Exploring the Newly Enacted Mobility Directive and its Impact on Irish Law

Mobility Regulations

By Shannon Power, 7th June 2023

The European Union (Cross-Border Conversions, Mergers, and Divisions) Regulations (S.I. No. 233 of 2023), commonly referred to as the Mobility Regulations, were implemented on May 24th 2023, signifying a noteworthy advancement in EU corporate law. The Mobility Regulations give effect to the provisions of the European Union’s Mobility Directive. These regulations were created to make it easier for companies to move across borders by instituting standardised protocols for cross-border conversions, mergers, and divisions. In this piece, we’ll examine the significant components of the regulations and how they impact Irish law.

The European Union has long been committed to fostering a unified and dynamic internal market. To that end, efforts have been made to enable companies to seamlessly expand their operations across national boundaries. Prior to the enactment of these regulations, however, obstacles such as legal and administrative complexities hindered the cross-border mobility of companies. The Mobility Regulations aim to address these challenges and create a more conducive environment for businesses to restructure and expand within the EU.

Key Provisions

  1. Cross-Border Conversions: The regulations introduce a streamlined process for companies seeking to convert from one EU member state to another. This process entails various requirements, including notifying shareholders, obtaining court approval, and ensuring adequate creditor protection. Notably, the regulations enable Irish companies to convert into companies governed by the laws of another EU member state, and vice versa, without the need for winding up and re-establishment.
  2. Cross-Border Mergers: The regulations establish a framework for cross-border mergers, allowing companies from different member states to combine their assets and liabilities to form a single entity. This process involves approval from the relevant authorities, information sharing with shareholders, and protection of employee rights. The regulations offer Irish companies an efficient means of participating in cross-border mergers, enhancing their competitiveness, and facilitating expansion into new markets.
  3. Cross-Border Divisions: The regulations also introduce provisions for cross-border divisions, enabling companies to divide their assets and liabilities and transfer them to two or more existing or newly established companies in different member states. This process requires consent from shareholders, approval from competent authorities, and adequate safeguards for creditors and employees. By availing themselves of cross-border divisions, Irish companies can pursue strategic restructuring while preserving their operations and market presence.

Implications for Irish Law

The enactment of the Mobility Directive has significant implications for Irish law. Previously, cross-border corporate restructuring often required complex legal procedures and costly compliance measures. The new regulations simplify these processes, offering Irish companies more flexibility and agility when it comes to expanding their operations within the EU.

Furthermore, these regulations promote legal certainty and harmonisation across member states, ensuring that businesses can navigate the cross-border landscape with greater ease. By adopting a unified set of rules, the regulations contribute to a level playing field for companies operating in the EU while protecting the rights and interests of stakeholders involved in cross-border transactions.

The Mobility Regulations represent a significant step forward in facilitating the mobility and restructuring of companies within the EU. With simplified procedures for cross-border conversions, mergers, and divisions, these regulations provide Irish companies with new opportunities for growth, expansion, and market integration. By harmonising legal frameworks and streamlining administrative processes, the regulations enhance legal certainty, promote cross-border investments, and contribute to a more dynamic and competitive European business landscape.

If you have any further questions surrounding the Mobility Directive or its regulations, please do not hesitate to contact the Company Bureau team. Give us a call at +353(0)1 6461625 or fill out our online contact form.


Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.