Source: https://parltrack.org/activities/124693/dossier/2018/0114(COD)
Timestamp: 2020-01-17 18:42:35
Document Index: 419183722

Matched Legal Cases: ['art 3', 'art 3', 'art 3', 'art\n7', 'art 3', 'art 3', 'art 3', 'art 3', 'art 3']

197 Amendments of Pascal DURAND related to 2018/0114(COD)
(2a) The freedom of establishment and the development of the internal market are no stand-alone principles or objectives of the EU. They should always be balanced with, in particular in the context of this Directive, the Union’s principles and objectives regarding social progress, the promotion of a high level of employment and the guarantee of adequate social protection, embedded in Article 3 of the Treaty on the European Union and Article 9 of the TFEU. It is therefore clear that the development of the internal market should contribute to social cohesion and upward social convergence, and should not fuel competition between social systems, putting pressure on those systems to lower their standards.
(2b) EU policy should also contribute to the promotion and reinforcement of social dialogue, in line with article 151 TFEU. It is therefore also the objective of this Directive to secure employees’ information, consultation and participation rights and to ensure that any cross-border mobility of companies can never lead to the lowering of these rights. Ensuring information, consultation and participation of employees is essential for all such actions to succeed.
(2c) The freedom of establishment should also in no way undermine the principles regarding the countering fraud and any other illegal activities affecting the financial interests of the Union included in article 310 of the TFEU.
(3) In the absence of harmonisation of Union law, the definition of 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 to so define. Article 54 of the TFEU places the factor of the registered office, the central administration and the principal place of business of a company or firm at the same degree of connection. Therefore, as clarifiUntil now, the interpretation provided in the case-law,42 of the Court of Justice42 stated that where the Member State of new establishment, namely the destination Member State, requires only the transfer of the registered office as a connecting factor for the existence of a company under its national legislation, the fact that only the registered office (and not the central administration or principal place of business) is transferred does not as such exclude the applicability of the freedom of establishment under Article 49 of the TFEU. The choice of the specific form of company in cross-border mergers, conversions and divisions or the choice of a Member State of establishment are inherent in the exercise of the freedom of establishment guaranteed by the TFEU as part of a Single Market. _________________ 42 Judgment of the Court of Justice of 25 October 2017, Polbud – Wykonawstwo, C- 106/16, ECLI:EU:C:2017:804, paragraph 29.
(4) These developments in the case-law have opened up new opportunities for companies and firms in the Single Market in order to foster economic growth, effective competition and productivity. At the same time, in the absence of a level playing field in the form of coherent social and fiscal rules, these developments went hand-in-hand with the proliferation of letterbox companies and abusive practices, constituting artificial arrangements and circumventing fiscal and social security obligations as well as undercutting workers’ rights. The objective of a Single Market without internal borders for companies must also be reconciled with other objectives of European integration such as social protection (in particularfor all, the protection of workers)' rights, the protection of creditors and the protection of shareholders. Such objectives, i, as well as the fight against attacks on financial interests of the EU via for example money laundering and tax evasion. In the absence of harmonised rules specifically regarding cross-border conversions, are pursued by Member States throughMember States have developed a number of multifarious legal provisions and administrative practices. As a result, whereas companies are already able to merge cross-border, they experience a number of legal and practical difficulties when wishing to perform a cross-border conversion. Moreover, the national legislation of many Member States provides for the procedure of domestic conversions without offering an equivalent procedure for converting cross-border.
(6) It is appropriate therefore to provide procedural and substantive rules on cross-border conversions which would contribute to the abolition of restrictions on freedom of establishment and provide at the same time adequate and proportionate protection for stakeholders such as employees, creditors and minority shareholders. Loopholes need to be closed and opportunities for abuses related to tax, social security and the rights of different stakeholders, need to be prevented. It is therefore key to reorient the direction taken by the Court of Justice and clarify that it should not be possible for a company to move its registered office without moving their head office in ority shareholdersder to carry out a substantial part of its economic activity in the member state of destination.
(6a) The concepts of information and consultation of employees need to be clarified with the objectives of reinforcing the effectiveness of dialogue at transnational level. The definition of ‘consultation’ should allow for the expression of an opinion to be properly used in the decision-making process.
(6b) This directive establishes minimum requirements applicable throughout the Member States while allowing and encouraging Member States to provide more favourable protection of employees.
(7) The right to merge, divide or convert an existing company formed in a Member State into a company governed by another Member State may in certain circumstancesshould never be used for abusive purposes such as for the circumvention of labour standards, social security payments, tax obligations, creditors', minority shareholders' rights or rules on employees participation, as this is the case for example of letterbox companies. In order to combat such possible abuses, a general principle of Union law, Member States are required to ensure that companies do not use the cross- border conversion, merger or division procedure in order to create artificial arrangements aimed at obtaining undue tax, solely or partially, at obtaining tax or social security advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or members. In so far as it constitutes a derogation from a fundamental freedom, tThe fight against abuses must be interpreted strictly and be based on an individual assessment of all relevant circumstances. A common procedural and substantive framework which describes the margin of discretion and allows for the diversity of approach by Member States whilst at the same time settingsets out the requirements to streamline the actions to be taken by national authorities to fight abuses in conformity with Union law should be laid down, whilst describing, where strictly necessary, the margin of discretion allowed for Member States.
(7a) For the assessment of an artificial arrangement for tax purposes, competent authorities in the Member States shall take into account at least a number of factors laid down in Commission’s Recommendation of 6 December 2012 (2012/772/EU) on “aggressive tax planning”
(9) Given the complexity of cross- border conversions and the multitude of the interests concerned, it is appropriate to provide for an ex-ante control in order to create legal certainty. To that effect, a structured and multi-layered procedure should be set out whereby the competent authorities of both the departure and the destination Member State ensure that a decision on the approval of a cross-border conversion is taken in a fair, objective and non-discriminatory manner on the basis of all relevant elements and by taking into account all legitimate public interests, in particular, the protection of employees, members and creditors. Member States should also perform an ex-post verification in cases where new information has become available only after the finalisation of the procedure to check the legitimate character of the conversion and take appropriate action in case of irregularities.
(10) To allow all stakeholders' legitimate interests to be taken into account in the procedure governing a cross-border conversion, the company should disclose the draft terms of the cross-border conversion containing the most important information about the proposed cross- border conversion, including the envisaged new company form, the instrument of constitution and the proposed timetable for the conversion. Members, creditors and employees of the company carrying out the cross-border conversion should be notified and be given this information in due time in order that they can submit comments with regard to the proposed conversion.
(12) In order to provide information to its employees, the company carrying out the cross-border conversion should prepare a report explaining the implications of the proposed cross-border conversion for employees. The report should explain in particular the implications of the proposed cross-border conversion on the safeguarding of the jobs of the employees, information on the procedures by which arrangements for the involvement of employees in the definition of their rights to participation in the converted company are determined and on the possible options for such arrangements, whether there would be any material change in the employment relationships and the locations of the companies’ places of business and how each of these factors would relate to any subsidiaries of the company. This requirement should not however apply where the only employees of the company are in its administrative organ. The provision of the report should be without prejudice to the applicable information and consultation proceedings instituted at national level following the implementation of Directive 2002/14/EC of the European Parliament and of the Council43 or Directive 2009/38/EC of the European Parliament and of the Council44 . _________________ 43 Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community (OJ L 80, 23.3.2002, p. 29). 44 Directive 2009/38/EC of the European Parliament and of the Council of 6 May 2009 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees (Recast) (OJ L 122, 16.5.2009, p. 28).
(13) In order to assess the accuracy of the information contained in the draft terms of conversion and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed conversion constitutes an artificial arrangement, an independent expert report should be required to be prepared in order to assess the proposed cross-border conversion. In order to secure the independence of the expert, t, the competent authority, following an application by the company, should appoint two experts from a pre-selected list, that have no past or current link with the company concerned and are paid a pre-set fee by the company. The experts should be appointed by the competent authority,not work for the same firm and should together have expertise in the fields of company law, taxation and fiscal law, social security and workers’ rights. The independent experts should be appointed within one month following anthe application by the company and should deliver their report within two months after their appointment. In this context, the expert report should present all relevant information to enable the competent authority in the departure Member State to take an informed decision as to whether or not to issue the pre- conversion certificate. To this end, the experts should be able to obtain all the relevant company information and documents, meet with employees and employee representatives, and carry out all necessary investigations in order to gather all the evidence required. The experts should use information, in particular net turnover and profit or loss, number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with Union law and the law of Member States. However, in order to protect any confidential information, including business secrets of the company, such information should not form part of the expert’s final report which itself would be publically available.
(14) With a view to avoiding disproportionate costs and burdens for smaller companies carrying out the cross- border conversion, Member States can set lower procedural and independent expert fees for micro and small enterprises, as defined in the Commission Recommendation 2003/361/EC45 , should be exempted from the requirement to produce an independent expert report. However, these companies can resort to an independent expert report to prevent litigation costs with creditors. _________________ 45 Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium- sized enterprises (OJ L 124, 20.5.2003, p. 36).
(15) On the basis of the draft terms of conversion and the reports, the general meeting of the members of the company should decide on whether or not to approve those draft terms. It is important that the majority requirement for such a vote should be sufficiently high in order to ensure that the decision to convert is a collective one. In addition, members should also have the right to vote on any arrangements concerning employee participation, if they have reserved that right during the general meeting.
(19) In order to ensure that employee participation is not unduly prejudiced as a result of the cross-border conversion, where the company carrying out the cross- border conversion is operating under an employee participation system in the departure Member State, the company should be obliged to take a legal form allowing for the exercise of such participation, including through the presence of representatives of the employees in the appropriate management or supervisory organ of the company in the destination Member State. Moreover, in such a case, a bona fide negotiation between the company and its employees should take place, along the lines of the procedure provided for in Directive 2001/86/EC, with a view to finding an amicable solution reconciling theto ensure the employees' rights of the company to carry out a cross-border conversion with the employees' rights of participationinformation, consultation and participation. The agreement should ensure that at least the same level of all elements of employee involvement as applicable in the company before the conversion, continues to apply. As a result of those negotiations, either a bespoke and agreed solution or, in the absence of an agreement, the application of standard rules as set out in the Annex to Directive 2001/86/EC should apply, mutatis mutandis. In order to protect either the agreed solution or the application of those standard rules, the company should not be able to remove the information, consultation and participation rights through carrying out subsequent domestic or cross-border conversion, merger or division within threen years.
