European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

The object of the Sixth Directive No 82/891 , replaced by Directive No 2017/1132,  which governs divisions by acquisition, by formation of new companies and division under judicial supervision between public limited liabilities companies of a same Member State, is to ensure to members of those companies and to third parties rights equivalent to the rights granted to them by the Third Directive rel …

Divisions

The object of the Sixth Directive No 82/891 , replaced by Directive No 2017/1132,  which governs divisions by acquisition, by formation of new companies and division under judicial supervision between public limited liabilities companies of a same Member State, is to ensure to members of those companies and to third parties rights equivalent to the rights granted to them by the Third Directive relating to mergers. 

Division by acquisition consists for a company, after being wound up without going into liquidation, to transfer to several companies all its assets and liabilities in exchange for the allocation to the shareholders of the company being divided of shares in the companies receiving contributions as a result of the division (Directive No 2017/1132 Article 136(1)). Where it takes place by the formation of new companies, all its assets and liabilities are transferred by the wound-up company to newly-formed companies in exchange for the allocation to the shareholders of the company being divided of shares in the recipient companies (Article 155(1)).

Divisions by acquisition and by formation of new companies fulfill forms that are similar to those imposed on mergers: drawing-up of draft terms of division by the administrative or management bodies of the companies involved in the division (Article 137), subject to a duty of publication (Article 138), then to the approval of the general meeting of each of the companies (Article 139) ; drawing-up of reports by the administrative or management bodies of the company being divided (Article 141) and by independent experts (Article 142), intended to inform shareholders, unless they have decided otherwise for the independent experts' report ; availability to shareholders of all documents useful for their information either at the registered office, or on the website of the companies concerned (Article 143). For claims antedating the division, Article 12 guarantees the creditors' right by setting-up a joint and several liability of the recipient companies when one of them has not fulfilled an obligation transferred to it due to the division. Moreover, joint and several liability of the recipient companies for the obligations of the company being divided may also be provided for by the Member States. Any formal irregularity of the division is penalized by nullity in accordance with the restrictive model of the Third Directive (Article 153). 

Lastly, division under supervision of a judicial authority is a specific transaction subject to supervision by a judicial authority which has the power to call a general meeting of the shareholders of the company being divided, as well as any meeting of creditors of each of the companies involved in order to decide upon the division and to approve the draft terms of division (Article 157). After establishing that the shareholders and creditors suffer no prejudice, the judicial authority may relieve the companies involved in the division from applying certain rules laid down for division by acquisition and by formation of new companies regarding information.

Sixth Council Directive No 82/891/EEC of 17 December 1982 based on Article 54 (3) (g) of the Treaty, concerning the division of public limited liability companies, OJ L 378 of 31.12.1982, 47.

Directive No 2017/1132 of 14 June 2017 relating to certain aspects of company law, OJ L 169 of 30 June 2017.

Article 150 also requires that the publication of the division be made in the manner prescribed by the rules in the First Directive.

European Business Law

204. Divisions

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Les notions juridiques connexes

204. Divisions

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Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise