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

• (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).

• (8) 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.

• (9) 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 these services.

• (10) 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 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 mergers: notification to Central Bank of Ireland by certain companies

34.

Cross-border mergers: approval by general meeting

35.

• (a) the directors’ explanatory report under Regulation 29 and the expert’s report under Regulation 30,

• (b) any opinion received under Regulation 29(10), and

• (c) any comments submitted in accordance with Regulation 33(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 successor company in accordance with Part 5,

• (b) an order of the Court under Regulation 37(4) or (7), or of the authority designated by an EEA state other than the State providing for a cash payment for the purposes of Article 126a(6) of the Directive or additional cash compensation for the purposes of Article 126a(4) of the Directive,

• (c) receipt, where required, of –

• (i) merger control approval from the Competition and Consumer Protection Commission under Part 3 of the Competition Act 2002 (No. 14 of 2002),

• (ii) a determination by the Minister for the Environment, Climate and Communications under section 28D(1)(a) or (b) or section 28G(1)(a) or (c) (inserted by section 74 of the Competition and Consumer Protection Act 2014 (No. 29 of 2014)) of the Competition Act 2002,

• (iii) merger control approval from the European Commission under the Merger Control Regulation, or

• (iv) merger control approval under the law of any other jurisdiction,

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

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

• (3) The directors of each Irish merging company shall inform –

• (a) the general meeting of that company, and

• (b) as soon as practicable, the directors of each of the other merging companies,

of any material change in the assets and liabilities of that Irish merging company between the date of the common draft terms and the date of that general meeting.

• (4) The directors of each such other merging company shall inform the general meeting of that company of all changes of which they have been informed pursuant to paragraph (3).

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

• (a) the share exchange ratio referred to in Regulation 28(2)(c)(i) having been inadequately set;

• (b) the cash compensation referred to in Regulation 28(2)(m) having been inadequately set;

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

Cross-border mergers: exemption from requirement to hold general meeting

36.

• (a) the publication referred to in Regulation 33 is effected, for the acquiring company, at least 30 days before the date fixed for the general meeting of the company or companies being acquired which is to decide on the common draft terms,

• (b) subject to paragraph (4), at least 30 days before the date specified in subparagraph (a), all members of the acquiring company are entitled to inspect the following documents at the registered office of the acquiring company:

• (i) the common draft terms;

• (ii) the audited annual accounts and annual reports of the merging companies for the preceding 3 financial years;

• (iii) subject to paragraph (3), the accounting statement in relation to each merging company which is required to be prepared pursuant to paragraph (2) and which shall be drawn up on a date that is not earlier than the first day of the third month preceding the date of the common draft terms (if the latest annual accounts relate to a financial year which ended more than 6 months before that date);

• (iv) where applicable, the directors’ explanatory report under Regulation 29 and the expert’s report under Regulation 30,

and

• (c) one or more members of the acquiring company holding together not less than 5 per cent of the subscribed capital is entitled to require that a general meeting of the acquiring company be called to decide whether to approve the merger.

• (2) The accounting statement shall be drawn up using the same methods and the same layout as the last annual balance sheet.

• (3) The accounting statement shall not be required if –

• (a) the company publishes a half-yearly financial report in accordance with Article 5 of Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004¹⁰ and makes it available to shareholders in accordance with this Regulation, or

• (b) all shareholders and the holders of other securities conferring the right to vote of each of the merging companies have so agreed.

• (4) Subject to paragraph (7), every shareholder shall be entitled to obtain, on request and free of charge, full or, if so desired, partial copies of the documents referred to in paragraph (1)(b).

• (5) Where a shareholder has consented to the use by the company of electronic means for conveying information, the copies referred to in paragraph (4) may be provided by electronic mail.

• (6) A company shall be exempt from the requirement to make the documents referred to in paragraph (1)(b) available at its registered office if, for a continuous period beginning at least 30 days before the date fixed for the general meeting which is to decide on the common draft terms and ending not earlier than the conclusion of that meeting, it makes them available on its website.

• (7) Paragraph (4) shall not apply where –

• (a) the website referred to in paragraph (6) gives shareholders the possibility, throughout the period referred to in that paragraph, of downloading and printing the documents referred to in paragraph (1)(b), and

• (b) the company makes those documents available at its registered office for inspection by shareholders.

Cross-border mergers: protection of shareholders

37.

• (2) A minority shareholder may make the request referred to in paragraph (1) by electronic means to an electronic address provided by the Irish merging 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 common 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 paragraphs (1) to (5).

