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Domestic mergers of public limited liability companies: third Directive
The purpose of this Directive is to regulate mergers between public limited liability companies from the same Member State.
ACT
Third Council Directive 78/855/EEC of 9 October 1978 based on Article 54(3)(g) of the Treaty concerning mergers of public limited liability companies.
SUMMARY
This Directive applies to public limited companies. Member States may, however, choose not to apply it in the following cases:
The Directive distinguishes two main types of merger, namely:
Merger by acquisition or merger by the formation of a new company
A merger by acquisition or by the formation of a new company is established by the administrative or management bodies of the companies based on draft terms of merger which must contain the following information in particular:
The administrative or management bodies of the company must publish the draft terms of merger at least one month before the date fixed for the general meeting, pursuant to the conditions of the Directive relating to the publication, validity and nullity of undertakings of incorporated companies. They shall be exempt from this obligation if the draft terms of merger are made available on the company’s website during this period. In order to be valid, the merger must be approved by the general meeting of each of the merging companies.
The merging companies shall protect workers’ rights pursuant to the provisions of the Directive on the maintaining of workers’ rights in the event of a transfer of undertakings. They must also provide creditors with safeguards as to their financial situation.
Following a merger, the following situations may arise:
Rules governing the nullity of mergers are laid down in order to protect members and third parties. The cases of nullity are limited to formal illegalities (e.g. lack of judicial or administrative preventive supervision of legality, irregularity vitiating the decision of the general meeting). A series of restrictions are placed on the ordering and enforcement of nullity.
Acquisition of a company by another which holds 90 % or more of its shares
One or more companies may be wound up without going into liquidation and transfer all their assets and liabilities to another company which is the holder of all their shares. This shall take place pursuant to the provisions described above. Nevertheless, Member States need not apply certain requirements.
References
Act |
Entry into force |
Deadline for transposition in the Member States |
Official Journal |
Directive 1978/855/EEC |
12.10.1978 |
13.10.1981 |
OJ L 295 of 20.10.1978 |
Amending Acts |
Entry into force |
Deadline for transposition in the Member States |
Official Journal |
Directive 2007/63/EC |
7.12.2007 |
31.9.2008 |
OJ L 300 of 17.11.2007 |
Directive 2009/109/EC |
2.10.2009 |
30.6.2011 |
OJ L 259 of 2.10.2009 |
The successive amendments and corrections to Directive 1978/855/EEC have been incorporated into the basic text. This consolidated version is for reference only.
Last updated: 17.02.2011