Opinion of the Advocate General — ECLI:EU:C:2023:796
Date: 2023-10-19
Language of the case: Italian
Subject matter: Right of establishment;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Italy

Anonymised version 
Translation C-276/22 – 1 
Case C-276/22 
Request for a preliminary ruling 
Date lodged:  
22 April 2022 
Referring court:  
Corte suprema di cassazione (Supreme Court of Cassation, Italy) 
Date of the decision to refer:  
11 April 2022 
Appellant:  
Edil Work 2 S.r.l. 
S.T. S.r.l. 
Cross-appellant:  
STE S.a.r.l. 
  
[…] 
THE CORTE SUPREMA DI CASSAZIONE (SUPREME COURT OF 
CASSATION) 
SECONDA SEZIONE CIVILE (SECOND CIVIL DIVISION) 
[…] [Composition of the court] 
makes the following 
INTERLOCUTORY ORDER 
in the appeal […] brought by; 
EDIL WORK 2 SRL […], and S.T. SRL […]; 
EN 
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- appellants - 
v 
STE SARL […]; 
- cross-appellant - 
v 
CM; 
- respondent - 
against judgment No 8288/2018 of the CORTE D’APPELLO di ROMA (ROME 
COURT OF APPEAL, Italy), […]; 
[…] [standard wording] 
Relevant facts and subject matter of the main proceedings 
1 In 2004 the limited liability company (società a responsabilità limitata (s.r.l.)) 
Agricola Torcrescenza, having assets and business activities consisting solely of 
the property complex known as Castello di Tor Crescenza in Rome, changed its 
company name to STA s.r.l. and transferred its registered office to the Grand 
Duchy of Luxembourg, where it changed its name to STE s.a.r.l. 
2 An extraordinary meeting of shareholders of the company was held in 
Luxembourg in 2010, at which S.B. was appointed sole director (gérante). On that 
occasion, S.B. appointed F.F., a person unrelated to the company, as its general 
agent and granted that individual the power to perform ‘in the Grand Duchy of 
Luxembourg and abroad, in the name and on behalf of the company, all necessary 
acts and operations, without exception or exclusion, but in all cases within the 
scope of the company’s object’. 
3 In 2012 the agent F.F. transferred the Castello di Tor Crescenza to the Italian 
company ST s.r.l., which first, by a preliminary contract, undertook to sell it to 
M.M. and then transferred it to the Italian company Edil Work 2 s.r.l. 
4 In 2013 STE s.a.r.l. brought legal proceedings against the companies ST s.r.l. and 
Edil Work 2 s.r.l. before the Tribunale di Roma (Rome District Court, Italy), 
requesting that the two deeds of transfer be declared null and void on the ground 
that the conferment of powers on F.F. by the director of the plaintiff company had 
no legal force. The Rome District Court, which did not take a position on the 
applicable law, rejected the request, holding that F.F.’s powers as agent had been 
validly conferred. 
5 The Rome Court of Appeal, ruling in second instance, upheld the request. The 
Court of Appeal first stated that Italian law applied, in that under Article 25 of the 
EDIL WORK 2 AND S.T. 
 
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legge di diritto internazionale privato (legge 218/1995) (the Law on Private 
International Law, Law No 218/1995) Italian law would apply if the company’s 
‘principal object is located’ in Italy. In the case of STE s.a.r.l. it is undeniable that 
the principal object of the company is located in Italy, as it is represented by the 
Castello di Tor Crescenza complex, ‘the sole and entire asset base’ of the 
company. The Court of Appeal then established that the conferment on a third 
party outside the company, such as F.F., of unlimited powers of management (in 
terms of geographical scope and content) conflicts with Article 2381(2) of the 
Civil Code (which establishes that the powers of a company’s board of directors 
can only be delegated to members of that board). The Court of Appeal therefore 
declared that the conferment of powers on F.F. by the director of the company was 
null and void and, consequently, the two deeds transferring Castello di Tor 
Crescenza to the two defendant companies had no legal force. 
6 Edil Work 2 s.r.l. and ST s.r.l. appealed that decision to this Court, firstly 
disputing whether the second part of the first paragraph of Article 25 of Law 
No 218/1995 was applicable, inasmuch as the appellate court failed to consider 
that the meaning and scope of the provision have been profoundly affected by 
European law, which requires that it be disapplied if its interpretation is 
incompatible with that law. 
