The merged with another limited liability company, on

The
situation is likely to be complex if a UK company was to develop its
activity in a “seat” jurisdiction, the latter acting as the
“host”. If that activity can legally be qualified as that of the
seat, the UK company will become subject to the host state legal
regime. In most cases, it will not have been created according to the
host state’s legal provisions, both in formal terms and in
substantive terms and hence will be disqualified as a valid foreign
company with its own characteristics. UK companies with factual seat
in a jurisdiction would be confronted with severe challenges in
jurisdictions resulting in a refusal to recognise the foreign legal
entity and requalify it as an unincorporated company, with unlimited
liability for shareholders, and managers.

Companies
could also restructure into a more appropriate corporate form
available. UK companies could undertake a cross-border change of
legal form into a company governed by the law of another Member
State. Another possible solution would be a cross-border merger with
a company governed by the law of another Member State than the UK.
Businesses would be well advised to carry on with these restructuring
operations before Brexit in order to take advantage of their
soon-to-cease freedom of establishment

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For
exemple, A private limited company under English law can be merged
with another limited liability company, on a cross-border basis.
Partnerships, which are not covered by the statutory scope of
application of cross-border mergers, can still at least enter via a
cross-border conversion. They will most likely be forced to establish
subsidiary companies in order to conduct business in EU.  Moreover,
it should be noted that some countries
do not currently provide for a possibility of cross-border
re-incorporation as transformation of foreign companies. For
British companies, this may means the necessity to change the legal
form by liquidating limited companies and incorporating new
companies in EU (preserving all the formal requirements). This
process would be time consuming but it would not result in the
recognition of continued existence and legal succession. Since 2003,
they can also create a European cooperative society and transfer the
headquarters to another EU country.

Consequently,
it seems that the safest option for companies incorporated in the UK
for legal arbitrage purposes, which have their administration in
real seat countries, is to convert into a company form of another
Member State prior to the implementation of Brexit. At the same time,
if UK chooses a hard Brexit it will no longer be bound by the CJEU
decisions on freedom of establishment, and may implement restrictions
on corporate mobility, aimed to discourage companies from relocating
in the EU. A relatively simple approach to avoid these consequences
would be to create sufficient activity at the place of registration
in the home State. This may not be sufficient if the flaw existed
from the beginning, in pre-Brexit times,while it is doubtful that the
absence of legal personality can be healed by later corrective
action. This analysis makes it clear that the definition of what
constitutes the seat will be of central importance.

A
hard Brexit will also require UK companies that have significant
business relations with the rest of the EU to reassess their risk
management and oversight systems, and to communicate to their
relevant stakeholders the nature and extent of the impact of Brexit
on their business.

The
European Commission is preparing a legislative proposal, which could
establish a harmonised EU framework for the cross-border transfer of
company seats including unity of
seat principle, companies
should be able to effectively exercise their right to freedom of
establishment.