On 27 March, the European Commission sent letters of formal notice to several EU member states for their delays in transposing various directives. Spain received three of these letters. One of them, the one we are going to deal with in this article, concerns the 2019 mobility directive on cross-border transformations, mergers and divisions. This is the first step in a process that could end with the European Commission issuing proceedings and fining Spain for its delay.
Índice
Objectives of the 2019 mobility directive
The 2019 mobility directive on cross-border transformations, mergers and divisions (Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019) amends an earlier one from 2017. In the context of an increasing internationalisation of economic operators, its objectives are:
- Streamlining and making more transparent cross-border business mergers within Europe that give rise to new transnational European companies.
- Provide more information and assurances to employees and shareholders.
- To facilitate and simplify legal work when analysing the structural modification operations of commercial companies.
- Promote mobility within the EU in order to improve the functioning of the internal market.
Whereas Directive (EU) 2017/1132 contained only rules on domestic divisions of public limited liability companies, the new Directive (EU) 2019/2121 extends cross-border regulation also to partial and complete transformations and divisions involving the formation of new companies.
In Spain, the bill still has to pass through Congress and the Senate
The deadline for transposing this directive into Spanish law expired on 31 January. But Spain is running late. A draft bill to reform the law on structural modifications of commercial companies was approved on 14 February, but it still has to go through the entire parliamentary process in Congress and the Senate. Realistically, it is highly unlikely to achieve this in an election year such as 2023. In July and August there will be no sessions and the Cortes will be dissolved in October at the latest.
Following the mobility directive that it transposes, the draft bill seeks to establish a harmonised legal framework for cross-border company mergers in Europe. Its purpose is to regulate structural modifications, both internal and cross-border, of commercial companies consisting of transformation, merger, demerger and global transfer of assets and liabilities.
Widespread dealy in EU member states
Spain was not the only country to be notified for the delay in transposing this directive. Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, France, Greece, Ireland, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia and Slovenia have also received this first warning.
After this first letter of formal notice, if Spain continues to delay in transposing the mobility directive, the European Commission may initiate Community proceedings. In such cases, the country concerned usually has two months from this point to communicate its position. If Brussels considers that the directive has not been transposed into national law, then the case is initiated.
The state concerned then has a further two months to report on the transposition measures. If it persists in non-compliance, the Commission reserves the right to refer the matter to the Court of Justice of the European Union to impose sanctions. In Spain’s case, this would not be the first time it has gone to court over a delay in transposing a European directive. For example, last year we already saw it for the delay in the transposition of the audiovisual directive.