S.I. No. 233/2023 - European Union (Cross - Border Conversions, Mergers and Divisions) Regulations 2023

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 26th May, 2023.

I, SIMON COVENEY, Minister for Enterprise, Trade and Employment, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017¹ and Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019² , and for the purpose of giving further effect to Article 8 of Directive 2008/104/EC of the European Parliament and of the Council of 19 November 2008³ , hereby make the following regulations:

PART 1 Preliminary and General

Citation, commencement and construction

1.

• (2) These Regulations shall, subject to paragraph (3), come into operation on the day they are made.

• (3) The following Regulations shall come into operation on the 26^th day of May 2023:

• (a) Regulations 9(9), (10) and (13), 11, and 21(4);

• (b) Regulations 30(4) in so far as it relates to Regulation 9(9), (10) and (13);

• (c) Regulations 32 and 44(4);

• (d) Regulation 54 in so far as it relates to Regulation 9(9), (10) and (13);

• (e) Regulations 56, 66(4), 91(2) and 91(5).

• (4) The Act of 2014 and these Regulations shall be construed together as one.

Interpretation

2.

“Act of 2014” means the Companies Act 2014 (No. 38 of 2014);

“company” means an Irish company or an EEA company;

“converted company” has the meaning assigned to it by Regulation 4;

“converting company” has the meaning assigned to it by Regulation 4;

“Court”, other than in Part 5, means the High Court;

“cross-border conversion” has the meaning assigned to it by Regulation 4;

“cross-border division” has the meaning assigned to it by Regulation 49;

“cross-border merger” has the meaning assigned to it by Regulation 25;

“Directive” means Directive 2017/1132 of the European Parliament and of the Council of 14 June 20171 as amended by Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019⁴ , Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019⁵ , Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 20192 and Regulation (EU) 2021/23 of the European Parliament and of the Council of 16 December 2020⁶ ;

“dividing company” has the meaning assigned to it by Regulation 49;

“document” includes information;

“EEA company” means a body corporate which is incorporated in an EEA state other than the State, which –

• (a) is of a type listed in Annex II of the Directive, or

• (b) in the case of a cross-border merger –

• (i) is of that type, or

• (ii) has share capital and legal personality, and possesses separate assets which alone serve to cover its debts and that is subject, under the national law governing it, to conditions concerning guarantees such as are provided for by Section 2 of Chapter II of Title I and Section 1 of Chapter III of Title I of the Directive for the protection of the interests of members and others;

“EEA register”, in relation to an EEA state, means the register maintained by that state in accordance with Article 16 of the Directive;

“EEA state” means a state that is a contracting party to the EEA Agreement (subject to Regulation 3(3));

“employees’ representatives”, in relation to a company, means the representatives elected or appointed in respect of the company for the purposes of these Regulations or, where there are no such representatives, the employees themselves;

“enactment” has the same meaning as it has in section 2 of the Interpretation Act 2005 (No. 23 of 2005);

“interconnection system” means the system of interconnection of registers established in accordance with Article 22 of the Directive;

“Irish company” means a limited company within the meaning of the Act of 2014;

“Irish merging company” has the meaning assigned to it by Regulation 25;

“pre-conversion certificate” has the meaning assigned to it by Regulation 4;

“recipient company” has the meaning assigned to it by Regulation 49;

“relevant authority” means –

• (a) a Department of state,

• (b) a local authority,

• (c) a person, body or organisation established –

• (i) by or under any enactment (other than the Act of 2014 or a former enactment relating to companies within the meaning of section 5 of that Act), or

• (ii) under the Act of 2014 or a former enactment relating to companies within the meaning of section 5 of that Act, in pursuance of powers conferred by or under another enactment and financed wholly or partly, whether directly or indirectly, by means of moneys provided, or loans made or guaranteed, by a Minister of the Government or shares held by or on behalf of a Minister of Government,

and includes the Central Bank of Ireland and any Minister of the Government or Minister of State;

“successor company” has the meaning assigned to it by Regulation 25;

“transferor company” has the meaning assigned to it by Regulation 25.

• (2) A word or expression that is used in these Regulations (or in any enactment amended by these Regulations) and is also used in the Directive shall, unless the context otherwise requires, have the same meaning in these Regulations (or that enactment) as it has in the Directive.

• (3) For the purposes of these Regulations, an agency worker to whom the Protection of Employees (Temporary Agency Work) Act 2012 (No. 13 of 2012) applies shall, for the duration of the agency worker’s assignment with a hirer (within the meaning of that Act), be treated as being employed by the employment agency concerned, and accordingly references in these Regulations to a contract of employment shall, as respects any such agency worker, be construed as including references to a contract of employment within the meaning of that Act, and for those purposes –

• (a) “agency worker” means an agency worker to whom the Protection of Employees (Temporary Agency Work) Act 2012 applies, and

• (b) “agency worker information” means information as respects –

• (i) the number of agency workers temporarily engaged to work for the employer,

• (ii) those parts of the employer’s business in which those agency workers are, for the time being, working, and

• (iii) the type of work that those agency workers are engaged to do.

Application

3.

• (a) is in liquidation and has begun to distribute assets to its members, or

• (b) is subject to the resolution tools, powers and mechanisms provided for in Title IV of Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014⁷ establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council or in Title V of Regulation (EU) 2021/23 of the European Parliament and of the Council of 16 December 2020⁸ on a framework for the recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No 806/2014 and (EU) 2015/2365 and Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132.

• (2)
• (a) These Regulations shall not apply to a cross-border conversion, cross-border merger or cross-border division involving a company the object of which is the collective investment of capital provided by the public which operates on the principle of risk-spreading and the units of which are, at the holders’ request, repurchased or redeemed, directly or indirectly, out of the assets of that company.

• (b) Action taken by a company referred to in subparagraph (a) to ensure that the stock exchange value of its units does not vary significantly from its net asset value shall be regarded as equivalent to the repurchase or redemption of its units referred to in that subparagraph.

• (3) In the application of these Regulations before the Directive is incorporated into and has come into operation in respect of the EEA Agreement, a reference to an EEA state is to be construed as a reference to a Member State.