• (7) A shareholder of an Irish merging company who –

• (a) considers that the share exchange ratio set out in the common draft terms is inadequate, and

• (b) is not a minority shareholder or did not make a request under paragraph (1),

may apply to the Court to dispute the share exchange ratio and claim a cash payment within 30 days after the date on which the general meeting was held.

• (8) A final decision to modify the exchange ratio and make a cash payment –

• (a) shall apply to each shareholder who is not a minority shareholder or did not make a request under paragraph (1), notwithstanding that the shareholder concerned may not have made an application under paragraph (6), and

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

• (9) Where an application is made to the Court under paragraph (8), this shall not prevent the approval or registration of the cross-border merger, and the decision of the Court in relation to the application under paragraph (8) shall be binding on the successor company.

• (10) A successor company may provide shares or other compensation instead of a cash payment.

• (11) In this Regulation –

“final decision” means a decision of the Court under paragraph (4), or paragraph (7) as the case may be, or, where an appeal against the decision of the Court under paragraph (4) or (7) 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 merging company, means a shareholder of the company who voted against the special resolution proposed pursuant to Regulation 35(1) and, as a result of the merger, would acquire shares in a successor company that is governed by the law of an EEA state other than the State.

Cross-border mergers: protection of creditors

38.

• (a) is dissatisfied with the safeguards offered to creditors in the common draft terms under Regulation 28(2)(n), and

• (b) can credibly demonstrate that, due to the cross-border merger, 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 merger taking effect in accordance with Regulation 42(6).

• (3) This Regulation 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) In this Regulation –

“creditor”, in relation to an Irish merging 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 33(1) or, where Regulation 33(2) applies, the date of the delivery to the Registrar under Regulation 33(3).

Cross-border mergers: pre-merger certificate

39.

• (a) subject to Regulation 17(11) as applied by paragraph (3), if it is satisfied that the company has complied with the pre-merger requirements, issue a certificate (a “pre-merger 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 merging company shall submit the following documents to the Court:

• (a) the common draft terms under Regulation 28;

• (b) where applicable, the directors’ explanatory report under Regulation 29 and expert’s report under Regulation 30;

• (c) any opinion received under Regulation 29(10);

• (d) any comments submitted in accordance with Regulation 33(1)(b);

• (e) information on the approval by the general meeting referred to in Regulation 35;

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

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

• (h) information regarding the satisfaction by the Irish merging 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 34 and any written response received to this notification from the Central Bank of Ireland in advance of the general meeting referred to in Regulation 35.

• (3) Regulation 17(3) to (18) shall apply to the examination of a cross-border merger under this Regulation as it applies to a cross-border conversion, with any necessary modifications.

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

Cross-border mergers: transmission of pre-merger certificate

40.

Chapter 3 Approval in State of Cross-Border Mergers

Application (Chapter 3 of Part 3)

41.

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

• (b) the successor company to which the cross-border merger relates is an Irish company.

Court examination of cross-border merger

42.

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

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

• (2) In making the application referred to in paragraph (1), each merging company shall submit to the Court the common draft terms approved by the general meeting of that company for the purposes of Article 126 of the Directive or, where Article 132(3) of the Directive applies, the common draft terms approved by each merging company in accordance with the law of each EEA state concerned.

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

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

• (b) a pre-merger certificate has been issued under Regulation 39 in respect of each Irish merging company,

• (c) a pre-merger certificate has been issued in respect of each merging company that is an EEA company by the authority designated for the purposes of Article 127(1) of the Directive by the EEA state under the law of which that company is governed,

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

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

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

• (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 merging 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 merger is to have effect.

• (7) If the taking effect of the merger would fall at a time (being the time ascertained by reference to the general law and without regard to this paragraph) on the effective date that is a time that would not, in the opinion of the Court, be suitable having regard to the need to co-ordinate various transactions, the court may, in appointing an effective date, specify a time, different from the foregoing, on the effective date and, where such a time is so specified –

• (a) the merger takes effect on that time on the effective date, and

• (b) references in these Regulations to the effective date shall be construed accordingly.

• (8) After the cross-border merger 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-merger requirements have been complied with.

Compliance with other laws relating to mergers and takeovers

43.

• (a) the Commission has determined under section 21 or 22 of that Act that the merger may be put into effect,

• (b) the Commission has made a conditional determination (within the meaning of that Act) in relation to the merger,

• (c) the period specified in section 21(2) of that Act has elapsed without the Commission having informed the undertakings which made the notification concerned of the determination (if any) it has made under subsection (2)(a) or (b) of that section in relation to the merger, or

• (d) subject to section 19(5) of that Act, the relevant period referred to in section 19(1)(d) of that Act has elapsed without the Commission having made a determination under section 22 of that Act in relation to the merger.

