Amendment to the Act on Transformations
Written By
On 19 June 2024, the expected amendment to the Act on Transformations of Business Corporations and Cooperatives was published in the Collection of Laws. The amendment mainly transposes Directive (EU) 2019/2121 of the European Parliament and of the Council.
In addition to harmonising the process of cross-border transformations, unifying the regulation and reducing the administrative burden, the amendment also introduces a completely new form of transformation.
Below we summarise the key changes.
How do the rights of creditors of the persons involved in the transformation change?
If the creditors of the persons involved in the transformation want to successfully exercise their right to sufficient security in court, they must do so within three months (currently six months) from the date the transformation plan is published in the Collection of Deeds of the Commercial Register or on the website in line with the terms of the Act on Transformations.
The scope of claims is also expanded to include future and contingent receivables, if such claims arise from liabilities incurred before the publication.
Formal requirements regarding the Commercial Journal removed
The amendment also removes the existing (chargeable) obligation to publish in the Commercial Journal: (i) a notice of filing the transformation plan in the Collection of Deeds; and (ii) a notice to creditors and other persons. The filing of the transformation plan and the notice to creditors in the Collection of Deeds of the Commercial Register maintained by the competent registry court at least one month before the date on which the transformation is to be approved will thus be sufficient.
Demerger through separation
The amendment extends the existing forms of demerger (i.e., spin-off and split-off) by a third type, the so-called demerger by separation. In demerger by separation, the company being demerged is not dissolved and the separated part of the assets is transferred, in exchange for the share(s), to one or more newly created or existing companies. A combination of both of the above types (i.e. a combination of separation with the creation of a new or new companies and a separation with absorption) is also possible under the new regulation.
When will the new rules apply?
The amendment enters into force on 19 July 2024.
