront.
A significant feature of Article 2 is its emphasis on the logical organization of company transformation law, both within national borders and across them. By doing so, the law integrates the provisions of pre-existing regulatory frameworks into Law 4601/2019, rendering Law 3777/2009 obsolete in the process.
Law 4601/2019 isn’t just a standalone national initiative; It closely aligns with the EU’s overall vision. This alignment is particularly evident with Directive (EU) 2019/2121, which the European Parliament and the Council introduced in November 2019. This directive sought to amend Directive (EU) 2017/1132 by placing a keen focus on cross-border conversions, mergers, and divisions.
The prior legislative framework had its limitations, catering only to specific types of cross-border transformations. Such a limited scope naturally gave rise to uncertainties regarding the legality of other, unlisted cross-border transformations. These ambiguities seemed even more pronounced when set against the backdrop of jurisprudential precedents set by revered institutions like the CJEU and ECJ.
The core essence of this legislative progression can be traced to the meticulous integration of new provisions addressing cross-border corporate transformations within the European Union (EU) ambit, all housed within the framework of Law 4601/2019.
Delving deeper into the specifics, Part B of the law has been enriched with the addition of Chapter IA, which provides a detailed exploration into the mechanics and regulations governing cross-border mergers of capital companies. In a similar vein, Part C has been broadened by the introduction of Chapter IB, which lays out the intricacies associated with cross-border divisions of such companies. Not to be left behind, Part D marks a significant milestone with the inclusion of Chapter Z, dedicated to elucidating the nuances and guiding principles surrounding cross-border conversions of capital entities. This restructuring not only aims to streamline corporate operations across borders but also ensures a cohesive and comprehensive approach to the evolving dynamics of cross-border corporate activities.
Nikos Axiotis, Attorney at Law –LL.M