(20) In order to prevent the circumvention of employee participation rights by means of a cross-border conversion, the company carrying out a conversion which is registered in the Member State which provides for the employee participation rights, should not be able to perform a cross-border conversion without first entering into negotiations with its employees or their representatives when the average number of employees employed by that company is equivalent to four fifths of the national threshold for triggering such employee participation.
(21) To ensure a proper allocation of tasks among Member States and an efficient and effective ex-ante and ex-post control of cross-border conversions, both the departure and the destination Member States should designate the appropriate competent authorities. In particular, the competent authorities of the departure Member States should have the power to issue a pre-conversion certificate without which the competent authorities in the destination Member State should not be able to complete the cross-border conversion procedure. A list of national competent authorities in the Member States shall be prepared and publish by the Commission. Member States’ competent authorities are expected to collaborate together in cases of cross- border conversions.
(22) The issue of the pre-conversion certificate by the departure Member State should be scrutinised to ensure the legality of the cross-border conversion of the company. The competent authority of the departure Member State should decide on the issue of the pre-conversion certificate within one month of the application by the companyreception of report by the independent experts, unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or unduly prejudicing the legal or contractual rights of employees, creditors or members. In such a case, the competent authority should carry out an in-depth assessment. However, this in- depth assessment should not be carried out systematically, but it should be conducted on a case-by-case basis, where there are serious concerns as to the existence of an artificial arrangement. For their assessment, competent authorities should take into account at least a number of factors laid down in this Directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation. In order not to burden companies with an overly lengthy procedure, this in-depth assessment should in any event be concluded within twofive months of informing the company that the in-depth assessment will be carried out.
(22) The issue of the pre-conversion certificate by the departure Member State should be scrutinised to ensure the legality of the cross-border conversion of the company. The competent authority of the departure Member State should decide on the issue of the pre-conversion certificate within one month of the application by the companydate of receipt of the report by the independent expert, unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or unduly prejudicing the legal or contractual rights of employees, creditors or members. In such a case, the competent authority should carry out an in-depth assessment. However, this in-depth assessment should not be carried out systematically, but it should be conducted on a case-by-case basis, where there are serious concerns as to the existence of an artificial arrangement. For their assessment, competent authorities should take into account at least a number of factors laid down in this Directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation. In order not to burden companies with an overly lengthy procedure, this in-depth assessment should in any event be concluded within twofive months of informing the company that the in-depth assessment will be carried out.
(22) The issue of the pre-conversion certificate by the departure Member State should be scrutinised to ensure the legality of the cross-border conversion of the company. The competent authority of the departure Member State should decide on the issue of the pre-conversion certificate within onetwo months of the application by the companydate of receiving the independent expert report, unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or unduly prejudicing the legal or contractual rights of employees, creditors or members. In such a case, the competent authority should carry out an in-depth assessment. However, this in-depth assessment should not be carried out systematically, but it should be conducted on a case-by-case basis, where there are serious concerns as to the existence of an artificial arrangement. For their assessment, competent authorities should take into account at least a number of factors laid down in this Directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation. In order not to burden companies with an overly lengthy procedure, this in-depth assessment should in any event be concluded within twofive months of informing the company that the in-depth assessment will be carried out.
(23) After having received a pre- conversion certificate and the full report of the independent experts, and after verifying that the incorporation requirements in the destination Member State are fulfilled, the competent authorities of the destination Member State should register the company in the business register of that Member State. Only after this registration should the competent authority of the departure Member State strike the company off its own register. It should not be possible for the competent authority of the destination Member State to challenge the accuracy of the information provided by the pre- conversion certificate within a month after receiving the certificate, based on information that was not included in the report. The destination Member State should communicate this information to the departure Member State, after which it can decide to withdraw the certificate or to maintain it. If the departure Member State decides to maintain the certificate, the destination Member State should respect that decision. This is without prejudice to the possibility to take actions against the company when new elements have emerged that indicate the existence of an artificial arrangement, after the conclusion of the conversion. As a consequence of the cross-border conversion, the converted company should retain its legal personality, its assets and liabilities and all rights and obligations, including rights and obligations arising from contracts, acts or omissions.
(26) The evaluation of the implementation of the cross-border merger rules in Member States has shown that the number of cross-border mergers in the Union has significantly increased. However, this evaluation has also revealed certain shortcomings in relation specifically to creditor protectionemployee, creditor and shareholder protection as well as to the lack of simplified procedures which impede the full effectiveness and efficiency of those cross-border merger rules.
(28) In order to further enhance the existing cross-border merger procedure, it is necessary to simplify those merger rules, where appropriate, whilst at the same time ensuring that stakeholders, and in particular employees, are adequately protected. Therefore, the existing cross- border merger rules should be modified in order to obaligen the management or administrative organs of the merging companies to prepare separate reports detailing the legal and economic aspects of the cross-border merger for both members and for employees. The obligation onrules for cross-border mergers with those on cross-border conversions and divisions, and to oblige the management or administrative organs of the merging companyies to prepare separathe report for the members may however be waived, where those members are already informed abouts detailing the legal and economic aspects of the pcroposed merger. However, the report prepared for employees may only be waived where the merging companies and their subsidiaries do not havess-border merger for members, creditors anyd employees other than those who form part of the management or administrative organ.
(31) The lack of harmonisation of safeguards for employees, members or creditors has been identified an obstacle for cross-border mergers by different stakeholders. MEmployees, members and creditors should be offered at least the same level of protection regardless of the Member States in which the merging companies are situated. This is without prejudice to the Member States’ rules on protecting employees, creditors or shareholders which are outside the scope of the harmonised measures, such as transparency requirements.
(35a) In order to assess the accuracy of the information contained in the draft terms of merger and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed merger constitutes an artificial arrangement, an independent expert report should be required to be prepared in order to assess the proposed cross-border merger. In order to secure the independence, the competent authority, following an application by the company, should appoint two experts from a pre-selected list, that have no past or current link with the company concerned and are paid a pre-set fee by the company. The experts should not work for the same firm and should together have expertise in the fields of company law, taxation and fiscal law, social security and workers’ rights. The independent experts should be appointed within one month following the application by the company and should deliver their report within two months after their appointment. In this context, the expert report should present all relevant information to enable the competent authority in the departure Member State to take an informed decision as to whether or not to issue the pre-merger certificate. To this end, the experts should be able to obtain all the relevant company information and documents, meet with employees and employee representatives, and carry out all necessary investigations in order to gather all the evidence required. The experts should use information, in particular net turnover and profit or loss, number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with Union law and the law of Member States.
(35b) A list of national competent authorities in the Member States shall be prepared and publish by the Commission. Member States’ competent authorities are expected to collaborate together in cases of cross-border mergers.
(40) The right of companies to carry out a cross-border division may in certain circumstances be used for abusive purposes such as for the circumvention of labour standards, social security payments, tax obligations, creditors' or members' rights or rules on employees participation. In order to combat such abuses, as a general principle of Union law, Member States are required to ensure that companies do not use the cross-border division procedure in order to create artificial arrangements aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or members. In so far as it constitutes a derogation from a fundamental freedom, the fight against abuses must be interpreted strictly and. The fight against abuses must be based on an individual assessment of all relevant circumstances. A common procedural and substantive framework which describes the margin of discretion and allows for the diversity of approaches by Member States whilst at the same time settingsets out the requirements to streamline the actions to be taken by national authorities to fight abuses in conformity with Union law should be laid down, whilst describing, where strictly necessary, the margin of discretion allowed for Member States.
(44) In order to provide information to its employees, the company being divided should prepare a report explaining the implications of the proposed cross-border division for employees. The report should explain in particular the implications of the proposed cross-border division on the safeguarding of the jobs of the employees, information on the procedures by which arrangements for the involvement of employees in the definition of their rights to participation in the converted company are determined and on the possible options for such arrangements, whether there would be any material change in the conditions of employment and the locations of the companies’ places of business, and how each of these factors would relate to any subsidiaries of the company. The provision of the report should be without prejudice to the applicable information and consultation proceedings instituted at national level following the implementation of Directives 2001/23/EC, 2002/14/EC or 2009/38/EC.
(45) In order to ensureassess the accuracy of the information contained in the draft terms of division and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed division constitutes an artificial arrangement which could not be authorised, an independent expert report to assess the division plan should be required to be prepared. In order to secure the independence of the expert, t in order to assess the proposed cross-border division. In order to secure the independence, the competent authority, following an application by the company, should appoint wo experts from a pre- selected list, that have no past or current link with the company concerned and are paid a pre-set fee by the company. The experts should be appointed by the competent authority,not work for the same firm and should together have expertise in the fields of company law, taxation and fiscal law, social security and workers’ rights. The independent experts should be appointed within one month following anthe application by the company and should deliver their report within two months after their appointment. In this context, the expert report should present all relevant information to enable the competent authority ofin the departure Member State of the company being divided to take an informed decision as to whether or not to issue the pre-division certificate. To this end, the experts should be able to obtain all the relevant company information and documents, meet with employees and employee representatives, and carry out all necessary investigations in order to gather all the evidence required. The experts should use information, in particular net turnover and profit or loss, number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with Union law and the law of Member States. However, in order to protect any confidential information, including business secrets of the company, such information should not form part of the expert’s final report which itself would be publically available.