• (2) The Court shall not make an order under Regulation 42 in respect of a cross-border merger that is a concentration with a Community dimension (within the meaning of the Merger Control Regulation) unless –

• (a) the European Commission has issued a decision under Article 8 of that Regulation declaring the concentration compatible with the common market,

• (b) the concentration is deemed to have been declared compatible with the common market pursuant to Article 10(6) of that Regulation, or

• (c) after a referral by the European Commission to the Commission under Article 9 of that Regulation, one of the events specified in subparagraphs (a) to (d) of paragraph (1) has occurred.

• (3) The Court shall not make an order under Regulation 42 in respect of a cross-border merger while any requirement under an enactment for any other authorisation, approval, consent, waiver, licence, permission or agreement that affects the merger remains unsatisfied.

• (4) Nothing in these Regulations shall be taken to imply that the satisfaction of a requirement mentioned in paragraph (3) in relation to a merging company is effective in relation to the successor company.

• (5) Nothing in this Regulation shall affect any conditions to which a determination by the Commission, a decision of the European Commission or an authorisation of a Regulator is subject.

• (6) Nothing in these Regulations limits the jurisdiction of the Irish Takeover Panel under the Irish Takeover Panel Act 1997 (No. 5 of 1997) with respect to a cross-border merger that –

• (a) involves a relevant company (within the meaning of that Act), and

• (b) constitutes a takeover (within the meaning of that Act), and, accordingly –

• (i) the Irish Takeover Panel has power to make rules under section 8 of that Act in relation to cross-border mergers of that kind, to the same extent and subject to the same conditions, as it has power to make rules under that section in relation to any other kind of takeover, and

• (ii) the Court, in exercising its powers under these Regulations, shall have due regard to the exercise of powers under that Act.

• (7) In this Regulation, “Regulator” means a person, body or organisation referred to in subparagraph (c)(i) of the definition of “relevant authority” in Regulation 2(1).

Chapter 4 Consequences of Approval of Cross-Border Mergers

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

44.

• (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 merger has been delivered to the Registrar.

• (3) Where an order is made in respect of a cross-border merger by an authority designated by an EEA state other than the State for the purposes of Article 128(1) of the Directive, any transferor company which is an Irish 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 mergers: action to be taken by Registrar on receipt of orders

45.

• (a) where the order was made by the Court under Regulation 42(1)(a), register the copy order in respect of the Irish successor 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 128(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 successor company is kept, pursuant to Article 16 of the Directive, in the EEA state concerned.

• (2) Without prejudice to the generality of Regulation 46(4), 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 42(1)(a) in relation to an Irish successor company –

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

• (ii) the date of registration of the Irish successor company,

• (iii) the registration number, name and legal form of the Irish successor company and each transferor company, and

• (iv) in respect of any Irish transferor company to which the cross border merger relates –

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

• (iI) the date of the striking off or removal of the company from the register;

• (b) where an order is made by an authority designated by an EEA state other than the State for the purposes of Article 128(1) of the Directive in relation to an Irish transferor company, and the Registrar has received notification of this through the interconnection system –

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

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

• (iii) the registration number, name and legal form of the successor company and each transferor company.

• (3) Where an order is made by the Court under Regulation 42(1)(a) in relation to a cross-border merger, the Registrar shall, through the interconnection system, notify the EEA register in the EEA state in which each of the merging companies that is not an Irish merging company is registered that the cross-border merger has taken effect.

Consequences of cross-border merger

46.

• (a) all of the assets and liabilities, including all of the rights and obligations, of the transferor companies shall be transferred to the successor company,

• (b) in the case of a merger by acquisition or a merger by formation of a new company, all remaining members of the transferor companies except the successor company (if it is a member of a transferor company) shall become members of the successor company, save for members who have made a request in accordance with Regulation 37(1),

• (c) the transferor companies shall be dissolved,

• (d) all legal or regulatory proceedings pending by or against any transferor company shall be continued with the substitution, for the transferor company concerned, of the successor company as a party,

• (e) the successor company is obliged to make to the members of the transferor companies any cash payment required by the common draft terms or by a court under Regulation 37,

• (f) the successor company is obliged to pay to the members of the transferor companies any cash compensation payable in response to requests made under Regulation 37(1) or required by a court under that Regulation,

