62016CC0106
OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 4 May 2017 (
1
) (
2
)
Case C‑106/16
Polbud — Wykonawstwo sp. z o.o., in liquidation
(Request for a preliminary rulingfrom the Sąd Najwyższy (Supreme Court, Poland))
(Freedom of establishment — Articles 49 and 54 TFEU — Scope — Cross-border conversion — Transferring a company’s statutory seat to another Member State without transferring its actual seat — Application to remove the company from the commercial register of the Member State of origin — Requirement that the company be wound up and liquidated — Protection of creditors, minority shareholders and employees — Proportionality)
I – Introduction
1.
Does the freedom of establishment preclude provisions of a Member State under which a company incorporated under the law of that State may not be converted into a company governed by the law of another Member State?
2.
That, in essence, is the question which the Court has to answer in this request for a preliminary ruling. It has arisen in a situation in which a Polish private limited liability company wishes to assume the legal form of a company governed by Luxembourg law while at the same time retaining its legal identity. However, the removal of the company from the Polish commercial register, a condition of completion of the aforementioned endeavour, is precluded by the fact that, under the law of that Member State, removal from the commercial register is subject to the requirement that the company must first be liquidated and wound up.
3.
As such, this case gives the Court the opportunity to clarify the scope of the freedom of establishment and to answer a question of fundamental importance. For it falls to be decided whether that fundamental freedom, enjoyed by a company incorporated under the law of a Member State, guarantees for that company not only the freedom to choose the location of its economic activity within the European Union but also, irrespective of that location, the freedom to carry out a cross-border change of its legal form.
4.
The case will thus further supplement the series of well-known judgments given by the Court on the cross-border mobility of companies. (
3
) Indeed, there may be only a few areas of EU law which so stir up the passions of the legal commentariat and have been the subject of such intense scrutiny. To quote Karl Valentin, as one might in the light of the truly enormous number of articles on this subject, ‘it’s all been said before, just not by everyone yet’. (
4
) (
5
)
5.
So it is that it falls again to the Court of Justice to decide.
II – Legal framework
A – EU law
6.
The EU law framework is determined by the freedom of establishment as provided for in Articles 49 and 54 TFEU.
B – National law
7.
Article 270 of the Polish Kodeks spółek handlowych (Companies Code, ‘KSH’) provides:
‘A company shall be wound up:
…
(2)
pursuant to a shareholders’ resolution to wind up the company or to transfer the company’s seat abroad, which shall be confirmed by minutes drawn up by a notary;
…’
8.
Article 272 of the KSH reads:
‘A company shall be wound up, after being liquidated, by being removed from the register.’
9.
Article 288(1) of the KSH states that the company’s closing balance, following its approval by the shareholders’ meeting and on completion of the liquidation procedure, is to be announced at the company’s seat and presented to the registry court together with an application for the company’s removal from the register. The reference date is to be the day prior to the distribution of the assets remaining after the creditors have been satisfied or secured.
10.
Articles 551 to 568 of the KSH govern the conversion of companies. In that connection, Article 562(1) of the KSH provides that the conversion of a company with share capital requires a resolution to that effect by the shareholders’ meeting or general meeting.
11.
Article 17 of the Ustawa z dnia 4 lutego 2011 r. — Prawo prywatne międzynarodowe (Law of 4 February 2011 — Private international law, ‘PIL Law’) reads, in extract, as follows:
‘1.   A legal person shall be subject to the law of the State in which it has its seat.
2.   If, however, the law referred to in paragraph 1 provides for the application of the law of the State under which the legal person was incorporated, the law of that State shall apply.
…’
12.
Article 19 of the PIL Law provides:
‘1.   Upon transfer of its seat to another State, a legal person shall be subject to the law of that State. The legal personality provided for in the provisions of the State where it previously had its seat shall be retained where the law of all of the States concerned so provides. Transfer of a corporate seat within the European Economic Area shall not lead to the loss of legal personality.
2.   A merger of legal persons having their seats in different States shall require the fulfilment of the requirements laid down in the law of those States.’
III – Dispute in the main proceedings and procedure before the Court
13.
Polbud — Wykonawstwo sp. z o.o. (‘Polbud’) is a private limited liability company incorporated under Polish law and established in Łącko. On 30 September 2011, its shareholders passed a resolution to transfer the ‘company’s seat’ to the Grand Duchy of Luxembourg, in accordance with Article 270(2) of the KSH. The place in which it actually carries on its economic activity remained unchanged.
14.
On that basis, on 19 October 2011, Polbud applied to the competent registry court to initiate the liquidation procedure. On 26 October 2011, the initiation of that procedure was entered in the commercial register and a liquidator was appointed.
15.
