Case C‑106/16
Proceedings brought by Polbud — Wykonawstwo sp. z o.o.
(Request for a preliminary ruling from the Sąd Najwyższy)
(Reference for a preliminary ruling — Freedom of establishment — Cross-border conversion of a company — Transfer of its registered office without transfer of its real head office — Refusal to remove it from the commercial register — National legislation whereby removal from commercial register is dependent on the winding up of a company after a liquidation procedure — Scope of freedom of establishment — Restriction on freedom of establishment — Protection of the interests of creditors, minority shareholders and employees — Prevention of abusive practices)
Summary — Judgment of the Court (Grand Chamber), 25 October 2017
1. Judicial proceedings — Oral part of the procedure — Reopening — Obligation to reopen the oral procedure to enable the parties to lodge observations on points of law raised in the Opinion of the Advocate General — None
(Art. 252, second para., TFEU; Rules of Procedure of the Court of Justice, Art. 83)
2. Questions referred for a preliminary ruling — Jurisdiction of the Court — Limits — Jurisdiction of the national court — Necessity of a question referred and relevance of the questions raised — Assessment by the national court
(Art. 267 TFEU)
3. Freedom of movement for persons — Freedom of establishment — Provisions of the Treaty — Scope — Transfer of the registered office of a company under national law to another Member State, without transfer of its real head office — Included
(Arts 49 TFEU and 54 TFEU)
4. Freedom of movement for persons — Freedom of establishment — Restrictions — Transfer of the registered office of a company under national law to another Member State, without transfer of its real head office — National legislation whereby the liquidation of the company is a prerequisite of transfer — Not permissible — Justification —None
(Arts 49 TFEU and 54 TFEU)
1. See the text of the judgment.
(see paras 23, 24)
2. See the text of the judgment.
(see para. 27)
3. Articles 49 and 54 TFEU must be interpreted as meaning that freedom of establishment is applicable to the transfer of the registered office of a company formed in accordance with the law of one Member State to the territory of another Member State, for the purposes of its conversion, in accordance with the conditions imposed by the legislation of the other Member State, into a company incorporated under the law of the latter Member State, when there is no change in the location of the real head office of that company.
Under the second paragraph of Article 49 TFEU, read in conjunction with Article 54 TFEU, the freedom of establishment for companies or firms covered by the latter article includes, inter alia, the right to set up and manage such companies or firms under the conditions laid down, by the legislation of the Member State where such establishment is effected, for its own companies or firms. Freedom of establishment therefore encompasses the right of a company or firm formed in accordance with the legislation of a Member State to convert itself into a company or firm governed by the law another Member State (see, to that effect, judgment of 27 September 1988, Daily Mail and General Trust, 81/87, EU:C:1988:456, paragraph 17), provided that the conditions laid down by the legislation of that other Member State are satisfied and, in particular, that the test adopted by the latter State to determine the connection of a company or firm to its national legal order is satisfied.
The Court has held that freedom of establishment extends to a situation in which a company formed in accordance with the legislation of one Member State, where it has its registered office, wants to set up a branch in another Member State, even where that company was formed, in the first Member State, solely for the purpose of establishing itself in the second, where its main, or indeed entire, business is to be conducted (see, to that effect, judgment of 9 March 1999, Centros, C‑212/97, EU:C:1999:126, paragraph 17). Equally, a situation in which a company formed in accordance with the legislation of one Member State wants to convert itself into a company under the law of another Member State, with due regard to the test applied by the second Member State in order to determine the connection of a company to its national legal order, falls within the scope of freedom of establishment, even though that company conducts its main, if not entire, business in the first Member State.
Second, as regards the judgments of 27 September 1988, Daily Mail and General Trust (81/87, EU:C:1988:456), and of 16 December 2008, Cartesio (C‑210/06, EU:C:2008:723), it does not follow, contrary to the submissions of the Polish Government, that the transfer of the registered office of a company should necessarily be accompanied by the transfer of its real head office in order to fall within the scope of freedom of establishment.
On the contrary, it follows from those judgments, and from the judgment of 12 July 2012, VALE (C‑378/10, EU:C:2012:440), that, as EU law currently stands, each Member State has the power to define the connecting factor required of a company if that company is to be regarded as incorporated in accordance with its national legislation. In the event that a company governed by the law of one Member State converts itself into a company under the law of another Member State while satisfying the conditions imposed by the legislation of the latter if it is to exist within its legal order, that power, far from implying that the legislation of the Member State of origin on the incorporation or winding-up of companies enjoys any immunity from the rules relating to freedom of establishment, cannot provide justification for that Member State preventing or deterring the company concerned from undertaking a cross-border conversion by means of, in particular, the imposition, with respect to such a cross-border conversion, of conditions that are more restrictive than those that apply to the conversion of a company within that Member State itself (see, to that effect, judgments of 27 September 1988,Daily Mail and General Trust, 81/87, EU:C:1988:456, paragraphs 19 to 21; of 16 December 2008, Cartesio, C‑210/06, EU:C:2008:723, paragraphs 109 to 112; and of 12 July 2012, VALE, C‑378/10, EU:C:2012:440, paragraph 32).
(see paras 33, 38, 42-44, operative part 1)
4. Articles 49 and 54 TFEU must be interpreted as precluding legislation of a Member State which provides that the transfer of the registered office of a company incorporated under the law of one Member State to the territory of another Member State, for the purposes of its conversion into a company incorporated under the law of the latter Member State, in accordance with the conditions imposed by the legislation of that Member State, is subject to the liquidation of the first company.
Accordingly, although it may in principle transfer its registered office to a Member State other than the Republic of Poland without the loss of its legal personality, a company incorporated under Polish law, such as Polbud, that wishes to make such a transfer, can obtain the removal of its name from the Polish commercial register only if it has been liquidated.
In those circumstances, the Court must hold that the national legislation at issue in the main proceedings, by requiring the liquidation of the company, is liable to impede, if not prevent, the cross-border conversion of a company. It therefore constitutes a restriction on freedom of establishment (see, to that effect, judgment of 16 December 2008 Cartesio, C‑210/06, EU:C:2008:723, paragraphs 112 and 113).
It must be observed that that legislation prescribes, in general, mandatory liquidation, there being no consideration of the actual risk of detriment to the interests of creditors, minority shareholders and employees and no possibility of choosing less restrictive measures capable of protecting those interests. As regards, in particular, the interests of creditors, as stated by the European Commission, the provision of bank guarantees or other equivalent guarantees could offer adequate protection of those interests.
It follows that the mandatory liquidation required by the national legislation at issue in the main proceedings goes beyond what is necessary to achieve the objective of protecting the interests referred to in paragraph 56 of the present judgment.
Moreover, the mere fact that a company transfers its registered office from one Member State to another cannot be the basis for a general presumption of fraud and cannot justify a measure that adversely affects the exercise of a fundamental freedom guaranteed by the Treaty (see, by analogy, judgment of 29 November 2011, National Grid Indus, C‑371/10, EU:C:2011:785, paragraph 84).
Since a general obligation to implement a liquidation procedure amounts to establishing a general presumption of the existence of abuse, the Court must hold that legislation, such as that at issue in the main proceedings, which imposes such an obligation, is disproportionate.
(see paras 49, 51, 58, 59, 63-65, operative part 2)