openPR Logo
Press release

ECJ: The cross-border transformation of a company must be treated like a domestic transformation

10-10-2012 11:38 AM CET | Politics, Law & Society

Press release from: bunk-alliance Rechtsanwaltsgesellschaft mbH

ECJ: The cross-border transformation of a company must be

By judgment of the 12.07.2012 (Case No. C-378/10), the European Court of Justice held that if a member state provides for the possibility of a transformation of a domestic company, such a possibility must also be granted to companies founded in other member states.
The decision is based on the following facts: A company founded in the year 2000 in Italy and registered with the commercial register of Rome (VALE Costruzioni Srl) applied for this deregistration because it intended to transfer its seat and its activities to Hungary and cease its Italian business. The company was deregistered from the Italian commercial register as applied and the following note was registered: “ the company has transferred its seat to Hungary.”

Thereafter the managing director of VALE Costruzioni Srl and a further private individual founded a limited liability company under Hungarian law. (VALE Építési kft). In the subsequent application for registration in the Hungarian commercial register, the company VALE Costruzioni Srl was given as legal predecessor of VALE Építési kft. However the application was rejected by the registry court by reasoning that a company founded and registered in Italy could not transfer its company seat to Hungary and could not be registered as the legal predecessor of a Hungarian company in the Hungarian commercial register. The matter came to the attention of the Hungarian supreme court (Legfelsbb Bíróság), which addressed the ECJ with the question, whether Hungarian law that allows Hungarian companies transformation, could prohibit companies from other member states the transformation into Hungarian companies with respect to the principle of freedom of settlement (the transformation lies within the change of the registered office and the applicable national law).

The ECJ came to the conclusion that within the context of a cross-border transformation of a company, the host member state establishes the relevant legislation and may apply its national law with respect to domestic transformations that rule the foundation and the functioning of a company. However the national law of the host member state cannot completely disregard the freedom of settlement, so that a provision that prohibits companies from other member states the transformation, but on the other side allows domestic companies the transformation, is to be examined in the light of the principle of the freedom of settlement.

The ECJ ruled that the Hungarian provision established a different treatment of companies depending on whether the transformation refers to a company which already has a seat in Hungary and therefore a domestic transformation or cross-border transformation of companies.

Since such a form of discrimination of companies with seat in different member states can deter the companies from exercising their freedom of settlement, this forms an unjustified restriction of the freedom of settlement.

The law firm was established in 2003 by Dr. Artur Bunk, an Attorney-at-Law. Qualified in 1995, he was admitted to the Frankfurt Bar in 1997 after obtaining an LL.D. in European Law at the University Viadrina in Frankfurt (Oder). During his career he has worked with the German law firm Pünder, Volhard, Weber & Axster (now Clifford Chance), was Head of Office at Rödl & Partner in Poland, and Senior Legal Counsel at the Legal and Restructuring Department of KfW. In addition to German, he also speaks fluent English and Polish.

Our offices are based around 45 minutes from Frankfurt/Main International Airport in and approx. the same distance from Frankfurt City.

Thanks to the professional experience and background of our Principal and our Attorneys we are in a position to meet the highest requirements and expectations of international clients, which forms an integral part of our business philosophy, enabled us to establish a profound know-how base on international matters unmatched by law offices of comparable size and background. With our network of external consultants (auditors, tax advisors), we are well equipped to perform advisory services usually only found in much larger law offices. Our comparatively low overheads and flexibility enable us to provide our services on a competitive basis.
bunk-alliance has established a close cooperation with law offices in Italy, India, Poland, Slovakia, with auditors and tax advisory offices in Germany and Poland and various governmental agencies.

Office Worms
Goethestr. 15
67547 Worms

Phone: +49 6241 97249 0
Fax: +49 6241 97249 11

This release was published on openPR.

Permanent link to this press release:

Please set a link in the press area of your homepage to this press release on openPR. openPR disclaims liability for any content contained in this release.

You can edit or delete your press release ECJ: The cross-border transformation of a company must be treated like a domestic transformation here

News-ID: 238224 • Views:

More Releases for Hungarian

Hungarian National Police to Deliver Briefing at the 12th Annual Border Security …
With Hungary facing the follow border security challenges: Irregular migration, Illegal migration and the difference among those, Rising border traffic, New trends and emerging risks in border surveillance. Hungarian organisations are cooperating in international border security research and innovation and the following four projects (ROBORDER, iBorderCtrl, SMILE and BBA 2.4.2) are addressing these important issues at hand. With this is mind, SMi Group are delighted to announce that the Hungarian
WELTEC BIOPOWER: Hungarian Partner INWATECH Installs Spherical Gas Storage Tank
In the future, the storage of energy in the form of biogas will play an increasingly important role around the globe. WELTEC BIOPOWER has implemented a trend-setting, innovative solution with the Hungarian partner INWATECH. Where an investment for a biogas processing system with biogas feed-in station is not feasible, the intermediate storage of raw biogas is a smart alternative. The example of the 1-MW plant of WELTEC BIOPOWER, which has been
Hungarian construction market to recover in 2013-2014
After a poor 2009-2012 for the Hungarian construction industry, from 2013 a visible market recovery is expected. The growth in 2013-2014 will result from the intense execution of EU co-financed infrastructure investments as well as some revival in building construction, particularly in non-residential buildings. According to the research company PMR’s latest report, entitled “Construction sector in Hungary 2012 – Development forecasts for 2012-2014”, weak macroeconomic environment, falling investment demand and poor
IQS Launches Hungarian Version Of Its Quality Management Software
February 2, 2011 - Cleveland, Ohio – IQS, a leader of enterprise compliance and quality management software is proud to announce the launch of its Hungarian version. IQS’ long history in developing automotive quality management systems enables manufacturers to optimize their business around the industry’s quality processes and standards such as ISO/TS 16949, APQP, PPAP and FMEA. Based on recent success implementing the IQS Software in Hungary, it has
Hungarian mobile broadband subscriptions grew ten folds in the last three years
Hungary, one of the key mobile markets in Central Europe, is experiencing a steady growth in the adoption of mobile broadband services offered by the three national operators Pannon, T-Mobile, and Vodafone. In fact, the number of subscribers to these services has reached 972,000 in March 2010 according to the National Telecommunications regulatory Agency latest report. As the figure below features it, the mobile broadband subscriptions that were just 85,000 in
Hungarian ‘Village House’ opts technology from the Tyrol
1,500 m2 of large collectors from solar specialists TiSUN were installed during the refurbishment of Hungary’s biggest municipal housing block The apartment building is situated on a main road in Budapest. Since its completion in 1970, huge billboards on the roof have created interest in this block of municipal housing, which is known in Hungary as the ‘Village House’ because of the living area of 43,500 m2. The energy efficiency of all