On 28 May 2013, the meeting of Polbud’s shareholders agreed before a notary in Rambrouch (Luxembourg) to implement the transfer-of-seat resolution passed in September 2011 and to transfer the company’s seat to Luxembourg with effect from that date, without terminating the company’s legal personality or forming a new legal person. The shareholders further resolved, in particular, that the company would take the legal form of a private limited liability company governed by Luxembourg law, that its name would be changed to Consoil Geotechnik SARL (‘Consoil’), and that its articles of incorporation would be redrafted. On that basis, Consoil was entered in the Luxembourg Companies Register on 14 June 2013. (
6
)
16.
Then, on 24 June 2013, Polbud filed an application to be removed from the commercial register with the registry court in Poland. Polbud failed to carry out the instruction given to it by that court that it should prove for the purposes of its application that the company had been wound up and liquidated. It referred instead to the transfer of the company’s seat to Luxembourg and the company’s continued existence under the law of that Member State.
17.
The registry court refused the application by order of 19 September 2013. The appeals lodged against that order at first and second instance were unsuccessful.
18.
By means of an appeal in cassation of 4 June 2014, the company finally brought the matter before the Sąd Najwyższy (Supreme Court, Poland). It claims that, on the day of the transfer of its seat to Luxembourg, it lost its status as a Polish corporation and became a company under Luxembourg law. By that stage, the liquidation procedure had ended and the company should have been removed from the Polish register.
19.
The Sąd Najwyższy has doubts about whether the refusal to remove the company from the commercial register because it had failed to fulfil the conditions attached to such removal under Polish law is contrary to the freedom of establishment guaranteed by EU law. For that reason, on 22 October 2015, it referred the following questions to the Court under Article 267 TFEU:
‘(1)
Do Articles 49 and 54 TFEU preclude the application by a Member State, in which a [private limited liability] company was initially incorporated, of provisions of national law which make removal from the commercial register conditional on the company being wound up after liquidation has been carried out, if the company has been newly established in another Member State pursuant to a shareholders’ decision to continue the legal personality acquired in the State of initial incorporation?
If the answer to that question is in the negative:
(2)
Can Articles 49 and 54 TFEU be interpreted as meaning that the requirement under national law that proceedings for the liquidation of the company be carried out — including the conclusion of current business, recovery of debts, fulfilment of obligations and sale of company assets, satisfaction or securing of creditors, submission of a financial statement on the conduct of those acts, and indication of the person to whom the books and documents are to be entrusted — which precede the winding-up thereof, which occurs on removal from the commercial register, is a measure which is appropriate, necessary and proportionate to a public interest deserving of protection in the form of safeguarding of creditors, minority shareholders, and employees of the migrant company?
(3)
Must Articles 49 and 54 TFEU be interpreted as meaning that restrictions on the freedom of establishment include a situation in which — for the purpose of conversion to a company of another Member State — a company transfers its registered office to that other Member State without changing its principal establishment, which remains in the State of initial incorporation?’
20.
In the procedure before the Court, written observations have been submitted by the Republic of Poland, the Republic of Austria, the Portuguese Republic and the European Commission. With the exception of the Portuguese Republic, those parties attended the hearing on 6 March 2017, along with Polbud and the Federal Republic of Germany.
IV – Legal assessment
21.
The present request for a preliminary ruling concerns Polbud’s plan to change its legal form to that of a private limited liability company governed by Luxembourg law. Since Luxembourg, like all other Member States, requires as a condition of incorporation and continued existence under national law that companies have a statutory seat in national territory, such a plan necessarily entails the transfer of Polbud’s statutory seat. (
7
) Indeed, this appears to have been achieved inasmuch as Consoil was entered in the Luxembourg Companies Register. (
8
)
22.
In accordance with the terminology used by the Court, the foregoing constitutes a cross-border conversion. This refers to the process whereby a company is converted into a company subject to the law of another Member State, the latter company coming into existence in the course of that process. (
9
)
23.
The success of such a conversion depends in principle on the legal systems of both the Member State of origin and the host Member State. Thus, the judgment in VALE (
10
) concerned a situation in which the host Member State provided for the possibility of conversion for domestic companies but did not permit cross-border conversions. The situation in the present case, on the other hand, concerns obstacles on the part of the Member State of origin. Polish law, after all, does not allow Polbud, whose legal personality is to be carried on through Consoil, to be removed from the commercial register without first being liquidated and wound up.
24.
It must now be clarified, in essence, whether the freedom of establishment precludes that arrangement. What sets the situation in this case apart is the fact that, according to the information contained in the request for a preliminary ruling, the cross-border conversion is not accompanied by a change to the centre of the company’s commercial activities. The referring court asks whether, in that context, the freedom of establishment is applicable (third question), whether that freedom has been restricted (first question) and, if so, whether that restriction is justifiable (second question).