• (g) the rights and obligations arising from contracts of employment of the transferor companies are transferred to the successor company,

• (h) every contract, agreement or instrument to which a transferor 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 successor company had been a party thereto instead of the transferor company,

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

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

• (I) were, respectively, a reference to the directors, officers, employees’ representatives or employees of the successor company or to such director, officer, representative or employee of the successor company as the successor 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 successor company who corresponds as nearly as may be to the first-mentioned director, officer, employees’ representative or employee,

• (i) every contract, agreement or instrument to which the transferor company is a party becomes a contract, agreement or instrument between the successor 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 transferor company and the counterparty,

• (j) any money due and owing (or payable) by or to the transferor company under or by virtue of any such contract, agreement or instrument as is mentioned in subparagraph (i) shall become due and owing (or payable) by or to the successor company instead of the transferor company, and

• (k) an offer or invitation to treat made to or by the transferor company before the effective date shall be construed and have effect, respectively, as an offer or invitation to treat made to or by the successor 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 (h)(ii) of that paragraph applies in the case of references to the transferor company and its successors and assigns as it applies in the case of references to the transferor company personally;

• (c) subparagraph (i) 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 transferor company or to benefit or bind (as appropriate) the transferor company and its successors and assigns.

• (3) Without prejudice to paragraphs (4) and (5), the successor company shall comply with registration requirements and any other special formalities required by law (including the law of an EEA state other than the State) and as directed by the Court for the transfer of the assets and liabilities of the transferor company or companies to be effective in relation to other persons.

• (4) There shall be entered by the keeper of any register in the State –

• (a) upon production of a certified copy of the order under Regulation 42(1)(a) or an order made by an authority designated by an EEA state other than the State for the purposes of Article 128(1) of the Directive, and

• (b) without the necessity of there being produced any other document (and, accordingly, any provision requiring such production shall, if it would otherwise apply, not apply),

the name of the successor company in place of the transferor company in respect of the information, act, ownership or other matter in that register and any document kept in that register.

• (5) Without prejudice to the generality of paragraph (4), the Property Registration Authority, as respects any deed (within the meaning of section 32 of the Registration of Deeds and Title Act 2006 (No. 12 of 2006)) registered by that Authority or produced for registration by it, shall, upon production of the document referred to in paragraph (4)(a) but without the necessity of there being produced that which is referred to in paragraph (4)(b), enter the name of the successor company in place of any transferor company in respect of such deed.

• (6) Without prejudice to the application of paragraph (4) to any other type of register in the State, each of the following shall be deemed to be a register in the State for the purposes of that paragraph:

• (a) the register of members of a company referred to in section 169 of the Act of 2014;

• (b) the register of charges kept by the Registrar pursuant to section 414 of the Act of 2014;

• (c) the Land Registry;

• (d) any register of shipping kept under the Mercantile Marine Act 1955 (No. 29 of 1955).

Cross-border mergers: simplified formalities

47.

• (a) a cross-border merger by acquisition is carried out either by a company which holds all the shares and other securities conferring the right to vote at general meetings of the company or companies being acquired, or by a person who holds directly or indirectly all the shares and other securities in the acquiring company and in the company or companies being acquired, and

• (b) the acquiring company does not allot any shares or other securities under the merger.

• (2) Where paragraph (1) applies –

• (a) Regulations 28(2)(c) and (m), 30 and 46(1)(b) shall not apply in relation to the cross-border merger, and

• (b) Regulations 29 and 35 shall not apply to the company or companies being acquired.

• (3) Where a cross-border merger by acquisition is carried out by a company which holds 90 per cent or more, but not all, of the shares and other securities conferring the right to vote at general meetings of the company or companies being acquired, the expert’s report under Regulation 30 and the documents necessary for examination shall not be required.

• (4) Where –

• (a) Regulation 36 and paragraph (1) apply to an Irish merging company in respect of a cross-border merger,

• (b) approval by the general meeting of the common draft terms is not required under national law in respect of any of the merging companies for the purposes of Article 126(3) of the Directive, and

• (c) Article 132(1) of the Directive applies in respect of each merging company,

the following shall be made available by the Irish merging company at least 30 days before the decision on the merger is made by the company –

• (i) the common draft terms or the information referred to in Regulation 33(1) or (3), as the case may be,

• (ii) the directors’ explanatory report under Regulation 29, and

• (iii) the expert’s report under Regulation 30.

Cross-border mergers: validity

48.

• (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 4 Cross-Border Divisions

Chapter 1 Preliminary and General

Interpretation (Part 4)

49.

