Peter Böckli

Paul Davies

Eilis Ferran

Guido Ferrarini

José M. Garrido Garcia

Klaus J. Hopt

Adam Opalski

Alain Pietrancosta

Markus Roth, Rolf Skog

Stanislaw Soltysinski

Jaap W. Winter

Martin Winner

Eddy Wymeersch

Böckli Bodmer & Partners

University of Oxford- Faculty of Law

University of Cambridge - Faculty of Law

University of Genoa - Law School

International Monetary Fund (IMF)

Max Planck Institute for Comparative and International Private Law

Sorbonne Law School

Columbia University School of Law

University of Marburg

University of Gothenburg

Komisja Kodyfikacyjna Prawa Cywilnego

University of Amsterdam

Ghent University - Financial Law Institute

The Consequences of Brexit for Companies and Company Law

13/11/2019

The consequences of the Brexit vote will be felt throughout the legal systems, both in the UK and in the EU. The legal consequences of the Brexit decision and the process which will lead to the withdrawal of the UK, raises numerous questions many of which are in the process of being analysed, and possibly solved. In the field of company law, with respect to cross-border matters, UK companies will be exposed to national laws in the EU States after the Treaty freedom of establishment will not further apply. This may lead to tensions between the two systems of recognition of foreign companies, i,e. the incorporation theory and the seat theory. Foreign companies active in seat jurisdictions may in the future be disqualified if their seat is effectively established in the seat State. Access may become more difficult, not on the basis of company law, but of sectoral regulations. In other part of the regulatory system, such as the rules on cross-border mergers, on rights of shareholders in listed companies, or disclosures to be made, equivalence of rules, as decided by the European Commission, will be the key factor. Additional issues will arise for the cross border recognition of accounting standards and for the activity of auditors.

I. INTRODUCTION

Among the many consequences of Brexit, some attention has already been paid to the consequences of the Brexit vote on company law, more specifically on the legal position of companies both in the UK and in the European Continent (EU). Although it is still far from clear according to which conditions the UK will leave the European Union, several scenarios are being discussed, the present analysis will be based on the hypothesis that the UK will leave the Union without specific agreement on the issues discussed here1. This approach allows to identify the possible consequences of a Brexit decision in the different fields analysed. Also the analysis will not take into account the possible extension in time, as the UK and the EU may agree on an extension of the negotiation period, and further adopt transitional measures that would allow to alleviate the negative consequences over time.

Read more