A – The third question
25.
The — somewhat ambiguously worded — third question relates to the scope of the freedom of establishment provided for in Articles 49 and 54 TFEU. This question must be considered first. For, if a cross-border conversion such as that planned in the present case is not even caught by the freedom of establishment, the further questions as to restriction and justification will not arise in the first place.
26.
By its question, the referring court wishes to ascertain whether the freedom of establishment applies to an operation whereby a company incorporated under the law of one Member State, with the aim of converting itself into a company in another Member State, transfers its statutory seat to that other Member State without changing its ‘principal establishment’ (that is to say, in the language used by the Court in the judgment in Cartesio, (
11
) its ‘real seat’), which remains in the Member State of origin.
27.
In accordance with the Court’s case-law, company transformation operations are, in principle, amongst those economic activities in respect of which Member States are required to comply with the freedom of establishment. (
12
) This does not mean, however, that such operations are generally caught by the scope of that fundamental freedom. Rather, the conditions laid down in Article 49 TFEU must always be satisfied. Under that provision, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State are to be prohibited, while Article 54 TFEU provides that companies duly incorporated under the law of a Member State are to be treated in the same way as nationals.
28.
It must therefore be examined whether Polbud is to be regarded as a company or firm within the meaning of Article 54 TFEU and can as such rely on the freedom of establishment (see in this regard section 1 below), and whether the planned conversion in the present case entails establishment in another Member State (see in this regard section 2 below).
1. Company or firm within the meaning of Article 54 TFEU
29.
According to case-law, the question whether Article 49 TFEU applies to a company which seeks to rely on the freedom of establishment is, pursuant to Article 54 TFEU, a preliminary matter which can be resolved only by national law. After all, the Member States have the power to define both the connecting factor required of a company if it is to be regarded as incorporated under their national law and as such capable of enjoying the freedom of establishment, and the connecting factor required to maintain that status. (
13
)
30.
In the light of Article 17(1) of the Polish PIL Law, it might seem questionable whether, following the transfer of its statutory seat to Luxembourg, Polbud is still to be regarded as a Polish company and as such capable of relying on the freedom of establishment. For, under that provision, a legal person is subject to the law of the State in which it has its seat. According to the argument put forward by Poland at the hearing, the Polish legislature refrained from defining the concept of ‘seat’. If, however, that term refers to a company’s statutory seat, Polbud could, in consequence, no longer be regarded as a company under Polish law.
31.
This, however, is matter for the referring court to resolve and need not be dealt with here, since that court is not itself in any doubt that Polbud is able to rely on the freedom of establishment.
2. Establishment in another Member State
32.
We must look next at whether the present case involves establishment in another Member State within the meaning of Article 49 TFEU.
33.
It is settled case-law that the concept of establishment is a very broad one, entailing the right to participate, on a stable and continuous basis, in the economic life of another Member State and to profit therefrom. (
14
) To that end, it is necessary to have secured in the host Member State a permanent presence which it is possible to demonstrate on the basis of ascertainable objective factors. (
15
)
34.
In further defining the concept of establishment, the Court has moreover held that that concept involves the actual pursuit of an economic activity through a fixed establishment in that State for an indefinite period. (
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) In its more recent case-law, it has concluded from the foregoing that that concept presupposes actual establishment in the host Member State and the pursuit of genuine economic activity there. (
17
) To date, though, the Court has assessed the criterion of an act of actual establishment only in connection with the existence of a restriction (
18
) or the justification (
19
) of restrictive measures.
35.
However, if establishment is indisputably a condition of application of the freedom of establishment, and if, in settled case-law, the concept of establishment entails actual settlement in the host Member State and the pursuit of genuine economic activity, the freedom of establishment should in consequence apply only to operations which involve actual establishment.
36.
In the light of the broad construction which the Court has placed on the concept of establishment, the mere existence in the host Member State of a level of infrastructure such as to enable an economic activity to be pursued there on a stable and continuous basis qualifies as such. (
20
) According to case-law, moreover, even the intention to effect such establishment is sufficient. (
21
)
37.
So far as the present case is concerned, it appears from the information provided by the referring court that the centre of Polbud’s commercial activities remained in Poland. This does not rule out the possibility that the company will nonetheless pursue in Luxembourg activities which constitute actual establishment within the meaning of case-law, or that it intends to establish itself in this way. If that is the case, the freedom of establishment will apply. (
22
)
38.
If, in contrast, Polbud seeks only to change the company law applicable to it, the freedom of establishment is not relevant. For, although that freedom gives economic operators in the European Union the right to choose the location of their economic activity, it does not give them the right to choose the law applicable to them. Consequently, a cross-border conversion is not caught by the freedom of establishment where it is an end in itself, but only where it is accompanied by actual establishment.