PART 2 Cross-Border Conversions

Chapter 1 Preliminary and General

Interpretation (Part 2)

4.

“converted company”, in relation to a cross-border conversion, means a company that is formed in a destination EEA state as a result of the cross-border conversion;

“cross-border conversion” means an operation whereby a company, without being dissolved or wound up or going into liquidation, converts the legal form under which it is registered in a departure EEA state into a legal form of a destination EEA state listed in Annex II of the Directive and transfers at least its registered office to the destination EEA state, while retaining its legal personality;

“departure EEA state”, in relation to a cross-border conversion, means the EEA state in which the converting company is registered prior to the cross-border conversion;

“destination EEA state”, in relation to a cross-border conversion, means the EEA state in which the converted company is registered or proposed to be registered as a result of the cross-border conversion;

“effective date” means –

• (a) in relation to a cross-border conversion in which the proposed converted company is an Irish company, the date specified under Regulation 20(6), or

• (b) in relation to a cross-border conversion in which the proposed converted company is an EEA company, the date determined in accordance with the law of the EEA state concerned for the purposes of Article 86q of the Directive;

“Irish converted company” means a converted company that is an Irish company;

“Irish converting company” means a converting company that is an Irish company;

“pre-conversion certificate” means –

• (a) in relation to a cross-border conversion in which the converting company is an Irish company, a pre-conversion certificate issued by the Court under Regulation 17(1), or

• (b) in relation to a cross-border conversion in which the converting company is an EEA company, a certificate issued for the purposes of Article 86m(1) of the Directive;

“pre-conversion requirements” has the meaning assigned to it by Regulation 17(19).

Application (Part 2)

5.

• (2) Where a cross-border conversion is proposed to be carried out by an Irish converting company –

• (a) the law of the State shall apply in relation to the cross-border conversion until a pre-conversion certificate is issued in respect of the conversion, and

• (b) the law of the destination EEA state shall apply in relation to the cross-border conversion after a pre-conversion certificate is issued in respect of the conversion.

• (3) Where a cross-border conversion is proposed to be carried out and the proposed converted company to which the cross-border conversion relates is an Irish company –

• (a) the law of the departure EEA state shall apply in relation to the cross-border conversion until a pre-conversion certificate is issued in respect of the conversion, and

• (b) the law of the State shall apply in relation to the cross-border conversion after a pre-conversion certificate is issued in respect of the conversion.

Chapter 2 Pre-conversion Requirements

Application (Chapter 2 of Part 2)

6.

Cross-border conversions: draft terms

7.

• (2) The draft terms shall include –

• (a) in relation to the Irish converting company –

• (i) its legal form and name, and

• (ii) the location of its registered office in the State,

• (b) in relation to the proposed converted company, the particulars specified in subparagraph (a) that are proposed in respect of that company,

• (c) the draft instrument of constitution or equivalent document, and any associated documents, of the proposed converted company in the destination EEA state,

• (d) the proposed indicative timetable for the cross-border conversion,

• (e) the rights to be conferred by the proposed converted company on members enjoying special rights or on holders of securities other than shares representing the company capital, or the measures proposed concerning them,

• (f) any safeguards offered to creditors, such as guarantees or pledges,

• (g) any special advantages to be granted to members of the administrative, management, supervisory or controlling body of the Irish converting company,

• (h) details as to whether any incentives or subsidies were received by the Irish converting company in the State in the 5 years preceding the date on which the draft terms are drawn up,

• (i) details of the proposed cash compensation payable in response to requests made under Regulation 15(1),

• (j) the likely effect of the cross-border conversion on employment,

• (k) the agency worker information in relation to the converting company, and

• (l) where appropriate, information on the procedures by which arrangements for the involvement of employees in the definition of their rights to participation in the proposed converted company are determined pursuant to Part 5.

Cross-border conversions: directors’ explanatory report

8.

• (a) explain and justify the legal and economic aspects of the cross-border conversion,

• (b) explain the implications of the cross-border conversion for employees, and

• (c) explain the implications of the cross-border conversion for the future business of the company.

• (2) A report drawn up under this Regulation shall be made available electronically, together with the draft terms if available, to –

• (a) the members of the Irish converting company, and

• (b) the company’s employees’ representatives,

not less than 6 weeks before the date of the general meeting referred to in Regulation 14.

• (3) The report shall, subject to paragraph (4), include a section for members that includes the information referred to in paragraph (5) and a section for employees that includes the information referred to in paragraph (7).

• (4) The board of directors may draw up 2 separate reports, one for members including the section for members and another for employees including the section for employees.

• (5) The section for members shall, in particular, explain –

• (a) the cash compensation payable in accordance with Regulation 15 and the method used to determine the cash compensation,

• (b) the implications of the cross-border conversion for members of the Irish converting company, and

• (c) the rights and remedies available to members of the Irish converting company in accordance with Regulation 15.

• (6) The section for members shall not be required where every member of the Irish converting company has agreed to waive that requirement.

• (7) The section for employees in the report shall, in particular, explain –

• (a) the implications of the cross-border conversion for employment in the Irish converting company, including in relation to employment relationships and any measures for safeguarding those relationships, organisation of work, and company-level social dialogue including any board-level employee representation,

• (b) any material changes to the conditions of employment of employees of the Irish converting company,

• (c) any material changes to the location of any place of business of the Irish converting company or to the location of specific posts in the company, and the expected consequences for employees occupying such posts, and

• (d) how the matters referred to in subparagraphs (a) to (c) affect any subsidiaries of the Irish converting company.

• (8) The conditions of employment referred to in paragraph (7) shall include conditions of employment which apply by law and under any applicable collective agreement or transnational company agreement.

• (9) Where the board of directors of an Irish converting company receives an opinion from the employees’ representatives on the information referred to in paragraphs (1) and (7) within a reasonable period of time prior to the general meeting –

• (a) the members shall be informed of the opinion, and

• (b) the opinion shall be appended to the report, or reports as the case may be.

• (10) The section for employees in the report shall not be required where the Irish converting company and its subsidiaries, if any, do not have any employees other than the board of directors.