(51) To ensure the proper allocation of tasks among Member States and an efficient and effective ex-ante and ex-post control of cross-border divisions, the competent authority of the Member State of the company being divided should have the power to issue a pre-division certificate without which the authorities of the Member States of the recipient companies should not be able to complete the cross- border-division procedure. A list of national competent authorities in the Member States shall be prepared and publish by the Commission. Member States’ competent authorities are expected to collaborate together in cases of cross- border divisions.
(52) The issue of the pre-division certificate by the Member State of the company being divided should be scrutinised to ensure the legality of the cross-border division. The competent authority should decide whether to issue a pre-division certificate within one month of the application by the company has been submitteddate of receipt of the report by the independent expert, unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or members. In such a case, the competent authority should carry out an in-depth assessment. However, this in-depth assessment should not be carried out systematically but it should be conducted on a case-by-case basis where there are serious concerns as to the existence of an artificial arrangement. For their assessment, competent authorities should take into account at least a number of factors laid down in this Directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation. In order not to burden companies with an overly lengthy procedure, this in-depth assessment should in any event be concluded within twofive months informing the company that the in-depth assessment will be carried out.
(52) The issue of the pre-division certificate by the Member State of the company being divided should be scrutinised to ensure the legality of the cross-border division. The competent authority should decide whether to issue a pre-division certificate within one month of the application by the company has been submitteddate of receipt of the report by the independent expert, unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or members. In such a case, the competent authority should carry out an in- depth assessment. However, this in-depth assessment should not be carried out systematically but it should be conducted on a case-by-case basis where there are serious concerns as to the existence of an artificial arrangement. For their assessment, competent authorities should take into account at least a number of factors laid down in this Directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation. In order not to burden companies with an overly lengthy procedure, this in-depth assessment should in any event be concluded within twofive months informing the company that the in-depth assessment will be carried out.
(52) The issue of the pre-division certificate by the Member State of the company being divided should be scrutinised to ensure the legality of the cross-border division. The competent authority should decide whether to issue a pre-division certificate within one month of the application by the company has been submittedreceipt of the report of the independent expert, unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees, creditors or members. In such a case, the competent authority should carry out an in- depth assessment. However, this in-depth assessment should not be carried out systematically but it should be conducted on a case-by-case basis where there are serious concerns as to the existence of an artificial arrangement. For their assessment, competent authorities should take into account at least a number of factors laid down in this Directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation. In order not to burden companies with an overly lengthy procedure, this in-depth assessment should in any event be concluded within twofive months informing the company that the in-depth assessment will be carried out.
(55) In order to ensure that employee participation is not unduly prejudiced as a result of the cross-border division where the company carrying out the cross-border division is operating under an employee participation system, the companies resulting from the division should be obliged to take a legal form allowing for the exercise of participation, including through the presence of representatives of the employees in the appropriate management or supervisory organs of the companies. Moreover, in such a case, a bona fide negotiation between the company and its employees should take place, along the lines of the procedure provided for in Directive 2001/86/EC, with a view to finding an amicable solution reconciling the right of the company to carry out a cross-border division with the employees'' rights of participationinformation, consultation and participation. The agreement should ensure that at least the same level of all elements of employee involvement as applicable in the company before the conversion, continues to apply. As a result of those negotiations, either a bespoke and agreed solution or, in the absence of an agreement, the application of standard rules as set out in the Annex to Directive 2001/86/EC should apply mutatis mutandis. In order to protect either the agreed solution or the application of those standard rules, the company should not be able to remove the information, consultation and participation rights through carrying out subsequent domestic or cross-border conversions, mergers or divisions within 310 years.
(56) In order to prevent the circumvention of the employee participation rights by means of a cross- border division, the company carrying out a division which is registered in the Member State which provides for the employee participation rights, should not be able to perform a cross-border division without first entering into negotiations with its employees or their representatives when the average number of employees employed by that company is equivalent to four fifths of the national threshold for triggering such employee participation.
(58) The provisions of this Directive do not affect the legal or administrative provisions, including the enforcement of tax rules in cross-border conversions, mergers and divisions, of national law relating to the taxes of Member States, or its territorial and administrative subdivisions. Departure Member States shall for example have the right to impose taxes on hidden reserves of departing companies that have not yet been subject to taxation in the departing member state, in accordance with the case law of the European Court of Justice.
(58a) Companies willing to make full use of the benefits of the internal market through cross-border conversions, mergers or divisions shall submit in return to an adequate level of transparency and good corporate governance. Public Country by Country Reporting is an efficient and appropriate tool to increase transparency of multinational enterprises activities and to enable the public to assess their impact on the real economy. It will also improve shareholders ability to properly evaluate the risks taken by companies, lead to investment strategies based on accurate information and enhance decision-makers possibility to assess the efficiency and the impact of national legislations. Therefore, a set of financial information shall be published ahead of the cross-border operation ahead of its execution.
(63) The Commission should carry out an evaluation of this Directive. Pursuant to paragraph 22 of the Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making of 13 April 201652 that evaluation should be based on the five criteria of efficiency, effectiveness, relevance, coherence and value added and should provide the basis for impact assessments of possible further measures. _________________ 52This evaluation should pay particular attention to the impact of this Directive in detecting and preventing cases of cross- border conversions, mergers or divisions representing artificial arrangements. _________________ 52 OJ L123, 12.5. 2016, p. 1. OJ L123, 12.5. 2016, p. 1.
Article 86 b – paragraph 6 a (new)
(6a) "information" means the transmission by the employer to the employees and/or employees' representatives at the relevant level, of data which concern the company itself and any of its subsidiaries or establishments situated in another Member State, in order to enable them to acquaint themselves with the subject matter and to examine it. This shall take place at a time, in a manner and with a content which allows the employees and representatives to undertake an in-depth assessment of the possible impact and, where appropriate, prepare consultations with the competent organ of the company;
(6a) "participation" means the influence of the employees and/or the employees' representatives in the affairs of a company by way of the right to elect or appoint some of the members of the company's supervisory or administrative organ;
Article 86 b – paragraph 6 b (new)
(6b) "consultation" means the exchange of views and establishment of dialogue between the employees and/or the employees' representatives and the employer, with the employee’s opinion being taken into account in the decision- making process within the company. This shall take place at a time, in a manner and with a content which allows the employees and representatives ,on the basis of information provided, to express an opinion on the measures envisaged. It shall allow to meet with the Executive management and obtain a reasoned and exhaustive response before the final decision is adopted;
Article 86 b – paragraph 6 d (new)
(6d) "artificial arrangement" means any structure, transaction, scheme, action, operation or agreement or a series of these put in place to avoid or circumvent companies’ obligations, where the company has an intention to avoid or circumvent these obligations or where the action is considered to lack genuine economic substance, regardless of the intentions of the company. This includes, but is not limited to, obligations related to legal or contractual rights of employees, creditors or members, employees’ participation or obligations related to taxation or social security;
Article 86 b – paragraph 6 e (new)
(6e) "economic substance" means factual criteria, which can be used to define the taxable presence of an undertaking, such as the existence of human and physical resources specific to the entity, its management autonomy, its legal reality, the revenues it generates and, where appropriate, the nature of its assets;
Article 86 b – paragraph 6 f (new)
(6f) "head office" means the place where key management, and commercial decisions are made that are necessary for the conduct of the entity’s business as a whole;
Article 86 c – paragraph 2 – point e a (new)
(ea) the company is under investigation, is being prosecuted or has been convicted in the last 3 years for infringements of employment legislation or workers’ rights, social or tax fraud, tax evasion, tax avoidance or money laundering or any other financial crime;
Article 86 c – paragraph 2 – point e b (new)
(eb) the company has a backlog in tax or social security payments;
Article 86 c – paragraph 2 – point e c (new)
(ec) the company is under investigation, is being prosecuted or has been convicted in the last 3 years for causing environmental damage;
Article 86 c – paragraph 2 – point e d (new)
(ed) the company is under investigation, is being prosecuted or has been convicted in the last 3 years for violations of fundamental or human rights;
Article 86 c – paragraph 3
3. Member States shall ensure that the competent authority of the departure Member State shall not authorise the cross- border conversion where it determines, after an examination of the specific case and having regard to all relevant facts and circumstances, that it constitutes an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudor has a strong suspiciong the legal or contractual rights of employees, creditors or minority membersat it constitutes such an arrangement.
Article 86 c – paragraph 3 a (new)
3a. The company carrying out the cross-border conversion shall provide substantive information to demonstrate it has an actual establishment and pursues genuine and substantial economic activity in the destination Member State. To this end, at least the following conditions have to be met: (a) The EBIDTA generated by the operations of the Company in the destination member State in the last two fiscal years corresponds at least to 25%EBITDA generated by the Company in the European Union; (b) The company shall have a fixed establishment performing substantial business activities with material premises, a relevant number of workers employed on permanent basis, and a management body that is materially equipped to negotiate business with third parties. In any case, the head office of the converted Company shall be relocated to the destination Member state within 5 months from the date on which the cross- border conversion takes effect, according to article86r
4a. This Directive is without prejudice to the enforcement of tax rules in national law, including the possibility for the departure Member States to impose a tax on hidden reserves of the converting company before the conversion takes effect, in accordance with the jurisprudence of the European Court of Justice.
Article 86 c – paragraph 4 b (new)
4b. Departure Member States may tax unrealised capital gains at the time of the cross-border conversion of a company. The company may then choose between immediate payment of the amount of tax and a deferred payment of the amount of tax, together with interest in accordance with the applicable national legislation. If the company opts for the latter, the departure Member State may request the provision of a bank guarantee.