“cross-border division” means a full division, partial division or division by separation of a company which has its registered office, central administration or principal place of business within the European Union, provided that at least one of the recipient companies is an Irish company and at least one is an EEA company;

“dividing company” means a company which, in the process of a cross-border division –

• (a) transfers all its assets and liabilities to 2 or more companies, in the case of a full division, or

• (b) transfers part of its assets and liabilities to one or more companies, in the case of a partial division or division by separation;

“division” means a full division, a partial division or a division by separation;

“division by separation” means an operation whereby a dividing company transfers part of its assets and liabilities to one or more recipient companies, in exchange for the issue to the dividing company of securities or shares in the recipient company or companies;

“effective date” means –

• (a) in relation to a cross-border division in which the dividing company is an Irish company, the date on which the Registrar gives notice under Regulation 67(2), or

• (b) in relation to a cross-border division in which the dividing company is an EEA company, the date determined in accordance with the law of the EEA state concerned for the purposes of Article 160q of the Directive;

“full division” means an operation whereby a dividing company, on being dissolved without going into liquidation, transfers all its assets and liabilities to 2 or more recipient companies, in exchange for the issue to the members of the dividing company of securities or shares in the recipient companies and, if applicable, a cash payment;

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

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

“partial division” means an operation whereby a dividing company transfers part of its assets and liabilities to one or more recipient companies, in exchange for the issue to the members of the dividing company of securities or shares in the recipient company or companies, in the dividing company, or in both and if applicable, a cash payment;

“pre-division certificate” means –

• (a) in relation to a cross-border division in respect of which application was made by an Irish dividing company under Regulation 62(1), a pre-division certificate issued by the Court under that Regulation, or

• (b) in relation to any other cross-border division, a certificate issued for the purposes of Article 160m of the Directive by the authority designated by an EEA state other than the State for the purposes of that Article;

“recipient company” means a company newly formed in the course of a cross-border division;

“share exchange ratio” means the number of shares or other securities in any recipient company that the draft terms of a cross-border division provide to be allotted to members of any dividing company for a given number of their shares or other securities in the dividing company.

Application (Part 4)

50.

• (2) The law of the EEA state of the dividing company shall apply in relation to a cross-border division until a pre-division certificate is issued in respect of the division.

• (3) The laws of the EEA states of the recipient company or companies shall apply in relation to a cross-border division after a pre-division certificate is issued in respect of the division.

Chapter 2 Pre-division Requirements

Application (Chapter 2 of Part 4)

51.

Cross-border divisions: draft terms

52.

• (2) The draft terms shall include –

• (a) in relation to the dividing company –

• (i) its legal form and name, and

• (ii) the location of its registered office,

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

• (c) where applicable, the proposed share exchange ratio and amount of any cash payment,

• (d) the proposed terms relating to allotment of shares or other securities in the recipient companies or the dividing company,

• (e) the date from which the holding of securities or shares representing the companies’ capital will entitle the holders to share in profits, and any special conditions affecting that entitlement,

• (f) the proposed indicative timetable for the cross-border division,

• (g) the likely effect of the cross-border division on employment,

• (h) the agency worker information in relation to the dividing company,

• (i) the date or dates from which the transactions of the dividing company will be treated for accounting purposes as being those of the recipient companies,

• (j) the rights conferred by the recipient companies on members of the dividing company enjoying special rights or on holders of securities other than shares representing the capital of the company, or the measures proposed concerning them,

• (k) any special advantages granted to members of the administrative, management, supervisory or controlling bodies of the dividing company,

• (l) the draft instruments of constitution or equivalent document, and any associated documents, of the proposed recipient companies, and any proposed amendments to the instrument of constitution of the dividing company in the case of a partial division or a division by separation,

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

• (n) a precise description of the assets and liabilities of the dividing company and a statement of how those assets and liabilities are to be allocated between the recipient companies, or are to be retained by the dividing company in the case of a partial division or a division by separation, including provisions on the treatment of assets or liabilities not explicitly allocated in the draft terms, such as assets or liabilities which are unknown on the date on which the draft terms are drawn up,

• (o) information on the evaluation of the assets and liabilities which are to be allocated to each company involved in the cross-border division,

• (p) the date of the accounts of the dividing company which were used for the purpose of preparing the draft terms,

• (q) where appropriate, the allocation to the members of the dividing company of shares and securities in the recipient companies, in the dividing company or in both, and the criterion upon which such allocation is based,

• (r) details of the proposed cash compensation payable in response to requests made under Regulation 60(1), and

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

• (3) The draft terms shall not provide for any shares in a recipient company to be exchanged for shares in the dividing company which are held either by the company itself or its nominee on its behalf.