• (11) A report shall not be required under this Regulation where the section for members in the report is not required under paragraph (6) and the section for employees in the report is not required under paragraph (10).

• (12) This Regulation is without prejudice to the Employees (Provision of Information and Consultation) Act 2006 (No. 9 of 2006) and the Transnational Information and Consultation of Employees Act 1996 (No. 20 of 1996).

Cross-border conversions: expert’s report

9.

• (2) The report shall be drawn up by a person or persons (in this Regulation referred to as the “expert”), being a qualified person or persons, as the case may be, appointed for the Irish converting company by its directors.

• (3) A person is a qualified person for the purposes of this Regulation if that person –

• (a) is a statutory auditor, and

• (b) is not –

• (i) a person who is or, within the period of 12 months before the date of the draft terms, has been an officer or employee of the Irish converting company,

• (ii) a parent, spouse, civil partner, brother, sister or child of an officer of the Irish converting company, or

• (iii) a person who is a partner, or in the employment, of an officer or employee of the Irish converting company.

• (4) A reference in paragraph (3)(b)(ii) to a child of an officer of the Irish converting company shall be deemed to include a child of the officer’s civil partner who is ordinarily resident with the officer and the civil partner.

• (5) The report referred to in paragraph (1) shall be in writing and shall –

• (a) state the method or methods used to determine the proposed cash compensation payable in accordance with Regulation 15,

• (b) state –

• (i) whether the method or methods used to determine the proposed cash compensation is or are adequate for the assessment of the cash compensation,

• (ii) the value arrived at using such methods, and

• (iii) an opinion on the relative importance attributed to those methods in arriving at the value decided on,

• (c) state any special valuation difficulties which have arisen, and

• (d) state the opinion of the expert as to whether the proposed cash compensation is adequate, the expert having considered any market price of the shares in the Irish converting company prior to the announcement of the proposed conversion or the value of the company excluding the effect of the proposed conversion, as determined in accordance with generally accepted valuation methods.

• (6) The opinions of the expert in the report referred to in paragraph (1) shall be impartial and objective and given with a view to providing assistance to the Court in accordance with any independence and impartiality requirements under the law of the State (including under Part 27 of the Act of 2014) and any professional standards to which the expert is subject.

• (7) Neither an examination of the draft terms by the expert, nor the expert report, shall be required where every member of the Irish converting company agrees to waive these requirements.

• (8) The expert may –

• (a) require the Irish converting company and its officers to give to the expert such information and explanations (whether oral or in writing), and

• (b) make such enquiries,

as the expert thinks necessary for the purposes of drawing up the report.

• (9) Where an Irish converting company fails, pursuant to a requirement under paragraph (8)(a), to give to the expert any information or explanation in the power, possession or procurement of that company, the Irish converting company and every officer of it who is in default shall be guilty of a category 2 offence.

• (10) Where an Irish converting company makes a statement (whether orally or in writing) or provides a document to the expert that conveys or purports to convey any information or explanation the subject of a requirement made of it under paragraph (8)(a) by the expert, and –

• (a) that information is false or misleading in a material respect, and

• (b) the company knows it to be so false or misleading or is reckless as to whether it is so false or misleading,

that company and every officer of it who is in default shall be guilty of a category 2 offence.

• (11) If a person appointed under paragraph (2) ceases to be a qualified person –

• (a) the person’s appointment under that paragraph shall immediately cease, and

• (b) the person shall give notice in writing of the person’s ceasing to be a qualified person to the Irish converting company within 14 days of so ceasing to be a qualified person.

• (12) Where a person ceases to be a qualified person in accordance with paragraph (11), this shall not affect the validity of any acts done by the person under this Regulation before ceasing to be a qualified person.

• (13) A person who purports to carry out the functions of an expert under this Regulation after ceasing to be a qualified person shall be guilty of a category 2 offence.

Cross-border conversions: civil liability of experts

10.

• (2) Without prejudice to the generality of paragraph (1), any shareholder of the Irish converting company who has suffered loss or damage arising from the inclusion of any untrue statement in the report prepared by the expert under Regulation 9 shall, subject to paragraph (3), be entitled to have such loss or damage made good to him or her by the expert.

• (3) An expert shall not be liable in the case of any untrue statement in the report if he or she proves –

• (a) that, on becoming aware of the statement, he or she forthwith informed the Irish converting company and its members of the untruth, or

• (b) that he or she was competent to make the statement and that he or she had reasonable grounds for believing and did up to the time the conversion took effect believe that the statement was true.

• (4) In this Regulation, “expert” shall be construed in accordance with Regulation 9(2).

Cross-border conversions: criminal liability for untrue statements in expert’s report

11.

• (2) In any proceedings against a person in respect of a category 2 offence under paragraph (1), it shall be a defence to prove that, having exercised all reasonable care and skill, the defendant had reasonable grounds for believing and did, up to the time of the issue of the report concerned, believe that the statement concerned was true.

• (3) In this Regulation, “expert” shall be construed in accordance with Regulation 9(2).

Cross-border conversions: registration and publication of documents

12.

• (a) a copy of the draft terms,

• (b) a notice informing the members, creditors and employees’ representatives of the Irish converting company that they may submit to the company, no later than 5 working days before the date of the general meeting, comments concerning the draft terms, and

• (c) a notice, in the form set out in Part 1 of Schedule 1.

• (2) Subject to paragraph (4), paragraph (1) shall not apply in relation to an Irish converting company where the company publishes, free of charge on its website, the documents specified in paragraph (1)(a) and (b) for a continuous period of at least 2 months which –

• (a) commences at least 30 days before, and

• (b) ends at least 30 days after,

the date fixed for the general meeting referred to in Regulation 14.

• (3) Where paragraph (2) applies in relation to an Irish converting company, the company shall deliver to the Registrar for registration, at least 30 days before the date of the general meeting referred to in Regulation 14, a notice, in the form set out in Part 1 of Schedule 1.

