Opinion of the Advocate General — ECLI:EU:C:2011:841
Date: 2011-12-15
Language of the case: Hungarian
Subject matter: Right of establishment
Procedure: Reference for a preliminary ruling
Origin: Hungary

Summary of the Judgment 1. Preliminary rulings — Jurisdiction of the Court — Limits — General or hypothetical questions — Questions relating to the refusal, of a Member State, to add a company originating in another Member State to its commercial register — Admissibility (Art. 267 TFEU) 2. Freedom of movement for persons — Freedom of establishment — Provisions of the Treaty — Scope — Cross-border conversion of a company — National legislation which permits only national companies to convert, but not those governed by the law of another Member State — Included (Arts 49 TFEU and 54 TFEU) 3. Freedom of movement for persons — Freedom of establishment — National legislation preventing, in a general manner, a company governed by the law of another Member State from converting to a company governed by national law — Restriction of the freedom of establishment — Justification — None (Arts 49 TFEU and 54 TFEU) 4. Freedom of movement for persons — Freedom of establishment — Cross-border conversion of a company — Application, by the host Member State, of the national legislation on domestic conversions which governs the incorporation and functioning of companies — Lawfulness — Conditions — Compliance with the principles of effectiveness and equivalence (Arts 49 TFEU and 54 TFEU) 1. See the text of the decision. (see paras 18, 19) 2. A company resulting from a cross-border conversion is necessarily governed solely by the national law of the host Member State, which determines the connecting factor required and the rules governing its incorporation and functioning. Thus, the expression ‘to the extent that it is permitted under that law to do so’, in paragraph 112 of the judgment of 16 December 2008 in Case C‑210/06 Cartesio, cannot be understood as seeking to remove, from the outset, the legislation of the host Member State on company conversions from the scope of the provisions of the TFEU governing the freedom of establishment, but as reflecting the mere consideration that a company established in accordance with national law exists only on the basis of the national legislation which ‘permits’ the incorporation of the company, provided the conditions laid down to that effect are satisfied. Therefore, national legislation which enables national companies to convert, but does not allow companies governed by the law of another Member State to do so, falls within the scope of Articles 49 TFEU and 54 TFEU. (see paras 30-33) 3. Articles 49 TFEU and 54 TFEU must be interpreted as precluding national legislation which enables companies established under national law to convert, but does not allow, in a general manner, companies governed by the law of another Member State to convert to companies governed by national law by incorporating such a company. First, differences in treatment depending on whether a domestic or cross-border conversion is at issue cannot be justified by the absence of rules laid down in secondary EU law. Second, overriding reasons in the public interest, such as protection of the interests of creditors, minority shareholders and employees, the preservation of the effectiveness of fiscal supervision and the fairness of commercial transactions, may justify a measure restricting the freedom of establishment on the condition that such a restrictive measure is appropriate for ensuring the attainment of the objectives pursued and does not go beyond what is necessary to attain them. None the less, such justification is lacking where the national legislation concerned does not allow, in a general manner, cross-border conversions, thereby preventing such transactions from being carried out, even if the interests listed above are not jeopardised. In any event, such a rule goes beyond what is necessary to protect those interests (see paras 38, 39-41, operative part 1) 4. Articles 49 TFEU and 54 TFEU must be interpreted, in the context of cross-border company conversions, as meaning that the host Member State is entitled to determine the national law applicable to such operations and thus to apply the provisions of its national law on the conversion of national companies governing the incorporation and functioning of companies, such as the requirements relating to the drawing-up of lists of assets and liabilities and property inventories. However, the principles of equivalence and effectiveness, respectively, preclude the host Member State from: - refusing, in relation to cross-border conversions, to record the company which has applied to convert as the ‘predecessor in law’, if such a record is made of the predecessor company in the commercial register for domestic conversions, and - refusing to take due account, when examining a company’s application for registration, of documents obtained from the authorities of the Member State of origin. (see para. 62, operative part 2)