Article 86 d – paragraph 1 – point d a (new)
(da) detailed information on the transfer of the head office;
Article 86 d – paragraph 1 – point d b (new)
(db) The reasons for the conversion;
Article 86 d – paragraph 1 – point j
(j) the likely repercussions of the cross-border conversion on employment, , wage development and company level social dialogue including board level representation of employee representatives
Article 86 d – paragraph 1 – point k a (new)
(ka) the name of the ultimate undertaking and, where applicable, the list of all its subsidiaries, a brief description of the nature of their activities and their respective geographic allocation;
Article 86 d – paragraph 1 – point k b (new)
(kb) the number of employees on a full- time equivalent basis;
Article 86 d – paragraph 1 – point k c (new)
(kc) fixed assets other than cash or cash equivalents; the amount of the net turnover, including a distinction between the turnover made with related parties and the turnover made with unrelated parties;
Article 86 – paragraph 1 – point k d (new)
(kd) the amount of profit or loss before income tax;
Article 86 d – paragraph 1 – point k e (new)
(ke) the amount of income tax accrued (current year)which is the current tax expense recognised on taxable profits or losses of the financial year by undertakings and branches resident for tax purposes in the relevant tax jurisdiction;
Article 86 d – paragraph 1 – point k f (new)
(kf) the amount of income tax paid which is the amount of income tax paid during the relevant financial year by undertakings and branches resident for tax purposes in the relevant tax jurisdiction;
Article 86 – paragraph 1 – point k g (new)
(kg) the amount of accumulated earnings and stated capital;
Article 86 d – paragraph 1 – point k h (new)
(kh) details of public subsidies received and any donations made to politicians, political organisations or political foundations;
Article 86 d – paragraph 1 – point k i (new)
(ki) whether undertakings, subsidiaries or branches benefit from preferential tax treatment, from a patent box or equivalent regimes;
Article 1 – paragraph 1 – point 3 Directive (EU) 2017/1132
2. In addition to the official languages of the departure and destination Member States, Member States shall allow the company carrying out the cross-border conversion to use a language customary in the sphere of international business and finance in order to draw up the draft terms of a cross-border conversion and all other related documents. Member States shall specify which language will prevail in the case of discrepancies identified between the different linguistic versions of those documents. Members, employees or creditors shall have the possibility to comment on these draft terms. The comments shall be included in the final report and be made public.
Article 86 e – paragraph 3
3. The report referred to in paragraph 1 of this Article, shall be made available, at least electronically, to the members not less than two months before the date of the general meeting referred to in Article 86i. That report shall also be made similarly available to the representatives of the employees of the company carrying out the cross-border conversion or, where there are no such representatives, to the employees themselves, and to the European Works Council, where applicable.
Article 86 f – paragraph 2 – point c
(c) any material changes in the conditions of employment, including the conditions laid down in law and collective agreements, and in the location of the company’s places of business;
Article 86 f – paragraph 2 – point d
(d) whether the factors set out in points (a), (b) and (c) also relate to any subsidiaries, branches or controlled undertakings according to art 3 of Directive 2009/38/EC of the company.
Article 86 f – paragraph 2 – point d a (new)
(da) where appropriate, information on the procedures by which arrangements for the involvement of employees in the definition of their rights to participation in the converted company are determined pursuant to Article 86l and on the possible options for such arrangements;
Article 86 f – paragraph 2 – point d b (new)
(db) the implications of the cross- border conversion on the future business of the company and on the management's strategic plan;
Article 86 f – paragraph 2 – point d c (new)
(dc) the implications of the cross- border conversion for members;
Article 86 f – paragraph 2 – point d d (new)
(dd) the rights and remedies available to members opposing the conversion in accordance with Article 86j
Article 86 f – paragraph 3
3. The report referred to in paragraph 1 of this Article, shall be made available, at least electronically, to the representatives of the employees of the company carrying out the cross-border conversion or, where there are no such representatives, to the employees themselves and to the European Works Council, where applicable, not less than two months before the date of the general meeting referred to in Article 86i. That report shall also be made similarly available to the members of the company carrying out the cross-border conversion.
Article 86 f – paragraph 3 a (new)
3a. The European Works Councils, where applicable, the national employee representation bodies and the trade unions represented in the company shall have appropriate resources to conduct a thorough analysis on the report.
Article 86 f – paragraph 4 a (new)
4a. The Executive management or the administrative organ of the company which intends to carry out the cross- border conversion, shall provide a motivated and written response to the employee opinion before the date of the general meeting referred to in Article 86i.
5. However, where a company carrying out the cross-border conversion and its subsidiaries, if any, have no employees other than those who form part of the management or administrative organ, the report referred to in paragraph 1 shall not be required.deleted
Article 86g Examination by an independent experts
Article 86 g – paragraph 1
Member States shall ensure that the company carrying out the cross-border conversion applies not less than two months before the date of the general meeting referred to in Article 86i to the competent authority designated in accordance with Article 86m(1), to appoint antwo experts to examine and assess the draft terms of the cross-border conversion and the reports referred to in Articles 86e and 86f, subject to the proviso set out in paragraph 6 of this Article.
Article 86 g – paragraph 2
2. The competent authority shall appoint antwo independent experts within five working daysone month from the application referred to in paragraph 1 and the receipt of the draft terms and reports. The experts shall be independent from the company carrying out the cross-border conversion and may be a naturappointed on the basis of a pre-selected list that was specifically established for the purpose of assessing cross-border conversions. The list shall include natural persons on the basis of their personal expertise. The fields of expertise to be reflected in the list should include at least company law, taxation and fiscal law, social security and workers’ rights. Together, the two independent experts shall cover all of the fields of expertise mentioned in this paragraph. An expert may operate on their own behalf or on behalf of a legal person depending upon the law of. Member States shall define fixed rates for the fees paid to the indeparture Member Stateendent experts, which shall be paid by the company applying for the conversion. The experts shall be independent from the company carrying out the cross-border conversion . Member States shall take into account, in assessing the independence of the experts, the framework established in Articles 22 andto 22b of Directive 2006/43/EC. In addition: (a) the experts or the legal person on whose behalf he or she is operating, shall not have performed work, in whatever capacity, for the company applying for the conversion in the five years prior to his or her appointment or vice versa; and (b) the two experts appointed shall not operate on behalf of the same legal person.
Article 86 g – paragraph 3
3. The two experts shall draw up a written report within two months after their appointment, providing at least:
Article 86 g – paragraph 3 – point b
(b) a description of all factual elements necessary for the competent authority, designated in accordance with Article 86m(1), to carry out an in-depth assessment to determine whether the intended cross-border conversion constitutes an artificial arrangement in accordance with Article 86n, including at a minimum the following: (i) the characteristics of the establishment in the destination Member State, including the intent, the sector, the investment, the net turnover and profit or loss, (ii) the number of employees, the composition of the balance sheet, working in the country of destination, the number of employees working in another country grouped according to the country of work, the number of employees posted or sent in the year prior to the conversion within the meanings of Regulation (EC) No 883/2004 and Directive96/71/EC, the number of employees working simultaneously in more than one Member State within the meaning of Regulation (EC) No 883/2004, (iii) the tax residence, (iv) the assets and their location, (v) the habitual place of work of the employees and of specific groups of employees, (vi) the places where social contributions are due and; (vii) the commercial risks assumed by the converted company in the destination Member State and the departure Member State (viii) the composition of the balance sheet and of the financial statement in the destination member state and in all Member States in which the company operates in the last two fiscal years.
Article 86 g – paragraph 3 a (new)
3a. Whenever relevant, the independent experts shall ask questions to and receive information from the competent authority of the destination Member State. The competent authority shall ensure communication between the independent expert and other authorities in that Member State responsible for any of the areas touched upon by this Directive.
Article 86 g – paragraph 5
5. Member States shall ensure that information submitted to the independent expert can only be used for the purpose of drafting their report and that confidential information, including business secrets, shall not be disclosed. Where appropriate, the expert may submit a separate document containing any such confidential information to the competent authority, designated in accordance with Article 86m(1) and that separate document shall only be made available to the company carrying out the cross- border conversion and not be disclosed to any other party.
Article 86 g – paragraph 6
6. Member States shall exemptmay apply lower independent expert fees for 'micro' and 'small enterprises' as defined in Commission Recommendation 2003/361/EC (**) from the provisions of this Article.
1. After taking note of the reports referred to in Articles 86e, 86f and 86g, where applicable, the general meeting of the company carrying out the conversion shall decide, by means of a resolution, whether to approve the draft terms of the cross-border conversion. Prior to taking a decision, all applicable information and consultation rights have to be met in a way and at such a time that an opinion by the employees can be taken into consideration. The company shall inform the competent authority designated in accordance with Article 86m(1) of the decision of the general meeting.
Article 86 l – paragraph 3
3. In the cases referred to in paragraph 2 of this Article, theThe information, consultation and participation of employees in the converted company and their involvement in the definition of such rights shall be the object of an agreement between the employees and the management and shall be regulated by the Member States, mutatis mutandis and subject to paragraphs 4 to 7 of this Article, in accordance with the principles and procedures laid down in Article 12(2), (3) and (4) of Regulation (EC) No 2157/2001 and the following provisions of Directive 2001/86/EC:
Article 86 l – paragraph 3 – point b
(b) Article 4(1), Article 4(2)(a), (b), (c) (g) and (h), Article 4(3) and Article 4(4);
Article 86 l – paragraph 3 – point e
(e) the first subparagraph of Article 7(1);
Article 86 l – paragraph 3 – point g
(g) the Annex, with the exclusion of points (a) en (b) of Part 3 of the Annex, instead of which the following will apply as a minimum: The employees of the Company, its subsidiaries and establishments and/or the representative body shall have the right to elect and appoint a number of members of the administrative or supervisory body of the converted company equal to two representatives in companies up from 50 employees, one third in companies having from 250 employees to 1000 employees and parity in companies with more than 1000 employees.
Article 86 l – paragraph 3 a (new)
3a. The agreement reached shall provide for at least the same level of employee participation as operated in the company prior to the conversion as well as at least the level that would apply following the rules in force concerning employee participation, if any, in the destination Member State. This level shall be measured by reference to the proportion of employee representatives amongst the members of the administrative or supervisory organ or their committees or of the management group which covers the profit units of the company, subject to employee representation.