• (4) Where, in the period referred to in paragraph (2), access to the company’s website is disrupted for a continuous period of at least 24 hours or for separate periods totalling not less than 72 hours, the period referred to in paragraph (2) shall be extended for a period corresponding to the period or periods of disruption.

• (5) Notice of the delivery of the draft terms to the Registrar and the notice referred to in paragraph (1)(b) or, where paragraph (2) applies, the notice referred to in paragraph (3), shall be caused to be published –

• (a) by the Registrar, in the CRO Gazette, and

• (b) by the company, in a national daily newspaper,

at least 30 days before the date of the general meeting referred to in Regulation 14.

• (6) The notice published in accordance with paragraph (5) shall include:

• (a) the date of the delivery of the documents under paragraph (1) or, where paragraph (2) applies, the date of publication under that paragraph;

• (b) the matters specified in paragraph (1)(b) and (c) or, where paragraph (2) applies, the matters specified in paragraph (3).

• (7) The documents referred to in paragraphs (1) and (3) shall be accessible to the public free of charge through the register and the interconnection system.

• (8) The Registrar may charge a fee in respect of the registration referred to in paragraph (1) or (3) which shall not exceed the cost to the Registrar of providing those services.

• (9) The sole means to be used to deliver the documents referred to in paragraphs (1) and (3) to the Registrar shall be those provided for under the Electronic Commerce Act 2000 (No. 27 of 2000) effected in a manner which complies with any requirements of the Registrar of the kind referred to in sections 12(2)(b) and 13(2)(a) of that Act.

Cross-border conversions: notification to Central Bank of Ireland by certain companies

13.

Cross-border conversions: approval by general meeting

14.

• (a) the directors’ explanatory report under Regulation 8 and expert’s report under Regulation 9,

• (b) any opinion received under Regulation 8(9), and

• (c) any comments submitted in accordance with Regulation 12(1)(b).

• (2) The approval of the members may be made subject to –

• (a) the ratification of the arrangements adopted for employee participation in the converted company in accordance with Part 5,

• (b) an order of the Court under Regulation 15(4) providing for additional cash compensation,

• (c) any regulatory approval, or the satisfaction of any applicable regulatory condition, or

• (d) such other conditions as they consider appropriate in the circumstances.

• (3) Where –

• (a) a provision of the draft terms or the draft instrument of constitution of the proposed converted company would lead to an increase in the economic obligations of a member towards the company or towards a third party, and

• (b) that member is not entitled to make a request under Regulation 15(1),

that provision shall be approved by the member concerned.

• (4) The approval of the cross-border conversion by the general meeting under paragraph (1) may not be challenged by a member solely on either of the following grounds:

• (a) the cash compensation referred to in Regulation 7(2)(i) having been inadequately set;

• (b) the information given with regard to the cash compensation not having complied with these Regulations or other legal requirements.

Cross-border conversions: protection of shareholders

15.

• (2) A minority shareholder may make the request referred to in paragraph (1) by electronic means to an electronic address provided by the Irish converting company.

• (3) Where a request is made by a minority shareholder in accordance with paragraph (1), the cash compensation payable to that shareholder shall be paid within 2 months after the effective date.

• (4) Where a minority shareholder who has made a request in accordance with paragraph (1) considers that the cash compensation specified in the draft terms has not been adequately set, that shareholder may apply to the Court for additional cash compensation within 30 days after the date on which the general meeting was held.

• (5) A final decision that additional cash compensation should be paid –

• (a) shall apply to each shareholder who has made a request in accordance with paragraph (1), notwithstanding that the shareholder concerned may not have made an application under paragraph (4), and

• (b) may provide for different levels of additional cash compensation for different classes of shareholder referred to in subparagraph (a).

• (6) The courts of the State shall have exclusive competence to resolve any disputes relating to the rights referred to in this Regulation.

• (7) In this Regulation –

“final decision” means a decision of the Court under paragraph (4) or, where an appeal against the decision of the Court is brought and is not withdrawn, abandoned or otherwise not proceeded with, the decision of a court in the State against which no further appeal lies or against which an appeal lies within a period which has expired without an appeal;

“minority shareholder”, in relation to an Irish converting company, means a shareholder of the company who voted against the special resolution proposed pursuant to Regulation 14(1).

Cross-border conversions: protection of creditors

16.

• (a) is dissatisfied with the safeguards offered to creditors in the draft terms under Regulation 7(2)(f), and

• (b) can credibly demonstrate that, due to the cross-border conversion, the satisfaction of the creditor’s claim is at stake and that the creditor has not obtained adequate safeguards from the company in this regard,

the creditor may apply to the Court for adequate safeguards within 3 months of the relevant date.

• (2) Any safeguards for creditors shall be conditional on the cross-border conversion taking effect in accordance with Regulation 20(6).

• (3) Paragraphs (1) and (2) shall be without prejudice to the application of the law of the State concerning the satisfaction or securing of pecuniary or non-pecuniary obligations due to relevant authorities.

• (4) A creditor shall be permitted to institute proceedings against the company in the State within 2 years of the effective date, without prejudice to any jurisdiction rules under the law of the European Union, the law of the State or a contract.

• (5) The option to institute proceedings under paragraph (4) shall be in addition to other rules on the choice of jurisdiction that are applicable under the law of the European Union.

• (6) In this Regulation –

“creditor”, in relation to an Irish converting company, means a creditor of the company who is entitled to any debt or claim against the company on the relevant date;

“relevant date” means the date of the delivery to the Registrar under Regulation 12(1) or, where Regulation 12(2) applies, the date of the delivery to the Registrar under Regulation 12(3).

Cross-border conversions: pre-conversion certificate

17.

• (a) subject to paragraph (11), if it is satisfied that the company has complied with the pre-conversion requirements, issue a certificate (a “pre-conversion certificate”), or

• (b) if it is not so satisfied, refuse to issue such a certificate.