Cross-border divisions: directors’ explanatory report

53.

Cross-border divisions: expert’s report

54.

Cross-border divisions: civil liability of experts

55.

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

56.

Cross-border divisions: registration and publication of documents

57.

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

58.

Cross-border divisions: approval by general meeting

59.

• (a) the directors’ explanatory report under Regulation 53 and the expert’s report under Regulation 54,

• (b) any opinion received under Regulation 29(10) as applied by Regulation 53, and

• (c) any comments submitted in accordance with Regulation 33(1)(b) as applied by Regulation 57.

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

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

• (b) an order of the Court under Regulation 60(4) or (7), or of the authority designated by an EEA state other than the State providing for a cash payment for the purposes of Article 126a(6) of the Directive or additional cash compensation for the purposes of Article 126a(4) of the Directive,

• (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 amendment to the constitution of 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 60(1),

that provision shall be approved by the member concerned.

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

• (a) the share exchange ratio referred to in Regulation 52(2)(c) having been inadequately set;

• (b) the cash compensation referred to in Regulation 52(2)(r) having been inadequately set;

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

Cross-border divisions: protection of shareholders

60.

• (2) A minority shareholder may make the request referred to in paragraph (1) by electronic means to an electronic address provided by the Irish dividing 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 paragraphs (1) to (5).

• (7) A shareholder of an Irish dividing company who –

• (a) considers that the share exchange ratio set out in the draft terms is inadequate, and

• (b) is not a minority shareholder or did not make a request under paragraph (1),

may apply to the Court to dispute the share exchange ratio and claim a cash payment within 30 days after the date on which the general meeting was held.

• (8) A final decision to modify the exchange ratio and make a cash payment –

• (a) shall apply to each shareholder who is not a minority shareholder or did not make a request under paragraph (1), notwithstanding that the shareholder concerned may not have made an application under paragraph (7), and

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

• (9) Where an application is made to the Court under paragraph (7), this shall not prevent the approval or registration of the cross-border division, and the decision of the Court in relation to the application under paragraph (7) shall be binding on any recipient company and, in the event of a partial division, on the dividing company.

• (10) A recipient company and, in the event of a partial division, the dividing company may provide shares or other compensation instead of a cash payment.

• (11) In this Regulation –

“final decision” means a decision of the Court under paragraph (4), or paragraph (7) as the case may be, or, where an appeal against the decision of the Court under paragraph (4) or (7) 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 dividing company, means a shareholder of the company who voted against the special resolution proposed pursuant to Regulation 59(1) and, as a result of the division, would acquire shares in a recipient company that is governed by the law of an EEA state other than the State.

Cross-border divisions: protection of creditors

61.

• (a) is dissatisfied with the safeguards offered to creditors in the draft terms under Regulation 52(2)(s), and

• (b) can credibly demonstrate that, due to the cross-border division, 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 division taking effect in accordance with the effective date.

• (3) Where a creditor of the dividing company does not obtain satisfaction from the company to which the liability is allocated, the other recipient companies, and in the case of a partial division or a division by separation, the dividing company, shall be jointly and severally liable with the company to which the liability is allocated for that obligation.

• (4) However, the maximum amount of joint and several liability of any company involved in the division shall be limited to the value, at the effective date, of the net assets allocated to that company.

• (5) This Regulation 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.

• (6) In this Regulation –

“creditor”, in relation to an Irish dividing 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 33(1) or, where Regulation 33(2) applies, the date of the delivery to the Registrar under Regulation 33(3) (in each case, as applied by Regulation 57).

Cross-border divisions: pre-division certificate

62.

• (a) subject to Regulation 17(11) as applied by paragraph (3), if it is satisfied that the company has complied with the pre-division requirements, issue a certificate (a “pre-division 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 dividing company shall submit the following documents to the Court:

• (a) the draft terms under Regulation 52;

• (b) where applicable, the directors’ explanatory report under Regulation 53 and expert’s report under Regulation 54;

• (c) any opinion received under Regulation 29(10) as applied by Regulation 53;

• (d) any comments submitted in accordance with Regulation 33(1)(b) as applied by Regulation 57;

• (e) information on the approval by the general meeting referred to in Regulation 59;

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

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

• (h) information regarding the satisfaction by the Irish dividing 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 58 and any written response received to this notification from the Central Bank of Ireland in advance of the general meeting referred to in Regulation 59.

