CROSS BORDER CONVERSION AND MERGER (part 2)
Transfer of the seat
The cross-border conversion was already known in the past as the doctrine of the transfer of the seat. Just a few words about this.
The transfer of seat had been regulated in the Transfer of Seat to Third Countries Ordinance (Landsverordening zetelverplaatsing derde landen). This Ordinance was repealed as from 1 March 2004 onwards; this system has been replaced by the cross-border conversion system. However, see Section II of the Repair Act of 24 December 2004, P.B. 2004, 198, which revives this Ordinance for certain companies: in the event that a public limited company (NV) had, in its articles of association on 1 March 2004, the possibility of transferring its seat as laid down in this Ordinance, this Article can still be made use of on the condition that the articles of association (still or again) provide for this.
So say for instance that a public limited company still had this option in its articles of association on 1 March 2004, but that provision was later deleted, that provision can be put back upon any next amendment to the articles of association. So the only criterion is whether the public limited company had this provision in its articles of association on 1 March 2004 and obviously at the moment that it wants to make use of this provision.
Therefore pursuant to the Transfer of Seat to Third Countries Ordinance as from 1 March 2004 onwards only emigration of the said public limited companies can take place. It is only possible to emigrate to countries permitting such transfers. Because this involves ‘third countries’ a transfer of seat cannot relate to a transfer within the Kingdom. The contents of the provisions are not further discussed here.
It is only noted that at the time – before 1 March 2004 – consent from the Minister of Justice was required for incorporating this form of transfer of seat into the articles of association of a public limited company (NV). A public limited company which had this option in its articles of association on 1 March 2004 but which removed this provision at a later stage, can include this provision again without the consent of the Minister of Justice being required. In the past this consent was linked to the provisions in the Commercial Code which required the ‘certificate of no objection’ for any amendment to the articles of association; this provision has been abolished. (To be continued)
Karel Frielink
Attorney (Lawyer) / Partner
(15 February 2013)
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