• (2) In making the application referred to in paragraph (1), the Irish converting company shall submit the following documents to the Court:

• (a) the draft terms under Regulation 7;

• (b) where applicable, the directors’ explanatory report under Regulation 8 and the expert’s report under Regulation 9;

• (c) any opinion received under Regulation 8(9);

• (d) any comments submitted in accordance with Regulation 12(1)(b);

• (e) information on the approval by the general meeting referred to in Regulation 14;

• (f) the number of employees of the Irish converting company at the time of the drawing up of the draft terms;

• (g) the existence of any subsidiaries of the Irish converting company and the geographical location of any such subsidiaries;

• (h) information regarding the satisfaction by the Irish converting company of any obligations to relevant authorities;

• (i) without prejudice to the generality of subparagraph (h), where the company is regulated by the Central Bank of Ireland, a copy of the notification made under Regulation 13 and any written response received to this notification from the Central Bank of Ireland in advance of the general meeting referred to in Regulation 14.

• (3) The Court may request that the information referred to in paragraph (2)(f) to (i) is provided by a relevant authority.

• (4) The application referred to in paragraph (1), including the submission of any documents or information referred to in paragraph (2), may be completed, in accordance with any applicable rules of court, by the Irish converting company online, without any requirement to appear in person before the Court.

• (5) A pre-conversion certificate issued in respect of an Irish converting company shall constitute conclusive evidence that the company has complied with the pre-conversion requirements.

• (6) The Court shall carry out the examination under paragraph (1) within 3 months of the receipt by it of the documents referred to in paragraph (2).

• (7) Where the Court is not satisfied that an Irish converting company has complied with the pre-conversion requirements, the Court may allow the Irish converting company to complete any outstanding pre-conversion requirements within an appropriate period of time.

• (8) Where the Court refuses to issue a pre-conversion certificate under paragraph (1)(b), it shall give the company the reasons for the refusal.

• (9) In respect of compliance with the rules concerning employee participation as specified in Part 5, the Court shall satisfy itself that the draft terms include information on the procedures by which the relevant arrangements are determined and on the possible options for such arrangements.

• (10) In examining the proposed cross-border conversion under paragraph (1), the Court shall consider the following:

• (a) any documents submitted to the Court under paragraph (2);

• (b) an indication by the company that the procedures referred to in Part 5 have started, where relevant.

• (11) The Court shall not issue a pre-conversion certificate under paragraph (1)(a) where it determines that the proposed cross-border conversion is being carried out –

• (a) for abusive or fraudulent purposes leading to or aimed at the evasion or circumvention of the law of the European Union or the law of the State, or

• (b) for criminal purposes.

• (12) Where the Court considers, in relation to a cross-border conversion to which an application under paragraph (1) relates, that the conversion may be being carried out for purposes referred to in paragraph (11)(a) or (b), it shall assess all of the relevant facts and circumstances on a case-by-case basis.

• (13) For the purposes of the assessment referred to in paragraph (12), the Court may consult with an independent expert.

• (14) The facts and circumstances referred to in paragraph (12) shall include, where relevant, and not to be considered in isolation, indicative factors of which the Court has become aware in the course of the examination under paragraph (1), including through consultation with relevant authorities.

• (15) Where it is necessary for the Court to take into account additional information or to carry out further enquiries for the purposes of the determination under paragraph (11) or the assessment under paragraph (12), the period of 3 months referred to in paragraph (6) may be extended by a further period of not more than 3 months.

• (16) Where, due to the complexity of the proposed cross-border conversion, it is not possible for the Court to make the determination referred to in paragraph (11) or the assessment under paragraph (12) –

• (a) before the expiry of the period of 3 months provided for in paragraph (6), or

• (b) in the case of an extension to that period under paragraph (15), before the expiry of the period of the extension,

the Irish converting company shall be given the reasons for the delay before the expiry of the applicable period referred to in subparagraph (a) or (b).

• (17) In examining a proposed cross-border conversion under paragraph (1), the Court may consult with relevant authorities having competence in different areas concerned by the proposed cross-border conversion and authorities in the destination EEA state that are considered to be relevant authorities in that state for the purposes of Article 86m of the Directive.

• (18) The Court may require the authorities referred to in paragraph (17) and the Irish converting company to provide to the Court such documents as are necessary for the purposes of the examination of the proposed cross-border conversion under paragraph (1).

• (19) In this Regulation, “pre-conversion requirements” means the applicable requirements of the preceding provisions of this Chapter and of this Regulation.

Cross-border conversions: transmission of pre-conversion certificate

18.

• (2) The Registrar shall give notice of the pre-conversion certificate to the authorities designated by each EEA state other than the State for the purposes of Article 86o(1) of the Directive through the interconnection system, free of charge.

Chapter 3 Approval in State of Cross-Border Conversions

Application (Chapter 3 of Part 2)

19.

• (a) a pre-conversion certificate has been issued in respect of a cross-border conversion, and

• (b) the proposed converted company to which the cross-border conversion relates is an Irish company.

Court examination of cross-border conversion

20.

• (a) if it is satisfied that the requirements specified in paragraph (3) have been met, make an order approving the cross-border conversion as soon as it is so satisfied, or

• (b) if not so satisfied, refuse to make an order approving the cross-border conversion.

• (2) In making the application referred to in paragraph (1), the converting company shall submit to the Court the draft terms of the cross-border conversion approved by the general meeting of that company for the purposes of Article 86h of the Directive.

• (3) The requirements referred to in paragraph (1)(a) are that –

• (a) the proposed converted company is an Irish company,

• (b) a pre-conversion certificate has been issued in respect of the converting company by the authority designated for the purposes of Article 86m(1) of the Directive by the EEA state under the law of which that company is governed,

• (c) the draft terms to which the certificate referred to in subparagraph (b) relates are the same draft terms referred to in paragraph (2), and

• (d) any arrangements for employee participation in the converted company as are required by Part 5 have been determined.

• (4) The pre-conversion certificate referred to in paragraph (3)(b) shall be accepted by the Court as conclusively attesting to the proper completion of the applicable requirements for the issuing of a pre-conversion certificate in the departure EEA state.

• (5) The application referred to in paragraph (1), including the submission of any documents or information referred to in paragraph (2), may be completed, in accordance with any applicable rules of court, by the converting company online, without any requirement to appear in person before the Court.

• (6) The Court shall specify, in an order referred to in paragraph (1)(a), the date on which the conversion is to have effect.