– The judgment in Cartesio
39.
No other conclusion can be drawn in particular from the judgment in Cartesio. (
23
) In that judgment, the Court had held that Member States may refuse to allow companies governed by their law to retain that status where the latter move their seat to another Member State, thereby breaking the connecting factor required under the national law of the Member State of incorporation. (
24
) The Court further held, by way of an obiter dictum, that the situation where the seat of a company is transferred with no change as regards the law which governs that company falls to be distinguished from the situation where a company moves from one Member State to another Member State with an attendant change as regards the national law applicable, and is converted into a form of company which is governed by the law of the Member State to which it has moved. (
25
)
40.
Those findings cannot be taken to mean that the Court regarded cross-border conversions as falling within the scope of the freedom of establishment irrespective of any actual act of establishment. Considered as a whole, its findings suggest rather that it draws a distinction between a transfer of a company’s actual seat that involves no change of the law applicable to that company, on the one hand, and a transfer that involves a change of the law applicable to it, on the other. That conclusion seems compelling not least because the Court’s obiter dictum is to be read in the light of the principal finding that precedes it, and because the judgment in question is, from the point of view of the substance of that case, concerned with the transfer of a company’s ‘real seat’. (
26
)
– The judgments in Centros and Inspire Art
41.
Neither is there any contradiction with the judgments in Centros (
27
) and Inspire Art. (
28
) After all, in so far as Polbud’s plan is, as a company governed by the law of one Member State, to engage in economic activity exclusively in another Member State, it is true that that plan is akin to the state of affairs which, in the aforementioned judgments, the Court ultimately held to be compatible with the freedom of establishment. A distinction must nonetheless be drawn here. In each of those cases, the Court assessed the facts from the point of view of a company which was formed in one Member State but intended to establish itself in another Member State, the State in which its owners were resident. The account given in the request for a preliminary ruling in this case, in contrast, suggests that at issue here is an existing company which would simply like to change its legal clothes.
42.
The fact that, in Luxembourg, a company, in the form of Consoil, was successfully registered as having the object of carrying on Polbud’s legal personality does not support any other conclusion in this regard. So far as Poland is concerned, this makes no material difference. After all, as the Court has held, cross-border conversions of companies presuppose the consecutive application of two national laws. (
29
) Figuratively speaking, although Polbud already has one foot in Luxembourg, it still has the other in Poland.
3. Interim conclusion
43.
The answer to the third question must therefore be that the freedom of establishment provided for in Articles 49 and 54 TFEU applies to an operation whereby a company incorporated under the law of one Member State transfers its statutory seat to another Member State with the aim of converting itself into a company governed by the law of the latter Member State, in so far as that company actually establishes itself in the other Member State, or intends to do so, for the purpose of pursuing genuine economic activity there. This does not detract from the power of the latter Member State to define both the connecting factor required of a company if it is to be regarded as incorporated under its national law, and the connecting factor required to maintain that status.
B – The first question
44.
In the event that Polbud is actually established in Luxembourg, which is a matter for the referring court to assess, we must look next at the first question. That question seeks to ascertain whether there is a restriction of the freedom of establishment where the removal of the company in question from the commercial register of the Member State of origin, as a condition of completion of a cross-border conversion, is made subject to that company’s prior liquidation and winding-up.
45.
It is settled case-law that all measures which prohibit, impede or render less attractive the exercise of the freedom of establishment must be regarded as restrictions on that freedom. (
30
)
46.
According to the information supplied by the referring court, the transfer of a Polish company’s seat within the European Union does not lead to the loss of legal personality, pursuant to Article 19(1) of the PIL Law. Even if the law applicable to the company is changed, the company’s identity as a person in law is maintained. In principle, therefore, Polish law recognises that Polbud’s legal personality may be carried on through Consoil. It is at the same time the case, however, that, pursuant to Article 270(2) in conjunction with Article 272 of the KSH, a resolution to transfer a company’s seat requires that the company be wound up after it has been liquidated.
47.
However, the Polish authorities’ refusal to remove Polbud from the commercial register unless it is first liquidated and wound up impedes the completion of the cross-border conversion. There is therefore a restriction of the freedom of establishment. (
31
)
48.
The answer to the first question must therefore be that, in the case where a company incorporated under the law of one Member State has actually established itself, or intends to establish itself, in another Member State for the purpose of carrying on genuine economic activity there, and converts itself into a company governed by the law of the latter Member State, the application of national legislation under which the removal of that company from the commercial register of the Member State of origin is subject to the condition that that company must first be wound up after having been liquidated restricts the freedom of establishment.