Article 86 l – paragraph 4 – point a
(a) shall confer on the special negotiating body the right to decide, by a majority of two thirds of its members representing at least two thirds of the employees, not to open negotiations or to terminate negotiations already opened and to rely on the rules on participation in force in the destination Member State;deleted
Article 86 l – paragraph 4 – point b
(b) may, in the case where, following prior negotiations, standard rules for participation apply and notwithstanding such rules, decide to limit the proportion of employee representatives in the administrative organ of the converted company. However, if in the company carrying out the conversion employee representatives constituted at least one third of the administrative or supervisory board, the limitation may never result in a lower proportion of employee representatives in the administrative organ than one third;deleted
(c) shall ensure that the rules on employee participation that applied prior to the cross-border conversion continue to apply until the date of application of any subsequently agreed rules or in the absence of agreed rules until the application of default rules in accordance with point (ag) of Part 3 of the Annexagraph 3.
5. The extension of participation rights to employees of the converted company employed in other Member States, referred to in point (b) of paragraph 2, shall not entail any obligation for Member States which choose to do so to take those employees into account when calculating the size of workforce thresholds giving rise to participation rights under national law.deleted
Article 86 l – paragraph 7
7. Where the converted company is operating under an employee participation system, that company shall be obliged to take measures to ensure that employees' participation rights are protected in the event of any subsequent cross-border or domestic merger, division or conversion for a period of threen years after the cross- border conversion has taken effect, by applying mutatis mutandis the rules laid down in paragraphs 1 to 6.
Article 86 m – paragraph 1
1. Member States shall designate the authority competent to scrutinise the legality of the cross-border conversion as regards that part of the procedure which is governed by the law of the departure Member State and to issue a pre- conversion certificate attesting compliance with all the relevant conditions and the proper completion of all procedures and formalities in the departure Member State. The competent authority shall set up appropriate coordination mechanisms with other authorities and bodies in that Member State working in the policy fields covered by this Directive.
Article 86 m – paragraph 2 – point b
(b) the reports referred to in Articles 86e, 86f and 86g, as appropriate, and including the employees’ opinion and response of the management referred to in article 86f paragraphs 4 and 4a;
Article 86 m – paragraph 7 – introductory part
7. Member States shall ensure that the assessment by the competent authority is carried out within one month of the date of receipt of the information concerning the approval of the conversion by the general meeting of the companyreport by the independent expert. It shall have one of the following outcomes:
Article 86 n – paragraph 1 – subparagraph 1
Member States shall ensure in order to assess whether the cross-border conversion constitutes an artificial arrangement within the meaning of Article 86c(3), that the competent authority of the departure Member State carries out an in-depth assessment of all relevant facts and circumstances and shall take into account at a minimum the following: (i) the characteristics of the establishment in the destination Member State, including the intent, the sector, the investment, the net turnover and profit or loss, (ii) the number of employees, working in the country of destination, the number of employees working in another country grouped according to the country of work, the number of employees posted in the year prior to the conversion within the meanings of Regulation (EC) No 883/2004and Directive 96/71/EC, the number of employees working simultaneously in more than one Member State within the meaning of Regulation (EC) No 883/2004,the composition of the balance sheet, (iii) the tax residence, (iv) the assets and their location, (v) the habitual place of work of the employees and of specific groups of employees, (vi) the places where social contributions are due, (vii) and the commercial risks assumed by the converted company in the destination Member State and the departure Member State. , and (viii) the composition of the balance sheet and of the financial statement in the destination member state and in all member States in which the company operates in the last two fiscal years.
Article 86 n – paragraph 1 a (new)
Where relevant, the competent authority shall ask questions to and receive information from the competent authority of the destination Member State. The competent authority shall ensure communication between the independent expert and other authorities in that Member State responsible for any of the areas touched upon by this Directive.
Article 86 n – paragraph 2
2. Member States shall ensure that where the competent authority referred to in paragraph 1 decides to carry out an in- depth assessment, it is able to hear the company and all parties that have submitted observations pursuant Article 86h(1)(c) in accordance with national law. The competent authorities referred to in paragraph 1 may also hear any other interested third parties in accordance with national law. The competent authority shall take its final decision regarding the issue of the pre-conversion certificate within two five months from the start of the in-depth assessment.
Article 86 p – paragraph 1
Member States shall designate an authority competent to scrutinise the legality of the cross-border conversion as regards that part of the procedure which is governed by the law of the destination Member State and to approve the cross-border conversion where the conversion complies with all the relevant conditions and the proper completion of all procedures and formalities in the destination Member State. The competent authority shall set up appropriate coordination mechanisms with other authorities and bodies in that Member State working in the policy fields covered by this Directive.
Article 86 u
However, if during the year following the date on which the cross-border conversion takes effect, new information on this cross-border conversion are brought to the attention of the competent authorities alleging of genuine suspicion of fraud, the competent authorities shall proceed to a revised assessment of the facts of the case and can take effective, proportionate and dissuasive sanctions, including financial penalties, in cases of artificial arrangements.
Article 119 – paragraph 2 a (new)
(4a) In article 119, the new paragraph is inserted: "information" means the transmission by the employer to the employees and/or employees' representatives at the relevant level, of data which concern the company itself and any of its subsidiaries or establishments situated in another Member State, in order to enable them to acquaint themselves with the subject matter and to examine it. This shall take place at a time, in a manner and with a content which allows the employees and representatives to undertake an in-depth assessment of the possible impact and, where appropriate, prepare consultations with the competent organ of the company;
Article 119 – paragraph 2 b (new)
(4b) In article 119, the new paragraph is inserted: “consultation" means the exchange of views and establishment of dialogue between the employees and/or the employees' representatives and the employer, with the employee’s opinion being taken into account in the decision- making process within the company. This shall take place at a time, in a manner and with a content which allows the employees and representatives ,on the basis of information provided, to express an opinion on the measures envisaged. It shall allow to meet with the Executive management and obtain a reasoned and exhaustive response before the final decision is adopted;
Article 119 – paragraph 2 c (new)
(4c) In article 119, the new paragraph is inserted: "participation” means the influence of the employees and/or the employees' representatives in the affairs of a company by way of the right to elect or appoint some of the members of the company's supervisory or administrative organ
Article 119 – paragraph 2 d (new)
(4d) In article 119, the new paragraph is inserted: “artificial arrangement” means any structure, transaction, scheme, action, operation or agreement or a series of these put in place to avoid or circumvent companies’ obligations, where the company has an intention to avoid or circumvent these obligations or where the action is considered to lack genuine economic substance, regardless of the intentions of the company. This includes, but is not limited to, obligations related to legal or contractual rights of employees, creditors or members, employees’ participation or obligations related to taxation or social security;
Article 119 – paragraph 2 e (new)
(4e) In article 119, the new paragraph is inserted: 'economic substance' means factual criteria, which can be used to define the taxable presence of an undertaking, such as the existence of human and physical resources specific to the entity, its management autonomy, its legal reality, the revenues it generates and, where appropriate, the nature of its assets;
Article 119 – paragraph 2 f (new)
(4f) In article 119, the new paragraph is inserted: “head office” means the place where key management, and commercial decisions are made that are necessary for the conduct of the entity’s business as a whole;
Article 120 – paragraph 4
4. Member States shall ensure that this Chapter does not apply to the company or companies where: where a company intends to carry out a cross-border merger, the Member States concerned verify that the cross-border merger complies with the conditions laid down in this paragraph. A company shall not be entitled to carry out a cross- border merger in any of the following circumstances:
Article 120 – paragraph 4 – point e a (new)
(ea) a company is under investigation, is being prosecuted or has been convicted in the last 3years for infringements of employment legislation or workers’ rights, social or tax fraud, tax evasion, tax avoidance or money laundering or any other financial crime;
Article 120 – paragraph 4 – point e b (new)
(eb) a company has a backlog in tax or social security payments;
Article 120 – paragraph 4 – point e c (new)
(ec) a company is under investigation, is being prosecuted or has been convicted in the last 3 years for causing environmental damage;
Article 120 – paragraph 4 – point e d (new)
Article 120 – paragraph 4 a (new)
4a. Member States shall ensure that the competent authorities of the Member States concerned shall not authorise the cross-border merger where it determines, after an examination of the specific case and having regard to all relevant facts and circumstances, that it constitutes an artificial arrangement, or has a strong suspicion that it constitutes such an arrangement.
Article 120 – paragraph 4 b (new)
4b. The companies carrying out the cross-border merger shall provide substantive information to demonstrate they have an actual establishment and pursue genuine and substantial economic activity in the different Member States concerned. To this end, at least the following condition has to be met: The company shall have a fixed establishment performing substantial business activities with material premises, a relevant number of workers employed on permanent basis, and a management body that is materially equipped to negotiate business with third parties.
Article 120 – paragraph 5 a (new)
(5a) In article 120, the following paragraph 5 is inserted: This Directive is without prejudice to the enforcement of tax rules in national law, including the possibility for the departure Member States to impose a tax on hidden reserves of the converting company before the conversion takes effect, in accordance with of the European Court of Justice
Article 120 – paragraph 5 b (new)
(5b) In article 120, the following paragraph 6 is inserted: Member States may tax unrealised capital gains at the time of the cross-border merger of companies. The companies may then choose between immediate payment of the amount of tax and a deferred payment of the amount of tax, together with interest in accordance with the applicable national legislation. If a company opts for the latter, the Member State may request the provision of a bank guarantee.
