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Cross-border company migration in the EU: Transfer of registered office (conversion) – the last piece of the puzzle? Case C-106/16 Polbud, EU:C:2017:804

On 25 October 2017 the Court of Justice of the European Union (CJEU) provided for a preliminary ruling in its Polbud judgment concerning a cross-border company conversion. This conversion had to be accomplished by transferring the company’s registered office from one EU Member State to another. The Court’s ruling – first, that such a transfer, whether or not involving at the same time the company’s headquarters or economic conduct, falls within the ambit of Articles 49 and 54 of the Treaty of the Functioning of the European Union (TFEU) on freedom of establishment, and, second, that legislative measures imposed on the migrating company by the Member State of origin entailing the winding-up of the company on the conclusion of a liquidation procedure are precluded – deserves approval. The Polbud judgment not only provides for clarity but also further completes the options of cross-border migration operations for companies and firms. At the same time, however, the Court’s ruling demonstrates the need to establish uniform legislative standards at the EU level, safeguarding the interests of all company stakeholders under the reign of Article 52 subsection 2 litera (g) TFEU. Both the experience with Directive 2005/56/EC on cross-border mergers and, from the late eighties of last century onwards, various initiatives having resulted in consecutive ‘pre-drafts’ for a Cross-border Company Migration Directive, may serve as guideline for further harmonisation in the field related. It is now for the Commission to take action, seeking a proper balance between the potentially diverging interests of all company stakeholders.