C – The second question
49.
Lastly, therefore, it remains for us to consider the second question. It seeks in essence to ascertain whether the obligation to carry out a liquidation procedure constitutes a proportionate means of protecting the creditors, minority shareholders and employees of a company that performs a cross-border conversion.
50.
According to the account given by the referring court, the liquidation procedure includes, in particular, the conclusion of current business, recovery of debts, fulfilment of obligations and sale of company assets, satisfaction or securing of creditors, submission of a financial statement on the conduct of those acts, and indication of the person to whom the books and documents are to be entrusted. These steps precede the company’s being wound up, which occurs on its removal from the register.
51.
It is settled case-law that, other than in the situations referred to in Articles 51 and 52 TFEU, restrictions of the freedom of establishment are permissible only if they are justified by overriding reasons in the public interest. In that regard, they must be appropriate to attaining the objective which they pursue and not go beyond what is necessary to attain it. (
32
)
52.
I shall now begin by considering Poland’s objection to the effect that the requirement that the company must be liquidated is justified not least on the ground that it serves to combat abusive practices (see in this regard section 1 below). I shall then turn to the interests of creditors, minority shareholders and employees, to which the national court refers in its question (see in this regard section 2 below).
1. Combating abusive practices
53.
Poland takes the view that the conversion at issue here is an artificial arrangement that is not justified on economic grounds. Liquidation of the company, it contends, is an appropriate means of preventing undertakings from circumventing domestic law.
54.
Poland’s argument is superfluous in so far as it is based on the premiss that Polbud’s sole intention is to change the law applicable to the company. After all, as I indicated earlier, this in itself would not fall within the scope of the freedom of establishment. If, however, that freedom is applicable on account of the pursuit of actual economic activity in the host Member State, Poland’s argument cannot be endorsed.
55.
It is common ground that EU law cannot be relied on for fraudulent ends. (
33
) However, the general obligation to carry out a liquidation procedure goes beyond what is necessary to prevent such practices, since it is effectively tantamount to an impermissible general presumption of abuse. (
34
) If, in a particular case, a cross-border conversion were to be inspired by dishonest motives, the Member States would be free to adopt any appropriate measure to prevent or penalise fraud. (
35
)
2. Protection of the interests of creditors, minority shareholders and employees
56.
The interests of creditors, minority shareholders and employees are overriding reasons in the public interest. (
36
) It is by no means apparent, however, that the requirement to carry out a liquidation procedure is an appropriate means of protecting the interests of the aforementioned groups. In fact, cross-border conversions are impeded or prohibited by that requirement even where those interests are not threatened. (
37
)
57.
Such a measure seems, on the contrary, to be almost counterproductive. For, as the referring court states, the liquidation procedure is geared ultimately towards bringing to an end the company’s legal existence. Its effect is thus that the company’s private creditors lose their previous contractual partner, the employment relationships of all employees are terminated and the minority shareholders — like other shareholders — are directed towards the remaining proceeds of the liquidation.
58.
This does not mean for that matter that a Member State may not make cross-border conversions subject to obligations and conditions with a view to protecting public interests. Such measures must, however, respect the principle of proportionality. With that in mind, I shall now consider the respective situations of creditors (see in this regard section (a) below), minority shareholders (see in this regard section (b) below) and employees (see in this regard section (c) below).
(a) Protection of creditors
59.
So far as concerns the protection of creditors, it is only the interests of the company’s existing creditors that may be relevant. After all, as soon as Polbud continues to trade in Poland following its cross-border conversion into the legal form of a Luxembourg company, it will become apparent to potential creditors that the company’s internal and external relations are not governed by Polish law. (
38
)
60.
There is a risk, however, that the interests of existing creditors will be adversely affected by the conversion. In particular, the company might henceforth be subject to less stringent rules in relation to capital protection and liability. That being the case, there could be no objection to the prospect of such creditors being permitted to request appropriate safeguards, provided that they can demonstrate that, on account of the conversion, the satisfaction of their existing claims is at stake. (
39
)
61.
In so far as Poland further submits that the conversion would be deleterious to the situation of creditors from the point of view of procedural law too, in which regard it points out that creditors would have to bring actions against the company before the courts of another Member State, its objection is unconvincing. For if, as the referring court’s findings suggest, the company’s actual seat remains in Poland, it must be assumed that it can still be sued there. (
40
)
(b) Protection of minority shareholders
62.
The change to the law applicable to the company might also be detrimental to the position of any shareholders who unsuccessfully opposed the conversion. For the new law applicable to the company may bring about changes to the rights and obligations of those with a holding in the company. In those circumstances, it would seem to be proportionate to enable the shareholders concerned to terminate their participation in the company in return for a fair price. (
41
)
(c) Protection of employees
63.