7 The opposing party STE s.a.r.l. contested the appeal, highlighting in particular the 
fact that, because the principal object of the company was located in Italy, the 
legal force of the powers conferred on F.F. and the validity of the subsequent 
transfers to the appellant companies should be examined under Italian law, 
without any interpretative interference from EU law. 
The relevant provisions of national law 
8 The relevant national provision is primarily Article 25 of Law No 218/1995 
(Official Gazette of 3 June 1995, No 128). The article, entitled ‘Companies and 
other organisations’, establishes that; 
‘1. Companies, associations, foundations and any other public or private 
organisations, even if not associative in nature, shall be governed by the law of the 
State in whose territory the corresponding incorporation procedure was 
completed. However, Italian law shall apply if the registered office for 
administration is located in Italy, or if the principal object of such organisations is 
located in Italy. 
2. The following, in particular, shall be governed by the law regulating such 
organisations: (a) legal form; (b) trading name or company name; (c) 
incorporation, transformation and dissolution; (d) capacity; (e) formation, powers 
and operating procedures of company bodies; (f) representation of the 
organisation; (g) procedures for acquiring and losing shareholder, associate or 
partner status, and rights and obligations inherent in that status; (h) liability for the 
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obligations of the organisation; and (i) consequences of breaches of the law or 
articles of association. 
3. Transfers of the registered office to another State and mergers of organisations 
with registered offices in different States shall have effect only if they are carried 
out in accordance with the laws of those States.’ 
9 Another relevant national provision is Article 2507 of the Civil Code, which 
begins the chapter devoted to ‘Companies incorporated abroad’, according to 
which ‘the provisions laid down in the chapter shall be interpreted and applied in 
accordance with the principles of the law of the European Communities’. 
The relevant provisions of European Union law: 
10 With regard to Union law, the provisions laying down freedom of establishment 
are relevant, in particular Articles 49 and 54 TFEU. 
11 Article 49 TFEU provides: 
‘1. Within the framework of the provisions set out below, restrictions on the 
freedom of establishment of nationals of a Member State in the territory of 
another Member State shall be prohibited. Such prohibition shall also apply to 
restrictions on the setting-up of agencies, branches or subsidiaries by nationals of 
any Member State established in the territory of any Member State. 
2. Freedom of establishment shall include the right to take up and pursue activities 
as self-employed persons and to set up and manage undertakings, in particular 
companies or firms within the meaning of the second paragraph of Article 54, 
under the conditions laid down for its own nationals by the law of the country 
where such establishment is effected, subject to the provisions of the Chapter 
relating to capital.’ 
12 Article 54 TFEU states: 
‘1. Companies or firms formed in accordance with the law of a Member State 
and having their registered office, central administration or principal place of 
business within the Union shall, for the purposes of this Chapter, be treated in the 
same way as natural persons who are nationals of Member States. 
2. “Companies or firms” means companies or firms constituted under civil or 
commercial law, including cooperative societies, and other legal persons governed 
by public or private law, save for those which are non-profit-making.’ 
The relevant rulings from the Court of Justice of the European Union 
13 There is extensive Court of Justice case-law on the subject of freedom of 
establishment of companies. 
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14 The following are of particular note, in so far as they are relevant to the present 
question referred: 
- the judgment of 27 September 1988, Daily Mail and General Trust (81/87, 
EU:C:1988:456) 
- the judgment of 9 March 1999, Centros (C-212/97, EU:C:1999:126); 
- the judgment of 5 November 2002, Überseering (C-208/00, EU:C:2002:632); 
- the judgment of 30 September 2003, Inspire Art (C-167/01, EU:C:2003:512); 
- the judgment of 13 December 2005, SEVIC Systems (C-411/03, 
EU:C:2005:762); 
- the judgment of 12 September 2006, Cadbury Schweppes (C-196/04, 
EU:C:2006:544); 
- the judgment of 16 December 2008, Cartesio (C-210/06, EU:C:2008:723); 
- the judgment of 29 November 2011, National Grid Indus (C-371/10, 
EU:C:2011:785); 
- the judgment of 12 July 2012, VALE (C-378/10, EU:C:2012:440); 
- the judgment of 25 October 2017, Polbud (C-106/16, EU:C:2017:804). 