• (3) Regulation 17(3) to (18) shall apply to the examination of a cross-border division under this Regulation as it applies to the examination of a cross-border conversion, with any necessary modifications.

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

Cross-border divisions: transmission of pre-division certificate

63.

Chapter 3 Approval in State of Cross-Border Divisions

Application (Chapter 3 of Part 4)

64.

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

• (b) a recipient company to which the cross-border division relates is an Irish company.

Court examination of cross-border division

65.

Chapter 4 Consequences of Approval of Cross-Border Divisions

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

66.

• (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 division has been delivered to the Registrar.

• (3) Where an order is made in respect of a cross-border division by an authority designated by an EEA state other than the State for the purposes of Article 160o(1) of the Directive and the dividing company is an Irish company, the Irish dividing company shall deliver a copy of that order to the Registrar for registration within 14 days after the date on which it was made.

• (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 divisions: action to be taken by Registrar on receipt of orders

67.

• (a) where the order was made by the Court under Regulation 42(1)(a) (as applied by Regulation 65), register the copy order in respect of the Irish recipient 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 160o(1) of the Directive, give notice of that order as soon as practicable through the interconnection system to the authority or authorities responsible for maintaining the EEA register in which the company file for the recipient company or companies is kept, pursuant to Article 16 of the Directive, in the EEA state concerned.

• (2) Where an order made for the purposes of Article 160o(1) has been received by the Registrar in respect of each recipient company to which a cross-border division relates, the Registrar shall, through the interconnection system, give notice that the cross-border division has taken effect to the authority responsible for maintaining the EEA register in which the company file for each recipient company or companies is kept, pursuant to Article 16 of the Directive, in the EEA state concerned.

• (3) 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 42(1)(a) (as applied by Regulation 65) in relation to an Irish recipient company –

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

• (ii) the date of registration of the Irish recipient company,

• (iii) the registration number, name and legal form of the Irish recipient company, the dividing company and each other recipient company,

• (iv) in respect of any Irish dividing company to which the cross border division relates, in the case of a full division –

• (I) that the striking-off or removal of the company from the register is the result of a cross-border division, and

• (II) the date of the striking off or removal of the company from the register;

• (b) where an order is made by an authority designated by an EEA state other than the State for the purposes of Article 160o(1) of the Directive in relation to an Irish dividing company, and the Registrar has received notification of this through the interconnection system –

• (i) in the case of a full division, that the striking-off or removal of the Irish dividing company from the register is the result of a cross-border division,

• (ii) in the case of a full division, the date of the striking-off or removal from the register of the Irish dividing company, and

• (iii) the registration number, name and legal form of the dividing company and each recipient company.

Consequences of a cross-border division

68.

• (a) the assets and liabilities, including all of the rights and obligations, of the dividing company shall be transferred to the recipient company or companies in accordance with the allocation specified in the draft terms,

• (b) in the case of a full division, all, or, in the case of a partial division, at least some, remaining members of the dividing company shall become members of the recipient company or companies in accordance with the allocation specified in the draft terms, save for members who have made a request in accordance with Regulation 60(1),

• (c) in the case of a partial division, at least some of the members shall remain in the dividing company in accordance with the allocation specified in the draft terms, save for members who have made a request in accordance with Regulation 60(1),

• (d) in the case of a division by separation, the shares of the recipient company or companies shall be allocated to the dividing company,

• (e) in the case of a full division, the dividing company shall be dissolved,

• (f) legal or regulatory proceedings pending by or against the dividing company shall be continued with the substitution, for the dividing company, of the recipient company as a party in accordance with the allocation specified in the draft terms,

• (g) any cash payment required by the draft terms or by a court under Regulation 60 is obliged to be paid,

• (h) any cash compensation payable in response to requests made under Regulation 60(1) or required by a court under that Regulation is obliged to be paid,

• (i) the rights and obligations arising from contracts of employment of the dividing company are transferred to the recipient company or companies, in accordance with the allocation specified in the draft terms where applicable,

• (j) in accordance with the allocation specified in the draft terms, a contract, agreement or instrument to which the dividing 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 recipient company had been a party thereto instead of the dividing company,

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

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

• (i) were, respectively, a reference to the directors, officers, employees’ representatives or employees of the recipient company or to such director, officer, representative or employee of the recipient company as the recipient 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 recipient company who corresponds as nearly as may be to the first-mentioned director, officer, employees’ representative or employee,

• (k) in accordance with the allocation specified in the draft terms, a contract, agreement or instrument to which the dividing company is a party becomes a contract, agreement or instrument between the recipient 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 dividing company and the counterparty,

• (l) in accordance with the allocation specified in the draft terms, money due and owing (or payable) by or to the dividing company under or by virtue of any such contract, agreement or instrument as is mentioned in subparagraph (i) shall become due and owing (or payable) by or to the recipient company instead of the dividing company, and

• (m) in accordance with the allocation specified in the draft terms, an offer or invitation to treat made to or by the dividing company before the effective date shall be construed and have effect, respectively, as an offer or invitation to treat made to or by the recipient company.