Article 122 – introductory part
(-a) In Article 122, the introductory part is replaced by the following: The management or administrative organ of each of the merging companies shall draw up the common draft terms of a cross-border merger. The common draft terms of a cross-border merger shall include at least the following elements:
Article 1 – paragraph 1 – point 7 – point b a (new) Directive (EU) 2017/1132
(ba) the following points (o) and (p) are added: (o) detailed information on the head office; (p) the reasons for the merger;
Article 122 – point b b (new)
(bb) the following points (q) to (y) are added: (q) the name of the ultimate undertaking and, where applicable, the list of all its subsidiaries, a brief description of the nature of their activities and their respective geographic allocation; (r) the number of employees on a full- time equivalent basis; (s) fixed assets other than cash or cash equivalents; the amount of the net turnover, including a distinction between the turnover made with related parties and the turnover made with unrelated parties; (t) the amount of profit or loss before income tax; (u) the amount of income tax accrued (current year) which is the current tax expense recognised on taxable profits or losses of the financial year by undertakings and branches resident for tax purposes in the relevant tax jurisdiction; (v) the amount of income tax paid which is the amount of income tax paid during the relevant financial year by undertakings and branches resident for tax purposes in the relevant tax jurisdiction; (w) the amount of accumulated earnings; stated capital; (x) details of public subsidies received and any donations made to politicians, political organisations or political foundations; (y) whether undertakings, subsidiaries or branches benefit from preferential tax treatment, from a patent box or equivalent regimes.
Article 122 – second subparagraph
In addition to the official language of each Member State of the merging companies, Member States shall allow the merging companies to use a language customary in the sphere of international business and finance to draw up the common draft terms of a cross-border merger and all other related documents. Member States shall specify which language will prevail in the case of discrepancies identified between the different linguistic versions of those documents. Members, employees or creditors shall have the possibility to comment on these draft terms. The comments shall be included in the final report and be made public.;
Article 124 – paragraph 3
3. The report shall be made available, at least electronically, to the members of each of the merging companies not less than one month before the date of the general meeting referred to in Article 126. The report shall also be made similarly available to the representatives of the employees of each of the merging companies, or where there are no such representatives, to the employees themselves and to the European Works Council, where applicable. However, where the approval of the merger is not required by general meeting of the acquiring company in accordance with Article 126(3), the report shall be made available, at least one month before the date of the general meeting of the other merging company or companies.
Article 124a – paragraph 2 – point c
(c) any material changes in the conditions of employment, including the conditions laid down in law and collective agreements, and in the locations of the companies’ places of business;
Article 124a – paragraph 2 – point d
(d) whether the factors set out in points (a), (b) and (c) also relate to any subsidiaries, branches or controlled undertakings according to art 3 of Directive 2009/38/EC of the merging companies.
Article 124a – paragraph 2 point d a (new)
(da) the rights and remedies available to members opposing the conversion in accordance with Article 126a;
Article 124a – paragraph 2 – point d b (new)
(db) where appropriate, information on the procedures by which arrangements for the involvement of employees in the definition of their rights to participation in the converted company are determined pursuant to Article 86l and on the possible options for such arrangements;
Article 124a – paragraph 2 – point d c (new)
(d c) the implications of the cross- border conversion on the future business of the company and on the management's strategic plan;
Article 1 – paragraph 1 – point 10 Directive (EU) 2017/1132
(d d) the implications of the cross- border conversion for members;
Article 124a – paragraph 3 – subparagraph 1
The report referred to in paragraph 1 of this Article, shall be made available, at least electronically, to the representatives of the employees of each of the merging companies or, where there are no such representatives, to the employees themselves, and to the European Works Council, where applicable, not less than one month before the date of the general meeting referred to in Article 126. The report shall also be made similarly available to the members of each of the merging companies.
Article 124a – paragraph 3 a (new)
The European Works Councils, where applicable, the national employee representation bodies and the trade unions represented in the company shall have appropriate resources to conduct a thorough analysis on the report.
Article 124a – paragraph 4 a (new)
4 a. The Executive management or the administrative organ of the company which intends to carry out the cross- border merger, shall provide a motivated and written response to the employee opinion before the date of the general meeting referred to in Article 126.
Article 124a – paragraph 5
5. However, where the merging companies and their subsidiaries, if any, have no employees, other than those who form part of the management or administrative organ, the report referred in paragraph 1 shall not be required to be drawn up.deleted
Article 124b (new)
(10 a) The following new article 124b is inserted: Article 124b Examination by an independent expert 1.Member States shall ensure that the companies carrying out the cross-border merger apply not less than two months before the date of the general meeting referred to in Article 126 to the competent authorities of the Member States, to appoint two experts to examine and assess the draft terms of the cross-border merger and the reports referred to in this chapter, subject to the proviso set out in paragraph 6 of this Article. The application for the appointment of an expert shall be accompanied by the following: (a) the draft terms of the cross-border merger; (b) the company reports referred to in this chapter. 2.The competent authorities, in coordination with each other, shall appoint two independent experts within one month from the application referred to in paragraph 1 and the receipt of the draft terms and reports. The experts shall be appointed on the basis of pre-selected lists in the Member States concerned, that were specifically established for the purpose of assessing cross-border mergers. The list shall include natural persons on the basis of their personal expertise. The fields of expertise to be reflected in the list should include at least company law, taxation and fiscal law, social security and workers’ rights. Together, the two independent experts shall cover all of the fields of expertise mentioned in this paragraph. An expert may operate on their own behalf or on behalf of a legal person. Member States shall define fixed rates for the fees paid to the independent experts, which shall be paid by the companies applying for the merger. The experts shall be independent from the company carrying out the cross-border merger. Member States shall take into account, in assessing the independence of the experts, the framework established in Articles 22 to 22b of Directive 2006/43/EC. In addition: (a) the experts or the legal person on whose behalf he or she is operating, shall not have performed work, in whatever capacity, for the company applying for the merger in the five years prior to his or her appointment or vice versa; and (b) the two experts appointed shall not operate on behalf of the same legal person. 3.The experts shall draw up a written report within two months after their appointment, providing at least:(a) a detailed assessment of the accuracy of both the draft terms and the reports as well as information submitted by the company carrying out the cross-border merger; (b) a description of all factual elements necessary for the competent authorities, designated, to carry out an in-depth assessment to determine whether the intended cross-border merger constitutes an artificial arrangement, including at a minimum the following: (i) the characteristics of the establishment in the different Member State, including the intent, the sector, the investment, the net turnover and profit or loss, (ii) the number of employees working in the countries concerned, the number of employees working in another country grouped according to the country of work, the number of employees posted or sent in the year prior to the merger within the meanings of Regulation (EC) No 883/2004 and Directive96/71/EC, the number of employees working simultaneously in more than one Member State within the meaning of Regulation (EC) No 883/2004, (iii) the tax residence, (iv) the assets and their location ,(v)the habitual place of work of the employees and of specific groups of employees, (vi) the places where social contributions are due; (vii) the commercial risks assumed by the merged company in the Member States concerned (viii) the composition of the balance sheet and of the financial statement in the destination member state and in all member States in which the company operates in the last two fiscal years. 4.Whenever relevant, the independent experts shall ask questions to and receive information from the competent authorities in the Member States concerned. The competent authorities shall ensure communication between the independent expert and other authorities in their Member State responsible for any of the areas touched upon by this Directive. 5.Member States shall ensure that the independent experts shall be entitled to obtain, from the company carrying out the cross-border merger, all relevant information and documents and to carry out all necessary investigations to verify all elements of the draft terms or management reports. The expert shall also be entitled to receive comments and opinions from the representatives of the employees of the company, or, where there are no such representatives, from the employees themselves and also from the creditors and members of the company. 6.Member States shall ensure that information submitted to the independent experts can only be used for the purpose of drafting their report. 6. Member States may apply a lower independent expert fee for 'micro' and 'small enterprises' as defined in Commission Recommendation2003/361/EC (**).
Article 1 – paragraph 1 – point 10 b (new)
Article 125 – title
(10 b) The title of Article 125 is amended as follows: "Independent expert report for the members"
Article 1 – paragraph 1 – point 12 – point a
Article 126 – paragraph 1
1. After taking note of the reports referred to in Articles 124, 124a and 125, as appropriate, the general meeting of each of the merging companies shall decide, by means of a resolution, on the approval of the common draft terms of the cross-border merger. Prior to taking a decision, all applicable information and consultation rights have to be met in a way and at such a time that an opinion by the employees can be taken into consideration.;
Article 1 – paragraph 1 – point 18 – introductory part
(18) Article 133 is amended as follows: replaced by the following: 1. The information, consultation and participation of employees in the converted company and their involvement in the definition of such rights shall be the object of an agreement between the employees and the management and shall be regulated by the Member States, mutatis mutandis and subject to paragraphs 2 to 5 of this Article, in accordance with the principles and procedures laid down in Article 12(2) and (4) of Regulation (EC) No2157/2001 and the following provisions of Directive 2001/86/EC: (a) Article 3(1),(2)(a)(i), 2(b) and (3), the first indent of the first subparagraph of Article3(4), the second subparagraph of Article 3(4), Article 3(5), the third subparagraph of Article 3(6) and Article 3(7); (b) Article 4(1),Article 4(2)(a),(b) (c)(g) and (h), Article 4(3) and Article 4(4); (c) Article 5; (d) Article 6; (e) Article 7(1);(f) Articles 8, 9, 10 and 12; (g) the Annex, with the exclusion of points (a) en (b) of Part 3, instead of which the following will apply as a minimum: The employees of the Company, its subsidiaries and establishments and/or the representative body shall have the right to elect and appoint a number of members of the administrative or supervisory body of the converted company equal to two representatives in companies up from 50 employees, one third in companies having from 250 employees to 1000 employees and parity in companies with more than 1000 employees. 2.The agreement reached shall provide for at least the same level of employee participation as operated in the company prior to the conversion as well as at least the level that would apply following the rules in force concerning employee participation, if any, in the destination Member State. This level shall be measured by reference to the proportion of employee representatives amongst the members of the administrative or supervisory organ or their committees or of the management group which covers the profit units of the company, subject to employee representation. 3. When regulating the principles and procedures referred to in paragraph 1, Member States shall ensure that the rules on employee participation that applied prior to the cross-border conversion continue to apply until the date of application of any subsequently agreed rules or in the absence of agreed rules until the application of default rules in accordance with point (g) of paragraph 1. 4. When regulating the principles and procedures referred to in paragraph 3, Member States shall ensure that the rules on employee participation that applied prior to the cross-border conversion continue to apply until the date of application of any subsequently agreed rules or in the absence of agreed rules until the application of default rules in accordance with point (g) of paragraph 1. 5. Where the company carrying out the conversion is operating under an employee participation system, that company shall be obliged to take a legal form allowing for the exercise of participation rights. 7. Where the converted company is operating under an employee participation system, that company shall be obliged to take measures to ensure that employees' participation rights are protected in the event of any subsequent cross-border or domestic merger, division or conversion for a period of three ten years after the cross-border conversion has taken effect, by applying mutatis mutandis the rules laid down in paragraphs 1 to 4. 8. A company shall communicate to its employees the outcome of the negotiations concerning employee participation without undue delay.
