Following the Cartesio judgement, in 2012, the Czech Republic adopted provisions allowing the cross-border transfer of a company’s registered office. Not many other EU/EEA countries have followed this example. However, one of the positive exceptions is Spain.
Czech lawmakers usually take their time when it comes to implementing an EU Directive. Nevertheless, in the case of the 14th Company Law Directive, they have decided to comply with the wishes expressed by the European Parliament and amended the Act on Transformations of Commercial Corporations and Cooperatives (hereinafter the “ZPřem”). This amendment permits the cross-border transfer of a company’s registered office between EU/EEA member states. Please note that, under Czech law, when referring to a “company”, cooperatives are included in this term.
On the Spanish side, Law 3/2009 of 3 April 2009, on Structural Modifications of Commercial Companies (hereinafter the “LME”) regulates cross-border transfers. More specifically, Title V on the international transfer of registered offices. According to its preamble, Spanish lawmakers were responding to Article 8 of the Council Regulation (EC) No. 2157/2001, on the Bylaws for a European company (SE) – (hereinafter the “Regulation”), which permits the transfer of a registered office of an SE to another Member State. This provision stipulated that such transfers shall not result in the winding up of a SE or in the creation of a new legal person.
Transfer to Spain
In general, Czech arrangements reflect almost exactly the requirements of Article 8 of the Regulation. ZPřem forbids a transfer in the case of a company in liquidation or when an insolvency proceeding has been initiated.
An important part of the transfer is the transfer proposal. In the case of an office transfer, the period for publishing the proposal is two months, one month longer than in the case of other transformations under Czech law. Besides other standard requirements, the proposal must also reflect the involvement of employees and the rights provided for the protection of shareholders and creditors. It is important to keep in mind that unlike in the Czech Republic, the Spanish commercial law requires the obligatory involvement of employees. Entrepreneurs should also be aware of Spanish labour law for the protection of employees.
When transferring a company´s office from the Czech Republic to Spain, it is important to remember that, contrary to the alternative given by Czech law, Czech law cannot manage the internal structure of the transferred company. The new recodification of Czech civil law accepted the continuity of the incorporation theory. However, Spanish law holds the real office theory, resulting in Spanish legislation forbidding such eventuality.
Moreover, for a successful transfer, two notary deeds are required: one, for attesting to the completion of the acts and formalities in the Czech Republic and the second for the company´s registration in Spain. The transfer of a registered office and the consequent amendment of its bylaws take effect on the date the company is registered in the Spanish Commercial Register (Registro Mercantil).
Transfer to Czech Republic
There are few essential conditions under which the transfer to the Czech Republic can be carried out. ZPřem places emphasis on the conservation of authorized capital. If the subscribed capital is not paid at the time the company is transferred, Czech law will regulate the period to do so. Similarly, the registered capital of capital companies (a limited-liability company and a joint-stock company) must be valued by expert opinion.
After the transfer, the company must change its legal type to a Czech company or cooperative. In addition, the bylaws and internal relations of the company will be subject to Czech law. Similarly to the Czech provision, the LME forbids the transfer of a company in liquidation or in a state of insolvency.
The company will be registered in the commercial register upon presenting a notary deed (notářské osvědčení). A Czech notary will issue the deed upon presentation of a notary deed from Spain that attests to the completion of the acts and formalities and which is not older than six months. The transfer of a registered office and the consequent amendment of a company’s bylaws take effect on the date the company is registered in the Czech Commercial Register (Obchodní rejstřík).
To conclude, the Czech-Spanish laws governing the cross-border transfer of a company´s registered office can be appreciated for its complementarity. The provisions are clear and there should not be any doubt regarding its interpretation.
On the other hand, the situation concerning described cross-border mobility types in other European countries is not satisfactory. As of 2015, only 11 EU/EEA countries allow the cross-border transfer of a company´s office (besides the Czech Republic and Spain: Belgium, Cyprus, Greece, Iceland, Italy, Luxembourg, Malta, Portugal and Slovakia). Furthermore, taking into account the most recent Commission’s consultation regarding the issue of the 14th Company Law Directive, which was held in early 2013, there is still no satisfactory solution in sight.
This article is not considered as legal advice