Cross-Border Conversions in the European Union After the Polbud Case

Abstract

Cross-border conversions may be considered as an achievement of the Court of Justice of the European Union (CJEU, Court) since its case law paves the way towards acceptance of such cross-border operations in all Member States. In the Polbud case, the CJEU clarified the scope of the freedom of establishment in regard to cross-border conversions. That judgement should give an impulse to those Member States whose law remains silent on the issue, lacks regulation or is not in line with the provisions on the freedom of establishment, to take appropriate legislative measures. However, a creation of a legal framework at the European level is still needed to provide a commonly-accepted procedure for such operations, to secure protection for vulnerable constituencies of a company, to prevent abusive practices and to regulate cooperation between the states which are involved in cross-border conversions.