• (7) After the cross-border conversion has taken effect, an order made under this Regulation is conclusive evidence that –

• (a) the requirements specified in paragraph (3) have been satisfied, and

• (b) the pre-conversion requirements have been complied with.

Chapter 4

Consequences of Approval of Cross-Border Conversions

Cross-border conversions: copies of orders to be delivered to Registrar

21.

• (2) Where the Registrar receives a copy of an order of the Court under paragraph (1), the Registrar shall, within 14 days after the date of that delivery, cause to be published in the CRO Gazette notice that a copy of an order of the Court confirming the conversion has been delivered to the Registrar.

• (3) Where an order is made in respect of an Irish converting company for the purposes of Article 86o(1) of the Directive, the Irish converting company shall –

• (a) deliver a copy of that order to the Registrar for registration within 14 days after the date on which it was made, and

• (b) specify, in writing to the Registrar, the effective date.

• (4) Where a company fails to comply with paragraph (3), the company and every officer of it who is in default shall be guilty of a category 2 offence.

Cross-border conversions: action to be taken by Registrar on receipt of orders

22.

• (a) where the order was made by the Court under Regulation 20(1)(a), register the copy order in respect of the Irish converted company in the register on, or as soon as practicable after, the effective date, or

• (b) where the order was made by the authority designated by an EEA state other than the State for the purposes of Article 86o(1) of the Directive, give notice of that order as soon as practicable through the interconnection system to the authority responsible for maintaining the EEA register in which the company file for the converted company is kept, pursuant to Article 16 of the Directive, in the EEA state concerned.

• (2) The following information shall be entered by the Registrar in the register and made publicly available and accessible through the interconnection system:

• (a) where an order is made by the Court under Regulation 20(1)(a) in relation to an Irish converted company –

• (i) that the registration of the company is the result of a cross-border conversion,

• (ii) the date of registration of the Irish converted company, and

• (iii) the registration number, name and legal form of the Irish converted company;

• (b) where an order is made by an authority designated by an EEA state other than the State for the purposes of Article 86o(1) of the Directive in relation to an Irish converting company, and the Registrar has received notification of this through the interconnection system –

• (i) that the striking-off or removal of the Irish converting company from the register is the result of a cross-border conversion,

• (ii) the date of the striking-off or removal from the register of the Irish converting company, and

• (iii) the registration number, name and legal form of the Irish converting company.

• (3) Where an order is made by the Court under Regulation 20(1)(a) in relation to a cross-border conversion, the Registrar shall, through the interconnection system, notify the EEA register in the departure EEA state concerned that the cross-border conversion has taken effect.

Consequences of cross-border conversion

23.

• (a) all of the assets and liabilities, including all of the rights and obligations, of the converting company shall be those of the converted company,

• (b) all members of the converting company become members of the converted company, save for members who have made a request in accordance with Regulation 15(1),

• (c) all legal or regulatory proceedings pending by or against the converting company shall be continued with the substitution, for the converting company, of the converted company as a party,

• (d) the converted company is obliged to make to the members of the converting company any cash compensation payable in response to requests made under Regulation 15(1) or required by a Court under that Regulation,

• (e) the rights and obligations arising from contracts of employment of the converting company are transferred to the converted company,

• (f) every contract, agreement or instrument to which the converting company is a party shall, notwithstanding anything to the contrary contained in that contract, agreement or instrument, be construed and have effect as if –

• (i) the converted company had been a party thereto instead of the converting company,

• (ii) for any reference (however worded and whether express or implied) to the converting company there were substituted a reference to the converted company, and

• (iii) any reference (however worded and whether express or implied) to the directors, officers, employees’ representatives or employees of the converting company, or any of them –

• (I) were, respectively, a reference to the directors, officers, employees’ representatives or employees of the converted company or to such director, officer, employees’ representative or employee of the converted company as the converted company nominates for that purpose, or

• (II) in default of such nomination, were, respectively, a reference to the director, officer, employees’ representative or employee of the converted company who corresponds as nearly as may be to the first-mentioned director, officer, employees’ representative or employee,

• (g) every contract, agreement or instrument to which the converting company is a party becomes a contract, agreement or instrument between the converted company and the counterparty with the same rights, and subject to the same obligations, liabilities and incidents (including rights of set-off), as would have been applicable thereto if that contract, agreement or instrument had continued in force between the converting company and the counterparty,

• (h) any money due and owing (or payable) by or to the converting company under or by virtue of any such contract, agreement or instrument as is mentioned in subparagraph (g) shall become due and owing (or payable) by or to the converted company instead of the converting company, and

• (i) an offer or invitation to treat made to or by the converting company before the effective date shall be construed and have effect, respectively, as an offer or invitation to treat made to or by the converted company.

• (2) The following provisions have effect for the purposes of paragraph (1) –

• (a) a reference to an “instrument” in that paragraph includes –

• (i) a lease, conveyance, transfer, charge or any other instrument relating to real property (including chattels real), and

• (ii) an instrument relating to personalty;

• (b) subparagraph (f)(ii) of that paragraph applies in the case of references to the converting company and its successors and assigns as it applies in the case of references to the converting company personally;

• (c) subparagraph (g) of that paragraph applies in the case of rights, obligations and liabilities mentioned in that subparagraph whether they are expressed in the contract, agreement or instrument concerned to be personal to the converting company or to benefit or bind (as appropriate) the converting company and its successors and assigns.

Cross-border conversions: validity

24.

• (2) Paragraph (1) is without prejudice to the power of the State to impose any measures or penalties under the law of the State after the effective date, including in relation to criminal law, the prevention and combatting of terrorist financing, social law, taxation and law enforcement.

PART 3 Cross-Border Mergers

Chapter 1 Preliminary and General

Interpretation (Part 3)

25.