With regard, finally, to the protection of the interests of employees, it must be stated at the outset that this factor was not addressed in any greater detail either by the referring court or by the parties to the proceedings. Neither is there anything to indicate that Polbud set out to relocate or cut jobs.
64.
The conversion and associated transfer of the company’s statutory seat could, however, have an impact on certain rights which employees enjoy by virtue of the location of the company’s statutory seat. Uppermost in my mind in this regard is corporate co-determination, that is to say the participation [by workers] in the management of the undertaking. (
42
) The company law to which the undertaking will be subject after the conversion may provide for less extensive rights of co-determination on the part of employees.
65.
From the point of view of its potential effects on employees’ rights, a cross-border conversion is no different in this regard from a cross-border merger. (
43
) The latter were regulated separately by the EU legislature in Directive 2005/56, (
44
) Article 16 of which contains a special provision on the safeguarding of employees’ interests that is geared in essence towards the achievement of a negotiated settlement. In the light of the foregoing, no concerns would be raised if the Member State of origin of a company carrying out a cross-border conversion were to insist on compliance with requirements to that effect.
3. Interim conclusion
66.
All things considered, the answer to the second question must be that the general obligation to carry out a liquidation procedure does not constitute a proportionate means of protecting the creditors, minority shareholders and employees of a company that performs a cross-border conversion.
V – Conclusion
67.
In the light of all the foregoing, I propose that the Court’s answers to the questions referred by the Sąd Najwyższy (Supreme Court, Poland) as follows:
1.
The freedom of establishment provided for in Articles 49 and 54 TFEU applies to an operation whereby a company incorporated under the law of one Member State transfers its statutory seat to another Member State with the aim of converting itself into a company governed by the law of the latter Member State, in so far as that company actually establishes itself in the other Member State, or intends to do so, for the purpose of pursuing genuine economic activity there. This does not detract from the power of the latter Member State to define both the connecting factor required of a company if it is to be regarded as incorporated under its national law, and the connecting factor required to maintain that status.
2.
In the case where a company incorporated under the law of one Member State has actually established itself, or intends to establish itself, in another Member State for the purpose of carrying on genuine economic activity there, and converts itself into a company governed by the law of the latter Member State, the application of national legislation under which the removal of that company from the commercial register of the Member State of origin is subject to the condition that that company must first be wound up after having been liquidated restricts the freedom of establishment.
3.
The general obligation to carry out a liquidation procedure does not constitute a proportionate means of protecting the creditors, minority shareholders and employees of a company that performs a cross-border conversion.
(
1
)	Original language: German.
(
2
)	The wording of paragraphs 19 and 26 of this document have been modified after it was first put online.
(
3
)	Judgments of 27 September 1988, Daily Mail and General Trust (81/87, EU:C:1988:456); of 9 March 1999, Centros (C‑212/97, EU:C:1999:126); of 5 November 2002, Überseering (C‑208/00, EU:C:2002:632); of 30 September 2003, Inspire Art (C‑167/01, EU:C:2003:512); of 13 December 2005, SEVIC Systems (C‑411/03, EU:C:2005:762); of 16 December 2008, Cartesio (C‑210/06, EU:C:2008:723); and of 12 July 2012, VALE (C‑378/10, EU:C:2012:440). At secondary-law level, there is still little detailed legislation in this area. See, however, Directive 2005/56/EC of 26 October 2005 on mergers of limited liability companies (OJ 2005 L 310, p. 1) and Regulation No 2157/2001 of 8 October 2001 on the Statute for a European Company (SE) (OJ 2001 L 294, p. 1).
(
4
)	For example, ignoring double entries, the Court’s case-law database currently lists no fewer than 559 academic publications that deal directly with the leading judgments cited in footnote 2 (see curia.europa.eu).
(
5
)	Bavarian comedian, cabaret performer and author who coined countless well-known sayings (1882-1948).
(
6
)	See the Official Journal of the Grand Duchy of Luxembourg, Recueil des Sociétés et Associations, C — No 1841 of 31 July 2013, pp. 88334 to 88342.
(
7
)	Attempts to regulate cross-border transfers of company seats at secondary-law level, in the form of a Fourteenth Company Law Directive, have thus far been unsuccessful. By its Resolution of 14 June 2012 on the future of European company law (P7_TA(2012)0259), the European Parliament reiterated its request to the Commission that the latter submit a legislative proposal to that effect. In its Communication of 12 December 2012 (‘Action plan: European company law and corporate governance’, COM(2012) 740 final), the Commission recognised the importance of the issue in principle and went on to conduct a consultation procedure (see http://ec.europa.eu/internal_market/consultations/2013/seat-transfer/docs/summary-of-responses_en.pdf). No further action appears to have been taken as yet.