15 Among the judgments cited, the Polbud judgment is of particular significance for 
the case at hand. In the case brought before the Court of Justice of the European 
Union, a Polish company – which had decided to transfer only its registered office 
to Luxembourg in order to make Luxembourg law applicable, without losing its 
legal personality – had its request for removal from the commercial register 
refused, on the ground that it had failed to provide documentation on its 
liquidation. The Sąd Najwyższy (Supreme Court, Poland), to which Polbud 
appealed after its request for removal from the commercial register was refused 
twice, first referred a question to the Court of Justice as to whether freedom of 
establishment was applicable to the transfer of the registered office of a company 
incorporated under the law of one Member State to the territory of another 
Member State, with a view to that company being converted to a company under 
the law of that other Member State, when there is no change of location of the real 
head office of that company. 
16 The Court of Justice held that a situation in which a company formed in 
accordance with the legislation of one Member State wants to convert itself into a 
company under the law of another Member State, with due regard to the test 
applied by the second Member State in order to determine the connection of a 
company to its national legal order, falls within the scope of freedom of 
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establishment, even though that company conducts its main, if not entire, business 
in the first Member State (see paragraphs 34, 38 and 44 of the Polbud judgment). 
Brief illustration of the grounds for referral 
17 This case deals with a capital company (a limited liability company) which, 
originally incorporated under Italian law, removed itself from the commercial 
register and, having been transformed into a company under Luxembourg law, 
transferred its registered office to Luxembourg, while maintaining its principal 
place of business in Italy. 
18 The factual and legal context is different from that on which the Polbud judgment 
turns. In the present case, as in the Polbud case, we are dealing with a company 
that has decided to transfer its registered office to Luxembourg, while keeping its 
principal place of business in its Member State of origin. 
19 […] [Aspect not deemed relevant by the referring court] 
20 Italian law permits the conversion of Italian companies into foreign companies: 
Article 25(3) of the Law on Private International Law (paragraph 8 above) in fact 
states that ‘transfers of the registered office to another State and mergers of 
organisations with registered offices in different States shall have effect only if 
they are carried out in accordance with the laws of those States’. The provision, 
therefore, recognises the transfer of the registered office, provided that the transfer 
is valid not only in the jurisdiction of destination, but in all the jurisdictions 
involved. According to Italian case-law, the transfer does not entail a loss of the 
company’s legal personality following removal of the company from the Italian 
commercial register […] [national case-law]. 
21 The question the case raises is that of the law applicable to the company once it 
has transferred its registered office to a Member State of the EU but has 
maintained its principal place of business in its Member State of origin. 
22 Specifically, there is a dispute as to whether the conferment on a third party by the 
company director of powers to manage the company should be examined on the 
basis of the law of the State of establishment, where the current registered office is 
located, or that of the State of origin, where the company’s principal place of 
business has remained. 
23 […] [reference to paragraphs 5 and 8] 
24 The first part of Article 25(1) identifies the place where the process of a 
company’s incorporation was completed as the connecting factor for determining 
the law applicable to that company, thus opting for the criterion of incorporation. 
The second paragraph then specifies the aspects that are to be included within the 
scope of the provision by means of a list (paragraph 8 above) that is considered 
not exhaustive but merely illustrative, with the consequence that all matters 
relating to the creation, characteristics, organisational structure and internal and 
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external operation of the company are subject to the law of the place where it is 
incorporated. 
25 The second part of the first paragraph of Article 25, however, establishes a 
corrective to the criterion of incorporation and extends the Italian law to cover 
companies that, although incorporated in another State, have their ‘registered 
office for administration’ or their ‘principal object’ located in Italy. 
26 The corrective criterion represented by the main object of the company’s activity 
was held to be applicable in the present case by the appellate court, which thus 
examined the conferment of powers on F.F. by the company director under Italian 
company law and its application by case-law. 
27 It should be noted that the powers were conferred on F.F. during an extraordinary 
meeting of shareholders of STE s.a.r.l., which was held in Luxembourg. On the 
basis of those powers, F.F. transferred the property complex constituting the 
company’s principal place of business, this time by means of a process taking 
place in Italy (the transfer was completed in the course of a meeting of 
shareholders of the Italian company S.T. s.r.l.). 
28 The compatibility of the second part of the abovementioned Article 25(1) with the 
freedom of establishment of companies was contested by the appellant companies 
in the case brought before this Court. 