“acquiring company”, in relation to a merger by acquisition, means the company that acquires all of the assets of one or more other companies that is or are to be dissolved without going into liquidation;

“cross-border merger” means a merger of companies that involves at least one Irish company and at least one EEA company, being –

• (a) a merger by acquisition,

• (b) a merger by formation of a new company, or

• (c) a merger by absorption;

“effective date” means –

• (a) in relation to a cross-border merger in which the proposed successor company is an Irish company, the date specified under Regulation 42(6), or

• (b) in relation to a cross-border merger in which the proposed successor company is an EEA company, the date determined in accordance with the law of the EEA state concerned for the purposes of Article 129 of the Directive;

“Irish merging company” means a merging company that is an Irish company;

“Irish successor company” means a successor company that is an Irish company;

“Irish transferor company” means a transferor company that is an Irish company;

“Merger Control Regulation” means Council Regulation (EC) No 139/2004 of 20 January 2004⁹ on the control of concentrations between undertakings (the EC Merger Regulation);

“merger by absorption” means an operation whereby, on being dissolved and without going into liquidation, a company transfers all of its assets and liabilities to a company that is the holder of all the shares or other securities representing the capital of the first-mentioned company;

“merger by acquisition” means –

• (a) an operation in which a company acquires all the assets and liabilities of one or more other companies that is or are dissolved without going into liquidation in exchange for the issue to the members of that company or those companies of shares or other securities in the first-mentioned company representing the capital of that company, with or without a cash payment, or

• (b) an operation in which a company acquires all the assets and liabilities of one or more other companies that is or are dissolved without going into liquidation without the issue of any new shares by the first-mentioned company, where one person holds directly or indirectly all of the shares in the merging companies or the members of the merging companies hold their shares and other securities in the same proportion in all merging companies;

“merger by formation of a new company” means an operation in which 2 or more companies, on being dissolved without going into liquidation, transfer all of their assets and liabilities to a company that they form (the “new company”) in exchange for the issue to their members of shares or other securities representing the capital of the new company, with or without a cash payment;

“merging company” means –

• (a) in relation to a merger by acquisition or a merger by absorption, a company that is, in relation to that merger, a transferor company or the successor company,

• (b) in relation to a merger by formation of a new company, a company that is, in relation to that merger, a transferor company;

“pre-merger certificate” means –

• (a) in relation to a cross-border merger in respect of which application was made by an Irish merging company under Regulation 39(1), a pre-merger certificate issued by the Court under that Regulation, or

• (b) in relation to any other cross-border merger, a certificate issued for the purposes of Article 127(1) of the Directive by the authority designated by an EEA state other than the State for the purposes of that Article;

“pre-merger requirements” has the meaning assigned to it by Regulation 39(4);

“share exchange ratio” means the number of shares or other securities in any successor company that the common draft terms of a cross-border merger provide to be allotted to members of any transferor company for a given number of their shares or other securities in the transferor company;

“successor company”, in relation to a cross-border merger, means the company to which assets and liabilities are to be, or have been, transferred from the transferor companies by way of that merger;

“transferor company”, in relation to a cross-border merger, means a company the assets and liabilities of which are to be, or have been, transferred by way of that merger.

Application (Part 3)

26.

• (a) at least one merging company is an Irish company, and

• (b) other than an Irish company that is a successor company in the case of a merger by formation of a new company, the Irish company delivers the documents referred to in Regulation 33(1) or (3), as the case may be, to the Registrar on or after the date on which these Regulations come into operation.

Chapter 2 Pre-merger Requirements

Application (Chapter 2 of Part 3)

27.

Cross-border mergers: common draft terms

28.

• (2) The draft terms shall include –

• (a) in relation to each transferor company –

• (i) its legal form and name, and

• (ii) the location of its registered office,

• (b) in relation to the proposed successor company –

• (i) where the successor company is an existing company, the particulars specified in subparagraph (a), and

• (ii) where the successor company is a new company yet to be formed, the particulars specified in subparagraph (a) that are proposed in respect of that company,

• (c) where applicable –

• (i) the proposed share exchange ratio and amount of any cash payment,

• (ii) the proposed terms relating to allotment of shares or other securities in the successor company, and

• (iii) the date from which the holding of shares or other securities in the successor company will entitle the holders to participate in profits and any special conditions affecting that entitlement,

• (d) the likely effect of the cross-border merger on employment,

• (e) the agency worker information in relation to each of the transferor companies,

• (f) the date from which the transactions of the transferor companies are to be treated for accounting purposes as being those of the successor company,

• (g) the rights to be conferred by the successor company on members of the transferor companies enjoying special rights or on holders of securities other than shares representing a transferor company’s capital, or the measures proposed concerning them,

• (h) any special advantages granted to members of the administrative, management, supervisory or controlling bodies of the merging companies,

• (i) the draft instrument of constitution or equivalent document, and any associated documents, of the proposed successor company,

• (j) where appropriate, information on the procedures by which arrangements for the involvement of employees in the definition of their rights to participation in the proposed successor company are determined pursuant to Part 5,

• (k) information on the evaluation of the assets and liabilities to be transferred to the successor company,

• (l) the dates of the accounts of each merging company which were used for the purpose of preparing the common draft terms,

• (m) details of the proposed cash compensation payable in response to requests made under Regulation 37(1), and

• (n) any safeguards offered to creditors, such as guarantees or pledges.

• (3) The common draft terms shall not provide for any shares in an acquiring company to be exchanged for shares in a transferor company which are held either –

• (a) by the acquiring company itself or its nominee on its behalf, or

• (b) by the transferor company itself or its nominee on its behalf.

Cross-border mergers: directors’ explanatory report

29.

• (a) explain and justify the legal and economic aspects of the cross-border merger,

• (b) explain the implications of the cross-border merger for employees, and

• (c) explain the implications of the cross-border merger for the future business of the company.

• (2) A report drawn up under this Regulation shall be made available electronically, together with the common draft terms if available, to –

• (a) the members, and

• (b) the employees’ representatives,

of the Irish merging company not less than 6 weeks before the date of the general meeting referred to in Regulation 35.

• (3) Where the approval of a cross-border merger by the general meeting of an acquiring company is not required in accordance with Regulation 36, the report shall be made available at least 6 weeks before the date of the general meeting of the other merging company or companies.