(
8
)	A functionally similar outcome could, at most, be achieved under Directive 2005/56 (cited in footnote 2), in the form of a cross-border merger. On this basis, however, the transferring legal entity would be wound up without retaining its legal identity (see Article 2(2) of the Directive).
(
9
)	See judgment of 12 July 2012, VALE (C‑378/10, EU:C:2012:440, paragraphs 19 and 23).
(
10
)	See judgment of 12 July 2012, VALE (C‑378/10, EU:C:2012:440).
(
11
)	See judgment of 16 December 2008, Cartesio (C‑210/06, EU:C:2008:723, paragraph 47).
(
12
)	Judgments of 12 July 2012, VALE (C‑378/10, EU:C:2012:440, paragraph 24), and of 13 December 2005, SEVIC Systems (C‑411/03, EU:C:2005:762, paragraph 19).
(
13
)	See judgments of 16 December 2008, Cartesio (C‑210/06, EU:C:2008:723, paragraphs 109 and 110); of 29 November 2011, National Grid Indus (C‑371/10, EU:C:2011:785, paragraphs 26 and 27); and of 12 July 2012, VALE (C‑378/10, EU:C:2012:440, paragraphs 28 and 29).
(
14
)	See judgments of 21 June 1974, Reyners (2/74, EU:C:1974:68, paragraph 21); of 30 November 1995, Gebhard (C‑55/94, EU:C:1995:411, paragraph 25); of 14 September 2006, Centro di Musicologia Walter Stauffer (C‑386/04, EU:C:2006:568, paragraph 18); and of 26 October 2010, Schmelz (C‑97/09, EU:C:2010:632, paragraph 37).
(
15
)	See judgments of 14 September 2006, Centro di Musicologia Walter Stauffer (C‑386/04, EU:C:2006:568, paragraph 19), and of 26 October 2010, Schmelz (C‑97/09, EU:C:2010:632, paragraph 38).
(
16
)	Judgments of 25 July 1991, Factortame and Others (C‑221/89, EU:C:1991:320, paragraph 20), and of 4 October 1991, Commission v United Kingdom (C‑246/89, EU:C:1991:375, paragraph 21).
(
17
)	See judgments of 12 September 2006, Cadbury Schweppes and Cadbury Schweppes Overseas (C‑196/04, EU:C:2006:544, paragraph 54); of 12 July 2012, VALE (C‑378/10, EU:C:2012:440, paragraph 34); and of 21 December 2016, AGET Iraklis (C‑201/15, EU:C:2016:972, paragraph 51).
(
18
)	See judgments of 12 July 2012, VALE (C‑378/10, EU:C:2012:440, paragraph 34), and of 21 December 2016, AGET Iraklis (C‑201/15, EU:C:2016:972, paragraph 51).
(
19
)	Judgment of 12 September 2006, Cadbury Schweppes and Cadbury Schweppes Overseas (C‑196/04, EU:C:2006:544, paragraph 54).
(
20
)	See judgment of 11 December 2003, Schnitzer (C‑215/01, EU:C:2003:662, paragraph 32). In particular cases, the renting of premises for business purposes may be sufficient; see the judgments of 18 June 1985, Steinhauser (197/84, EU:C:1985:260, paragraph 16), and of 4 December 1986, Commission v Germany (205/84, EU:C:1986:463, paragraph 21). Mere registration in the host State, on the other hand, is not sufficient; see the judgment of 25 July 1991, Factortame and Others (C‑221/89, EU:C:1991:320, paragraph 21).
(
21
)	See judgment of 12 July 2012, VALE (C‑378/10, EU:C:2012:440, paragraph 35).
(
22
)	I shall take the liberty here of referring to the comments made by Polbud’s counsel at the hearing, to the effect that, contrary to the account given in the request for a preliminary ruling, the company relocated its entire business to Luxembourg and no longer carries on any economic activities in Poland. It is a matter for the referring court, however, to reach a definitive conclusion on this issue.
(
23
)	Judgment of 16 December 2008, Cartesio (C‑210/06, EU:C:2008:723).
(
24
)	Judgment of 16 December 2008, Cartesio (C‑210/06, EU:C:2008:723, paragraph 110).
(
25
)	Judgment of 16 December 2008, Cartesio (C‑210/06, EU:C:2008:723, paragraph 111).
(
26
)	See paragraph 47 of that judgment.
(
27
)	Judgment of 9 March 1999, Centros (C‑212/97, EU:C:1999:126).
(
28
)	Judgment of 30 September 2003, Inspire Art (C‑167/01, EU:C:2003:512).
(
29
)	See judgment of 12 July 2012, VALE (C‑378/10, EU:C:2012:440, paragraph 37).