• (2) Regulation 46(2) to (6) shall apply in relation to a cross-border division as it applies in relation to a cross-border merger, with any necessary modifications and in accordance with any allocation specified in the draft terms.

• (3) Without prejudice to Regulation 61(4), where an asset or a liability of the dividing company is not explicitly allocated under the draft terms of the cross-border division, as referred to in Regulation 52(2)(n), and where the interpretation of those terms does not make a decision on its allocation possible, the asset, the consideration therefor or the liability is allocated to all the recipient companies or, in the case of a partial division or a division by separation, to all the recipient companies and the dividing company in proportion to the share of the net assets allocated to each of those companies under the draft terms of the cross-border division.

Cross-border divisions: simplified formalities

69.

Cross-border divisions: validity

70.

• (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 5 Employee Participation

Chapter 1 Preliminary and General

Interpretation (Part 5)

71.

“appointed” means, in the absence of an election, appointed by the employees and the basis on which that appointment is made may, if the employees so determine, be such as is agreed by them with the participating companies, or the resulting company as the case may be;

“Commission” means the Workplace Relations Commission;

“consultation” means the establishment of dialogue and exchange of views between the representative body or the employees’ representatives (or both) and the competent organ of the resulting company or companies at a time, in a manner and with a content which allows the employees’ representatives, on the basis of the information provided, to express an opinion on measures envisaged by the competent organ which may be taken into account in the decision making process within the resulting company;

“Council Regulation (EC) No 2157/2001” means Council Regulation (EC) No 2157/2001 of 8 October 2001¹¹ on the Statute for a European company (SE) as amended by Council Regulation (EC) No 885/2004 of 26 April 2004¹² and Council Regulation (EU) No 517/2013 of 13 May 2013¹³ ;

“Court” means the Labour Court;

“cross-border operation” means a cross-border conversion, cross-border merger or cross-border division of companies in accordance with Parts 2, 3 and 4;

“EEA” means the European Economic Area constituted by the EEA Agreement;

“employee” means a person who has entered into or works under a contract of employment and references, in relation to the participating company or companies, or a resulting company, to an employee shall be construed as references to an employee employed by any of them;

“employee participation” means the influence of the representative body or the employees’ representatives (or both) in the affairs of a company by the way of –

• (a) the right to elect or appoint some of the members of the company’s supervisory or administrative organ, or

• (b) the right to recommend or oppose, or both to recommend and oppose, the appointment of some or all of the members of the company’s supervisory or administrative organ;

“establishment” means, in relation to a company, a division (however described) of the undertaking physically separated from other parts of the company;

“excepted body” has the meaning assigned to it by section 6 (3) of the Trade Union Act 1941 (No. 22 of 1941);

“expert” means an individual, and may be the holder from time to time of a named office or position in a body corporate or other body or organisation;

“information” means the informing of the representative body or the employees’ representatives (or both), by the competent organ of the converted company, successor company or recipient company or companies on questions which concern the company or companies itself and any of its subsidiaries or establishments situated in another EEA state or which exceed the powers of the decision-making organs in a single EEA state at a time, in a manner and with a content (including agency worker information) which allows the employees’ representatives to undertake an in depth assessment of the possible impact and, where appropriate, prepare consultations with the competent organ of the company or companies;

“involvement of employees” means any mechanism including information, consultation and employee participation, through which employees’ representatives may exercise an influence on decisions to be taken within the company;

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

“participating company or companies” means the converting, merging or dividing company or companies directly involved in the cross-border operation;

“representative body” means the body representative of the employees referred to in Schedule 2 set up for the purpose of informing and consulting the employees of a converted company, successor company or recipient company or companies situated in the EEA and, where applicable, of exercising employee participation rights in relation to the converted company, successor company or recipient company or companies;

“resulting company” means a converted company, a successor company or a recipient company established under these Regulations;

“special negotiating body” means the body established in accordance with Regulation 75 to negotiate with the competent body of the participating companies regarding the establishment of arrangements for the involvement of employees within the resulting company or companies;