(3 a) "information" means the transmission by the employer to the employees and/or employees' representatives at the relevant level, of data which concern the company itself and any of its subsidiaries or establishments situated in another Member State, in order to enable them to acquaint themselves with the subject matter and to examine it. This shall take place at a time, in a manner and with a content which allows the employees and representatives to undertake an in-depth assessment of the possible impact and, where appropriate, prepare consultations with the competent organ of the company;
Article 160b – point 3 b (new)
(3 b) "participation” means the influence of the employees and/or the employees' representatives in the affairs of a company by way of the right to elect or appoint some of the members of the company's supervisory or administrative organ;
Article 160b – point 3 c (new)
(3 c) “consultation" means the exchange of views and establishment of dialogue between the employees and/or the employees' representatives and the employer, with the employee’s opinion being taken into account in the decision- making process within the company. This shall take place at a time, in a manner and with a content which allows the employees and representatives ,on the basis of information provided, to express an opinion on the measures envisaged. It shall allow to meet with the Executive management and obtain a reasoned and exhaustive response before the final decision is adopted;
Article 160b – point 3 d (new)
(3 d) “artificial arrangement” means any structure, transaction, scheme, action, operation or agreement or a series of these put in place to avoid or circumvent companies’ obligations, where the company has an intention to avoid or circumvent these obligations or where the action is considered to lack genuine economic substance, regardless of the intentions of the company. This includes, but is not limited to, obligations related to legal or contractual rights of employees, creditors or members, employees’ participation or obligations related to taxation or social security;
Article 160b – point 3 e (new)
(3 e) 'economic substance' means factual criteria, which can be used to define the taxable presence of an undertaking, such as the existence of human and physical resources specific to the entity, its management autonomy, its legal reality, the revenues it generates and, where appropriate, the nature of its assets;
Article 160b – point 3 f (new)
(3 f) “head office" means the place where key management, and commercial decisions are made that are necessary for the conduct of the entity’s business as a whole;
Article 160d – paragraph 2 – point e a (new)
(e a) the company is under investigation, is being prosecuted or has been convicted in the last 3 years for infringements of employment legislation or workers’ rights, social or tax fraud, tax evasion, tax avoidance or money laundering or any other financial crime;
Article 160d – paragraph 2 – point e b (new)
(e b) the company has a backlog in tax or social security payments;
Article 160d – paragraph 2 – point e c (new)
(e c) the company is under investigation, is being prosecuted or has been convicted in the last 3 years for causing environmental damage;
Article 160d – paragraph 2 – point e d (new)
(e d) the company is under investigation, is being prosecuted or has been convicted in the last 3 years for violations of fundamental or human rights;
Article 160d – paragraph 3
3. The Member State of the company being divided shall ensure that the competent authority shall not authorise the division when it determines, after an examination of the specific case and having regard to all relevant facts and circumstances, that it constitutes an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudor has a strong suspiciong the legal or contractual rights of employees, creditors or membersat it constitutes such an arrangement.
Article 160d – paragraph 3 a (new)
3 a. The company carrying out the cross-border division shall provide substantive information to demonstrate it has an actual establishment and pursues genuine and substantial economic activity in the destination Member State. To this end, at least the following conditions have to be met: a) The EBIDTA generated by the operations of the Company in the destination Member State in the last two fiscal years corresponds at least to 25%EBITDA generated by the Company in the European Union; b) The company shall have a fixed establishment performing substantial business activities with material premises, a relevant number of workers employed on permanent basis, and a management body that is materially equipped to negotiate business with third parties.
Article 160d – paragraph 4 a (new)
4 a. This Directive is without prejudice of the enforcement of tax rules in national law, including the possibility for the Member State of origin to impose a tax on hidden reserves of the dividing company before the division takes effect, in accordance with the jurisprudence of the European Court of Justice.
Article 160d – paragraph 4 b (new)
4 b. Member States may tax unrealised capital gains at the time of the cross- border division of a company. The company may then choose between immediate payment of the amount of tax and a deferred payment of the amount of tax, together with interest in accordance with the applicable national legislation. If the company opts for the latter, the Member State of origin may request the provision of a bank guarantee.
Article 160e – paragraph 1 – point d a (new)
(d a) detailed information on the head office;
Article 160e – paragraph 1 – point d b (new)
(d b) The reasons for the division;
Article 160e – paragraph 1 – point e
(e) the likely repercussions of the cross-border division on employment , wage development and company level social dialogue including board level representation of employee representatives;
Article 160e – paragraph 1 – point r a (new)
(r a) (r a) the name of the ultimate undertakings and, where applicable, the list of all its subsidiaries, a brief description of the nature of their activities and their respective geographic allocation; (rb) the number of employees on a full- time equivalent basis; (rc) fixed assets other than cash or cash equivalents; the amount of the net turnover, including a distinction between the turnover made with related parties and the turnover made with unrelated parties; (rd) the amount of profit or loss before income tax; (re) the amount of income tax accrued (current year) which is the current tax expense recognised on taxable profits or losses of the financial year by undertakings and branches resident for tax purposes in the relevant tax jurisdiction; (rf) the amount of income tax paid which is the amount of income tax paid during the relevant financial year by undertakings and branches resident for tax purposes in the relevant tax jurisdiction; (rg) the amount of accumulated earnings; stated capital; (rh) details of public subsidies received and any donations made to politicians, political organisations or political foundations; (ri) whether undertakings, subsidiaries or branches benefit from preferential tax treatment, from a patent box or equivalent regimes.
Article 160e – paragraph 4
4. In addition to the official languages of the Member States of the recipient companies and the one being divided, Member States shall allow the company to use a language customary in the sphere of international business and finance in order to draw up the draft terms of cross-border division and all other related documents. Member States shall specify which language will prevail in case of discrepancies among different linguistic versions of those documents. Members, employees or creditors shall have the possibility to comment on these draft terms. The comments shall be included in the final report and be made public.
Article 160g – paragraph 3
3. The report referred to in paragraph 1 of this Article shall be made available, at least electronically, to the members of the company being divided not less than two months before the date of the general meeting referred to in Article 160k. That report shall also be made similarly available to the representatives of the employees of the company being divided or, where there are no such representatives, to the employees themselves, and to the European Works Council, where applicable.
Article 160h – paragraph 2 – point c
(c) any material change in the conditions of employment, including the conditions laid down in law and collective agreements, and the locations of the companies’ places of business;
Article 160h – paragraph 2 – point d
(d) whether the factors set out in points (a), (b) and (c) also relate to any subsidiaries, branches or controlled undertakings according to art 3 of Directive 2009/38/EC of the company being divided.
Article 160h – paragraph 2 – point d a (new)
(d a) the implications of the cross- border conversion for members;
Article 160h – paragraph 2 – point d b (new)
(d b) where appropriate, information on the procedures by which arrangements for the involvement of employees in the definition of their rights to participation in the converted company are determined pursuant to Article 160j and on the possible options for such arrangements;
Article 160h – paragraph 2 – point d c (new)
Article 160h – paragraph 2 – point d d (new)
Article 160h – paragraph 3
3. The report referred to in paragraph 1 shall be made available, at least electronically, to the representatives of the employees of the company being divided or, where there are no such representatives, to the employees themselves, and to the European Works Council, where applicable, not less than two months before the date of the general meeting referred to in Article 160k. The report shall also be made similarly available to the members of the company being divided.
Article 160h – paragraph 3 a (new)
3 a. The European Works Councils, where applicable, the national employee representation bodies and the trade unions represented in the company shall have appropriate resources to conduct a thorough analysis on the report.
Article 160h – paragraph 4 a (new)
4 a. The Executive management or the administrative organ of the company which intends to carry out the cross- border conversion, shall provide a motivated and written response to the employee opinion before the date of the general meeting referred to in Article 160k.
Article 160h – paragraph 5
5. However, where the company being divided and all of their subsidiaries, if any, have no employees, other than those who form part of the management or administrative organ, the report referred to in paragraph 1, shall not be required.deleted
Article 160i – title
Article 160i Examination by an independent experts
Article 160i – paragraph 1 – subparagraph 1
Member States shall ensure that the company being divided applies to the competent authority, designated in accordance with Article 160o(1), not less than two months before the date of the general meeting referred to in Article 160k, to appoint antwo experts to examine and assess the draft terms of cross-border division and the reports referred to in Articles 160g and 160h, subject to the proviso set out in paragraph 6 of this Article.
Article 160i – paragraph 2
2. The competent authority shall appoint antwo independent experts within five working days ofone month from the application referred to in paragraph 1 and the receipt of the draft terms and reports. The experts shall be independent from the company being divided and may be a naturappointed on the basis of a pre-selected list that was specifically established for the purpose of assessing cross-border divisions. The list shall include natural persons on the basis of their personal expertise. The fields of expertise to be reflected in the list should include at least company law, taxation and fiscal law, social security and workers’ rights. Together, the two independent experts shall cover all of the fields of expertise mentioned in this paragraph. An expert may operate on his or her own behalf or on behalf orf a legal person depending upon the law of the Member State concerned. Member States shall define fixed rates for the fees paid to the independent experts, which shall be paid by the company applying for the division. The experts shall be independent from the company carrying out the cross-border division. Member States shall take into account, in assessing the independence of the experts, the framework established in Articles 22 andto 22b of Directive 2006/43/EC. In addition: (a) the experts or the legal person on whose behalf he or she is operating, shall not have performed work, in whatever capacity, for the company applying for the conversion in the five years prior to his or her appointment or vice versa; and (b) the two experts appointed shall not operate on behalf of the same legal person.