29 The Court believes the following factors should be considered in examining this 
question. 
30 The freedom of establishment has been interpreted by the Court of Justice of the 
European Union (see the judgments cited above in paragraph 14) as encompassing 
the right of a company or firm formed in accordance with the legislation of a 
Member State to convert itself into a company or firm governed by the law of 
another Member State, provided that the conditions laid down by the legislation of 
that other Member State are satisfied and, in particular, that the test adopted by the 
latter Member State to determine the connection of a company or firm with its 
national legal order is satisfied. 
31 In the absence of harmonisation of Union law, defining the connecting factor that 
determines the national law applicable to a company or firm falls, in accordance 
with Article 54 of the TFEU, within the competence of each Member State. 
Article 54 of the TFEU places the connecting factors of the registered office, the 
central administration and the principal place of business of a company or firm on 
an equal footing (see recital 3 of Directive (EU) 2019/2121 of 27 November 2019 
amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers 
and divisions, OJ 2019 L 231). 
32 As clarified in the case-law of the Court of Justice (see the Polbud judgment, 
paragraph 44), therefore, the fact that only the registered office, and not the central 
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administration or principal place of business, is transferred does not as such 
exclude the applicability of the freedom of establishment under Article 49 TFEU. 
33 The question is therefore whether freedom of establishment means that a company 
which has maintained its principal place of business in its State of origin is subject 
to the law of the State of destination not only in terms of its incorporation but also 
in relation to its management, not only internally but also externally, since the 
present relates to the conferment of management powers on a third party outside 
the company, which has had a decisive effect on its activity. 
34 On this point, it should be noted that paragraph 2 of Article 49 TFEU speaks of 
freedom of establishment in relation to setting up and managing undertakings, and 
that recital 2 of the abovementioned Directive (EU) 2019/2121 of 27 November 
2019 states that freedom of establishment means that the right not only to form but 
also to manage such companies or firms must meet the conditions laid down by 
the legislation of the Member State of establishment. Article 1 of Directive (EU) 
2019/2121 refers to conversion into ‘limited liability companies governed by the 
law of another Member State’ (it should be noted that this directive has not yet 
been implemented by the Italian legislature and a bill delegating authority to the 
Government is pending in Parliament). 
35 It should also be borne in mind with regard to Italian law that in 2003, with the 
reform of company law by decreto legislativo 6/2003 (Legislative Decree 
No 6/2003), Article 2507 of the Civil Code was inserted at the beginning of the 
chapter devoted to companies incorporated abroad (paragraph 9 above). 
According to that article, the provisions of the chapter must not only be 
interpreted but also applied on the basis of the principles of Community law. […] 
[references to the relevant doctrine] 
36 To summarise, there are indications in European law that the law of the State of 
destination, applicable to a company that has transferred its registered office to 
that State, dictates the provisions relating to the operation and management of that 
company. However, in the view of the Court, the fact that in the present case we 
are dealing with an act of management by a company that affects the company’s 
activity, which is located in Italy, the State of origin where the company has 
retained its legal personality, leaves room for doubt as to whether the act of 
management in question should be examined in the light of the law and of the 
judicial interpretation of the Italian rather than the Luxembourg legal system. 
37 Despite the fact that the case-law of the Court of Justice on the freedom of 
establishment of companies is now extensive, the Court therefore considers it 
necessary to submit the question of interpretation of the right of establishment of 
companies that has arisen in the present case to the European Court, considering 
in particular that the question has been raised before the Court of Cassation, 
whose decisions are not – other than in exceptional cases – subject to appeal. 
Question referred to the Court of Justice for a preliminary ruling 
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38 In conclusion, it is necessary to ask the Court of Justice for a preliminary ruling, 
under Article 267 of the Treaty on the Functioning of the European Union, on the 
following question: 
‘Do Articles 49 and 54 of the Treaty on the Functioning of the European 
Union preclude a situation where a Member State in which a (limited 
liability) company was originally incorporated applies to that company the 
provisions of national law relating to the operation and management of the 
company where the company, having transferred its registered office and 
reincorporated the company under the laws of the Member State of 
destination, maintains its principal place of business in the Member State of 
origin and the management act in question has a decisive effect on the 
company’s activities?’ 
39 […] 
[…] [standard wording] 
Rome, […] 11 January 2022. 
[…]