Brexit: Potential, significant changes in laws governing companies in EU
Recently, the European Commission has issued a Brexit notice to EU companies about post-Brexit changes in laws applicable to companies in EU. The Commission is warning them that unless a ratified withdrawal agreement sets another date or an unanimous agreement is reached between the EU and the UK, all primary and secondary EU law will cease to apply to the UK from 30 March 2019.
As of the withdrawal date, EU rules in the field of company law no longer apply to the UK.
This has in particular the following consequences:
Read the EU Commission's notice of 19 January 2018
- The European Company (SE) will no longer be available in the United Kingdom.
- UK incorporated companies will be third country companies. Member states will not be obliged to recognise the legal personality and limited liability of companies, which are incorporated in the United Kingdom, but have the central administration or principal place of business in EU's 27 member states. UK incorporated companies may be recognised in accordance with each member state's national law or international law treaties. Consequently, such companies might not have a legal standing in the EU and shareholders might be personally liable for debts of the company.
- Branches in EU's 27 member states of United Kingdom incorporated companies will be branches of third country companies. Rules relevant to branches of third country companies will apply.
- EU law on disclosure, incorporation, capital maintenance and alteration, as well as cross-border mergers will no longer apply to the United Kingdom. Consequently, stakeholders, including employees, creditors and investors dealing with UK companies will have to rely on national rules of the United Kingdom for adequate safeguards.
- EU law on access, including cross-border, to company information available in the EU business registers, no longer applies to the United Kingdom. This means that the United Kingdom business register will no longer be connected to the business registers interconnection system (BRIS).