Article 160i – paragraph 3
3. The expert shall draw up a written report within two months after his or her appointment, providing at least:
Article 160i – paragraph 3 – point f
(f) a description of all factual elements necessary for the competent authority designated in accordance with Article 160o(1), to carry out an in-depth assessment to determine whether the intended cross-border division constitutes an artificial arrangement in accordance with Article 160p, at a minimum the following: (i) the characteristics of the establishments in the destination Member States concerned of the recipient companies, including the intent, the sector, the investment, the net turnover and profit or loss, (ii) the number of employees, the composition of the balance sheet, working in the country of destination, the number of employees working in another country grouped according to the country of work, the number of employees posted or sent in the year prior to the conversion within the meanings of Regulation (EC) No 883/2004 and Directive96/71/EC, the number of employees working simultaneously in more than one Member State within the meaning of Regulation (EC) No 883/2004, (iii) the tax residence, (iv) the assets and their location, (v)the habitual place of work of the employees and of specific groups of employees, (vi) the places where social contributions are due and; (vii) the commercial risks assumed by the company being divided in the Member States of the recipient companies. nverted company in the destination Member State and the departure Member State (viii) the composition of the balance sheet and of the financial statement in the destination member state and in all member States in which the company operates in the last two fiscal years.
Article 160i – paragraph 3 a (new)
3 a. Whenever relevant, the independent experts shall ask questions to and receive information from the competent authority of the destination Member State. The competent authority shall ensure communication between the independent expert and other authorities in that Member State responsible for any of the areas touched upon by this Directive.
Article 160i – paragraph 5
5. Member States shall ensure that information submitted to the independent expert can only be used for the purpose of drafting the report and that confidential information, including business secrets, shall not be disclosed. Where appropriate, the expert may submit a separate document containing confidential information to the competent authority designated in accordance with Article 160o(1) and that separate document shall only be made available to the company being divided and not be disclosed to any third party.
Article 160i – paragraph 6
6. Member States shall exemptmay apply lower independent expert fees for micro and small enterprises as defined in Commission Recommendation 2003/361/EC (**) from the provisions of this Article.
Article 160k – paragraph 1
1. After taking note of the reports referred to in Articles 160g, 160h and 160i, where applicable, the general meeting of the company being divided shall decide by means of a resolution, whether to approve the draft terms of cross-border division. Prior to taking a decision, all applicable information and consultation rights have to be met in a way and at such a time that an opinion by the employees can be taken into consideration. The company shall inform the competent authority designated in accordance with Article 160o(1) of the decision of the general meeting.
Article 160n – paragraph 1
1. Without prejudice to paragraph 2, each recipient company shall be subject to the rules in force concerning employee participation, if any, in the Member State where it has its registered office.deleted
Article 160n – paragraph 2
2. However, the rules in force concerning employee participation, if any, in the Member State where the company resulting from the cross-border division has its registered office shall not apply, where the company being divided, in the six months prior to the publication of the draft terms of the cross-border division as referred to in Article 160e of this Directive, has an average number of employees equivalent to four fifths of the applicable threshold, laid down in the law of the Member State of the company being divided, which triggers the participation of employees within the meaning of point (k) of Article 2 of Directive 2001/86/EC, or where the national law applicable to each of the recipient companies does not: (a) provide for at least the same level of employee participation as operated in the company being divided prior to the division, measured by reference to the proportion of employee representatives amongst the members of the administrative or supervisory organ or their committees or of the management group which covers the profit units of the company, subject to employee representation; or (b) provide for employees of establishments of the recipient companies that are situated in other Member States the same entitlement to exercise participation rights as is enjoyed by those employees employed in the Member State where the recipient company has its registered office.deleted
Article 160n – paragraph 3
3. In the cases referred to in paragraph 2, theThe information, consultation and participation of employees in the companies resulting from the cross-border division and their involvement in the definition of such rights shall be the object of an agreement between the employees and the management and shall be regulated by the Member States, mutatis mutandis and subject to paragraphs 4 to 7 of this Article, in accordance with the principles and procedures laid down in Article 12(2), (3) and (4) of Regulation (EC) No 2157/2001 and the following provisions of Directive 2001/86/EC:
Article 160n – paragraph 3 – point b
(b) Article 4(1), Article 4(2)(a), (b), (c), (g) and (h), Article 4(3) and Article 4(4);
Article 160n – paragraph 3 – point e
Article 160n – paragraph 3 – point g
(g) the Annex, with the exclusion of points (a) en (b) of pPart 3 of the Annex, instead of which the following will apply as a minimum: The employees of the Company, its subsidiaries and establishments and/or the representative body shall have the right to elect and appoint a number of members of the administrative or supervisory body of the converted company equal to two representatives in companies up from 50 employees, one third in companies having from 250 employees to 1000 employees and parity in companies with more than 1000 employees.
Article 160n – paragraph 3 a (new)
3 a. The agreement reached shall provide for at least the same level of employee participation as operated in the company prior to the conversion as well as at least the level that would apply following the rules in force concerning employee participation, if any, in the destination Member State. This level shall be measured by reference to the proportion of employee representatives amongst the members of the administrative or supervisory organ or their committees or of the management group which covers the profit units of the company, subject to employee representation.
Article 160n – paragraph 4
(a) shall confer on the special negotiating body the right to decide, by a majority of two thirds of its members representing at least two thirds of the employees, not to open negotiations or to terminate negotiations already opened and to rely on the rules on participation in force in the Member States of each of the recipient companies;deleted
Article 160n – paragraph 4 – point b
(b) may, in the case where, following prior negotiations, standard rules for participation apply and notwithstanding such rules, decide to limit the proportion of employee representatives in the administrative organ of the recipient companies. However, if in the company being divided the employee representatives constituted at least one third of the administrative or supervisory board, the limitation may never result in a lower proportion of employee representatives in the administrative organ than one third;deleted
Article 160n – paragraph 4 – point c
(c) shall ensure that the rules on participation that applied prior to the cross- border division continue to apply until the date of application of any subsequently agreed rules or in the absence of agreed rules until the application of default rules in accordance with point (ag) of Ppart 3 of the Annexagraph 3.
Article 160n – paragraph 5
5. The extension of participation rights to employees of the recipient companies employed in other Member States, referred to in point (b) of paragraph 2, shall not entail any obligation for Member States which choose to do so to take those employees into account when calculating the size of workforce thresholds giving rise to participation rights under national law.deleted
Article 160n – paragraph 7
7. Where the company resulting from the cross-border division is operating under an employee participation system, that company shall be obliged to take measures to ensure that employees' participation rights are protected in the event of any subsequent cross-border or domestic merger, division or conversion for a period of threen years after the cross-border division has taken effect, by applying, mutatis mutandis, the rules laid down in paragraphs 1 to 6.
Article 160o – paragraph 1
1. Member States shall designate the national authority competent to scrutinise the legality of the cross-border divisions as regards the part of the procedure which is governed by the law of the Member State of the company being divided, and to issue a pre-division certificate attesting compliance with all relevant conditions, and the proper completion of all procedures and formalities in that Member State. The competent authority shall set up appropriate coordination mechanisms with other authorities and bodies in that Member State working in the policy fields covered by this Directive.
Article 160o – paragraph 2 – point b
(b) the reports referred to in Articles 160g, 160h and 160i, as appropriate, and including the employees’ opinion and response of the management;
Article 160p – paragraph 1 – subparagraph 1
Member States shall ensure in order to assess whether the cross-border division constitutes an artificial arrangement within the meaning of Article 160d(3) of this Directive, the competent authority of the company being divided shall carry out an in-depth assessment of all relevant facts and circumstances and shall take into account at a minimum the following: (i) the characteristics of the establishment in the destination Member States concerned, including the intent, the sector, the investment, the net turnover and profit or loss, (ii) the number of employees, working in the country of destination, the number of employees working in another country grouped according to the country of work, the number of employees posted in the year prior to the conversion within the meanings of Regulation (EC) No 883/2004and Directive 96/71/EC, the number of employees working simultaneously in more than one Member State within the meaning of Regulation (EC) No 883/2004,the composition of the balance sheet, (iii) the tax residence, (iv) the assets and their location, (v) the habitual place of work of the employees and of specific groups of employees,(vi) the places where social contributions are due, (vii) and the commercial risks assumed by the company being divided in the Member State of that company and Member States of recipient companienverted company in the destination Member State and the departure Member State., and (viii)the composition of the balance sheet and of the financial statement in the destination member state and in all member States in which the company operates in the last two fiscal years.
Article 160p – paragraph 1 – subparagraph 2 a (new)
Where relevant, the competent authority shall ask questions to and receive information from the competent authority of the other Member State. The competent authority shall ensure communication between the independent expert and other authorities in that Member State responsible for any of the areas touched upon by this Directive.
Article 160p – paragraph 2
2. Member States shall ensure that where the competent authority referred to in paragraph 1 of this Article decides to carry out an in-depth assessment, it is able to hear the company and all parties that have submitted observations pursuant Article 160j(1) in accordance with national law. The competent authorities referred to in paragraph 1 may also hear any other interested third parties in accordance with national law. The competent authority shall take its final decision regarding the issue of the pre-division certificate within twofive months from the start of the in-depth assessment.
Article 160r – paragraph 1
Member States shall designate an authority competent to scrutinise the legality of the cross-border divisions as regards that part of the procedure which concerns the completion of the cross-border division governed by the law of the Member States of the recipient companies and to approve the cross-border division where it complies with all the relevant conditions and all the procedures and formalities in that Member State have been properly completed. The competent authority shall set up appropriate coordination mechanisms with other authorities and bodies in that Member State working in the policy fields covered by this Directive.
Article 160w – paragraph 2 (new)