Council of Ministers approves preliminary draft law to modify the rules for cross-border conversions, mergers and divisions
18/01/23
On 23 December 2022, the Council of Ministers approved the preliminary draft law to amend the rules for cross-border conversions, mergers and divisions (https://news.belgium.be/nl/wetswijziging-voor-grensoverschrijdende-omzettingen-fusies-en-splitsingen-van-ondernemingen).
The preliminary draft law aims to transpose EU Directive 2019/2121 of 27 November 2019 (‘the Directive’) into Belgian law. According to the Directive, the ultimate deadline for transposition into local law is 31 January 2023. However, we have been informed by the Minister of Justice that this deadline will not be met. The draft law is currently still under review with the Council of State, and only after it has been reviewed by the Council will it be submitted to the Chamber for approval.
To be on the safe side, companies that have already planned cross-border transactions could consider filing merger, demerger or conversion proposals with the clerk's office before the end of this month.
For transactions where the conversion, merger or division proposal is filed after 1 February 2023, legal uncertainty will exist: should companies already (try to) apply the new rules as included in the Directive, or is it sufficient to follow the existing Belgian rules? Will it even be possible to ‘voluntarily’ apply the provisions of the Directive, e.g. will a notary be willing to issue a ‘pre-conversion certificate’, in the absence of a Belgian legal framework? Will shareholders or employees be entitled to derive rights from the Directive, if it has not been transposed in a timely manner, e.g. could a shareholder that votes against a cross-border merger, demand the payment of an exit share?
It is clear that untimely transposition will lead to various legal questions, which will need to be addressed on a case-by-case basis.
Please feel free to reach out to Bart Vanstaen, Laura Schuurmans or Joni Van Wessel if you have any questions.
Joni Van Wessel