• (4) The report shall, subject to paragraph (5), include a section for members that includes the information referred to in paragraph (6) and a section for employees that includes the information referred to in paragraph (8).

• (5) The board of directors may draw up 2 separate reports, one for members including the section for members and another for employees including the section for employees.

• (6) The section for members shall, in particular, explain –

• (a) the cash compensation payable in response to requests made under Regulation 37(1) and the method used to determine the cash compensation,

• (b) where applicable, the share exchange ratio and the method or methods used to arrive at the share exchange ratio,

• (c) the implications of the cross-border merger for members of the Irish merging company, and

• (d) the rights and remedies available to members of the Irish merging company in accordance with Regulation 37.

• (7) The section for members shall not be required where every member of the Irish merging company has agreed to waive that requirement.

• (8) The section for employees in the report shall, in particular, explain –

• (a) the implications of the cross-border merger for employment in the Irish merging company, including in relation to employment relationships and any measures for safeguarding those relationships, organisation of work, and company-level social dialogue including any board-level employee representation,

• (b) any material changes to the conditions of employment of employees of the Irish merging company,

• (c) any material changes to the location of any place of business of the Irish merging company or to the location of specific posts in the company, and the expected consequences for employees occupying such posts, and

• (d) how the matters referred to in subparagraphs (a) to (c) affect any subsidiaries of the Irish merging company.

• (9) The conditions of employment referred to in paragraph (8) shall include conditions of employment which apply by law and under any applicable collective agreement or transnational company agreement.

• (10) Where the board of directors of an Irish merging company receives an opinion from the employees’ representatives on the information referred to in paragraphs (1) and (8) within a reasonable period of time prior to the general meeting –

• (a) the members shall be informed of the opinion, and

• (b) the opinion shall be appended to the report, or reports as the case may be.

• (11) The section for employees in the report shall not be required where the Irish merging company and its subsidiaries, if any, do not have any employees other than the board of directors.

• (12) A report shall not be required under this Regulation where the section for members in the report is not required under paragraph (7) and the section for employees in the report is not required under paragraph (11).

• (13) This Regulation is without prejudice to the Employees (Provision of Information and Consultation) Act 2006 and the Transnational Information and Consultation of Employees Act 1996 .

Cross-border mergers: expert’s report

30.

• (2) Where the approval of a cross-border merger by the general meeting of an acquiring company is not required in accordance with Regulation 36, the report shall be made available at least 30 days before the date of the general meeting of the other merging company or companies.

• (3) The report shall be drawn up by a person or persons (in this Regulation referred to as the “expert”), being –

• (a) a person appointed for the Irish merging company by its directors,

• (b) a person or persons, appointed by the Court, on the application of all of the merging companies, for all of them, or

• (c) a person appointed for all of the merging companies for the purposes of Article 125(2) of the Directive by an authority of an EEA state other than the State.

• (4) An expert appointed under paragraph (3)(a) or (b) shall be a qualified person, and Regulation 9(3), (4), (6) and (8) to (13) shall have effect for that purpose with any necessary modifications.

• (5) The report referred to in paragraph (1) shall be in writing and shall –

• (a) state the method or methods used to determine –

• (i) the proposed cash compensation payable in accordance with Regulation 37, and

• (ii) the proposed share exchange ratio,

• (b) state –

• (i) whether the method or methods used to determine the proposed cash compensation and the share exchange ratio is or are adequate for the assessment of the cash compensation and the share exchange ratio,

• (ii) the value arrived at using such methods,

• (iii) an opinion on the relative importance attributed to those methods in arriving at the value decided on, and

• (iv) in the event that different methods are used in the merging companies, state whether the use of different methods was justified,

• (c) state any special valuation difficulties which have arisen,

• (d) state the opinion of the expert as to whether the proposed cash compensation is adequate, the expert having considered any market price of the shares in the merging companies prior to the announcement of the proposed merger or the value of the companies excluding the effect of the proposed merger, as determined in accordance with generally accepted valuation methods, and

• (e) state the opinion of the expert as to whether the share exchange ratio is adequate.

• (6) Neither an examination of the common draft terms by the expert, nor the expert report, shall be required where every member of each merging company agrees to waive these requirements.

Cross-border mergers: civil liability of experts

31.

Cross-border mergers: criminal liability for untrue statements in expert’s report

32.

Cross-border mergers: registration and publication of documents

33.

• (a) a copy of the common draft terms, and

• (b) a notice informing the members, creditors and employees’ representatives that they may submit to their respective company, no later than 5 working days before the date of the general meeting, comments concerning the common draft terms, and

• (c) a notice, in the form set out in Part 2 of Schedule 1.

• (2) Subject to paragraph (4), paragraph (1) shall not apply in relation to an Irish merging company where the company publishes, free of charge on its website, the documents specified in paragraph (1)(a) and (b) for a continuous period of at least 2 months which –

• (a) commences at least 30 days before, and

• (b) ends at least 30 days after,

the date fixed for the general meeting referred to in Regulation 35.

• (3) Where paragraph (2) applies in relation to an Irish merging company, the company shall deliver to the Registrar for registration, at least 30 days before the date of the general meeting referred to in Regulation 35, a notice, in the form set out in Part 2 of Schedule 1.

• (4) Where, in the period referred to in paragraph (2), access to the company’s website is disrupted for a continuous period of at least 24 hours or for separate periods totalling not less than 72 hours, the period referred to in paragraph (2) shall be extended for a period corresponding to the period or periods of disruption.

• (5) Where the approval of a cross-border merger by the general meeting of an acquiring company is not required in accordance with Regulation 36, the disclosure referred to in paragraphs (1) to (3) shall be made at least 30 days before the date of the general meeting of the other merging company or companies.

• (6) Notice of the delivery of the common draft terms to the Registrar and the notice referred to in paragraph (1)(b) or, where paragraph (2) applies, the notice referred to in paragraph (3), shall be caused to be published –

• (a) by the Registrar in the CRO Gazette, and

• (b) by the company, in a national daily newspaper,

at least 30 days before the date of the general meeting referred to in Regulation 35.

• (7) The notice published in accordance with paragraph (6) shall include: