101 UK Brexit Notes

Connemara Programme October 16 2018 pg. 177 Justice Portal. Information on restrictions in particular service sectors in other countries including EU member states can be found via the Organisation for Economic Co- operation and Development. UK businesses that own or run business operations in EU member states will likely face changes to the law under which they operate, depending on the sector and EU member state. For example, this could involve meeting additional requirements in order to acquire real estate and/or requiring additional approvals to operate. Restrictions may be more burdensome for branches or representative offices, as opposed to subsidiaries which have their own legal identity and are incorporated in the EU member state concerned. UK companies and limited liability partnerships that have their central administration or principal place of business in certain EU member states may no longer have their limited liability recognised. This is the case in certain jurisdictions that operate the ‘real seat’ principle of incorporation. Cross-border mergers involving UK companies will no longer be able to take place under the EU Directive 2005/56/EC - cross-border mergers of limited liability companies (although they can be structured through private contractual arrangements). As the UK will no longer be an EU member state, the remaining EU member states will no longer be required to give effect to cross-border mergers that do not complete prior to the UK exiting the EU. UK investors in EU businesses (whether these are individuals, businesses or investment funds) may face restrictions on the amount of equity that they can hold in certain sectors in some EU member states. For example, a UK audit firm could no longer be the majority owner of an EU audit firm because it would no longer be recognised among the majority of qualified owners or managers that an EU audit firm is required to have under EU law. European specific entities European Economic Interest Groupings, European Public Limited-Liability Companies (or Societas Europaea) and European Groupings of Territorial Cooperation will no longer be able to be registered in the UK. Those that remain registered in other EU member states after exit will still be able to trade in the UK as now. UK members of European Economic Interest Groupings registered in other EU member states will be unable to continue to participate in the European Economic Interest Grouping unless the contract under which they are formed allows them, or is amended to allow them, to do so. For Societas Europaea and European Economic Interest Groupings that are registered in the UK and have not made alternative arrangements before exit, the government will put in place a way of automatically converting them into a new UK corporate structure so that they will have a clear legal status post exit. For Societas Europaea this will include maintaining the employee involvement provisions. The European Groupings of Territorial Cooperation regime already has an option allowing public authorities of non-EU countries to participate and the government will keep this. Actions for businesses and other stakeholders Cross-border business operations UK citizens operating in the EU may wish to seek professional advice or contact the government of the country in which they own, manage, or direct a company for more information. UK businesses operating in the EU may wish to seek professional advice or contact the government of the country in which they operate for more information. UK companies and limited liability partnerships that have their central administration or principal place of business in an EU member state may wish to consider whether they need to restructure to satisfy the requirements for incorporation in that EU member state. Any UK companies that are undertaking a cross-border merger will need to ensure that they can complete the merger before exit and may want to seek legal advice on their individual case. UK investors in EU businesses may wish to make themselves aware of any restrictions that might be placed on them within the EU member state in which they are operating. Further information on the requirements in EU member states can be found via the European e-Justice Portal. Information on restrictions in particular service sectors in other countries including EU member states can be found via the Organisation for Economic Co-operation and Development. European specific entities Before exit, European Economic Interest Groupings registered in the UK may want to consider transferring their official address to another EU member state and should make themselves aware of the timeframes for so doing. European Economic Interest Groupings with their official address in other EU member states can have an establishment in the UK; they will need to ensure that they comply with the registration requirements within the regulations. Societas Europaea have the option of converting to a UK public limited company (plc) provided they have been registered as a Societas Europaea for at least 2 years or have had 2 sets of annual accounts approved. They may also want to consider whether they wish to move their seat of incorporation to another EU member state. They will need to consider the relevant timeframes for either course of action. Owners of Societas Europaea and European Economic Interest Groupings may wish to maintain awareness of the further information that will be published on the automatic conversion of their entities to a new UK structure by ensuring that the contact details held by Companies House are up to date. After exit, Societas Europaea registered in EU member states will need to register their existing and any future UK establishments/branches with Companies House.