Bill on cross-border conversion, merger and demerger submitted to the House of Representatives

Minister for Legal Protection Franc Weerwind submitted the bill for the Implementation of the Directive on Cross-Border Conversions, Mergers, and Demergers to the House of Representatives on Monday. A fraud test will be introduced for the pre-certification process.

The bill is intended to implement Directive (EU) 2019/2121 , also known as the Mobility Directive. With this directive, the European Commission aims to simplify the cross-border conversion, merger, and division of limited liability companies and thus promote freedom of establishment within the EU. The directive must be implemented in Dutch law by January 31, 2023. The Joint Committee on Company Law (GCV) has issued an opinion on the preliminary draft of the bill.

Fraud test
The civil-law notary will be designated as the competent authority in the Netherlands to issue the pre-certification and the final certificate. A fraud test will be introduced for the pre-certification. This means that the civil-law notary will not issue the certificate if they determine that the cross-border conversion, merger, or demerger was set up for unlawful or fraudulent purposes leading to or aimed at the evasion or circumvention of Union or national law, or for criminal purposes. According to the explanatory memorandum to the bill, the fraud test aligns with the civil-law notary's current role as gatekeeper and has the same weight and scope as the test that the civil-law notary currently performs for a cross-border transaction due to their notarial gatekeeper role.