(
30
)	See judgments of 30 November 1995, Gebhard (C‑55/94, EU:C:1995:411, paragraph 37); 17 October 2002, Payroll and Others (C‑79/01, EU:C:2002:592, paragraph 26); of 5 October 2004, CaixaBank France (C‑442/02, EU:C:2004:586, paragraph 11); of 29 November 2011, National Grid Indus (C‑371/10, EU:C:2011:785, paragraph 36); and of 21 December 2016, AGET Iraklis (C‑201/15, EU:C:2016:972, paragraph 48).
(
31
)	See, to that effect, the judgment of 16 December 2008, Cartesio (C‑210/06, EU:C:2008:723, paragraph 112 et seq.).
(
32
)	See judgments of 30 November 1995, Gebhard (C‑55/94, EU:C:1995:411, paragraph 37); of 15 May 1997, Futura Participations and Singer (C‑250/95, EU:C:1997:239, paragraph 26); of 12 September 2006, Cadbury Schweppes and Cadbury Schweppes Overseas (C‑196/04, EU:C:2006:544, paragraph 47); of 29 November 2011, National Grid Indus (C‑371/10, EU:C:2011:785, paragraph 42); and of 21 December 2016, AGET Iraklis (C‑201/15, EU:C:2016:972, paragraph 61). See also the judgment of 16 December 2008, Cartesio (C‑210/06, EU:C:2008:723, paragraph 113).
(
33
)	See judgments of 12 May 1998, Kefalas and Others (C‑367/96, EU:C:1998:222, paragraph 20); of 23 March 2000, Diamantis (C‑373/97, EU:C:2000:150, paragraph 33); of 21 February 2006, Halifax and Others (C‑255/02, EU:C:2006:121, paragraph 68); of 13 March 2014, SICES and Others (C‑155/13, EU:C:2014:145, paragraph 29); and of 28 July 2016, Kratzer (C‑423/15, EU:C:2016:604, paragraph 37).
(
34
)	See, to that effect, judgments of 4 March 2004, Commission v France (C‑334/02, EU:C:2004:129, paragraph 27); of 9 November 2006, Commission v Belgium (C‑433/04, EU:C:2006:702, paragraph 35); of 28 October 2010, Établissements Rimbaud (C‑72/09, EU:C:2010:645, paragraph 34); and of 5 July 2012, SIAT (C‑318/10, EU:C:2012:415, paragraph 38).
(
35
)	See judgment of 9 March 1999, Centros (C‑212/97, EU:C:1999:126, paragraph 38).
(
36
)	See judgments of 5 November 2002, Überseering (C‑208/00, EU:C:2002:632, paragraph 92); of 13 December 2005, SEVIC Systems (C‑411/03, EU:C:2005:762, paragraph 28); and 12 July 2012, VALE (C‑378/10, EU:C:2012:440, paragraph 39).
(
37
)	See judgments of 13 December 2005, SEVIC Systems (C‑411/03, EU:C:2005:762, paragraph 30), and of 12 July 2012, VALE (C‑378/10, EU:C:2012:440, paragraph 40).
(
38
)	See judgments of 9 March 1999, Centros (C‑212/97, EU:C:1999:126, paragraph 36), and of 30 September 2003, Inspire Art (C‑167/01, EU:C:2003:512, paragraph 135).
(
39
)	See, by analogy, Article 13(2)(2) of Directive 2011/35/EU of the European Parliament and of the Council of 5 April 2011 concerning mergers of public limited liability companies (OJ 2011 L 110, p. 1), as well as judgment of 9 March 1999, Centros (C‑212/97, EU:C:1999:126, paragraph 37).
(
40
)	This is certainly the case under Regulation (EU) No 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (‘Brussels Ia Regulation’; OJ 2012 L 351, p. 1); see Article 4(1) in conjunction with Article 63(1)(b) of that regulation. Furthermore, for the purposes of insolvency law too, Polish courts are to be regarded as having international jurisdiction, since, in the circumstances of the present case, the centre of the company’s main interests within the meaning of Article 3(1) of Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (OJ 2015 L 141, p. 19) is to be found in Poland. See also in this regard judgment of 10 December 2015, Kornhaas (C‑594/14, EU:C:2015:806).
(
41
)	See, to that effect, Article 16(2) of Directive 2004/25/EC of 21 April 2004 on takeover bids (OJ 2004 L 142, p. 12).
(
42
)	In contrast, the location of a company’s statutory seat does not usually have any bearing on the extent of operational co-determination rights, that is to say rights that serve to protect specific interests of the workforce.
(
43
)	See recital 13 of Directive 2005/56 (cited in footnote 2).
(
44
)	Cited in footnote 2.