The Companies (Cross-Border Mergers) Regulations 2007

JurisdictionUK Non-devolved
CitationSI 2007/2974

2007No. 2974

COMPANIES

The Companies (Cross-Border Mergers) Regulations 2007

15thOctober2007

16thOctober2007

15thDecember2007

CONTENTS

PART 1

GENERAL

1. Citation and commencement

2. Meaning of "cross-border merger"

3. Interpretation

4. The Companies Act 2006

5. Unregistered companies

PART 2

PRE-MERGER REQUIREMENTS

6. Court approval of pre-merger requirements

7. Draft terms of merger

8. Directors' report

9. Independent expert's report

10. Inspection of documents

11. Power of court to summon meeting of members or creditors

12. Public notice of receipt of registered documents

13. Approval of members in meeting

14. Approval of creditors in meeting

15. Documents to be circulated or made available

PART 3

COURT APPROVAL OF CROSS-BORDER MERGER

16. Court approval of cross-border merger

17. Consequences of a cross-border merger

18. Copy of order to be provided to members

19. Copy of order to be delivered to the registrar of companies

20. Obligations of transferee company with respect to articles etc

21. Notification of registration

PART 4

EMPLOYEE PARTICIPATION

CHAPTER 1

APPLICATION OF THIS PART

22. Application of this Part

CHAPTER 2

UK MERGING COMPANIES AND THE SPECIAL NEGOTIATING BODY

23. Duty on UK merging company to provide information

24. Complaint of failure to provide information

25. The special negotiating body

26. Composition of the special negotiating body

27. Complaint about establishment of special negotiating body

CHAPTER 3

NEGOTIATION OF THE EMPLOYEE PARTICIPATION AGREEMENT

28. Negotiations to reach an employee participation agreement

29. The employee participation agreement

30. Decisions of the special negotiating body

31. Decision not to open or to terminate negotiations

32. Complaint about decisions of special negotiating body

CHAPTER 4

ELECTION OF UNITED KINGDOM MEMBERS OF THE SPECIAL NEGOTIATING BODY

33. Ballot arrangements

34. Conduct of the ballot

35. Representation of employees

CHAPTER 5

STANDARD RULES OF EMPLOYEE PARTICIPATION IN A UK TRANSFEREE COMPANY

36. Merging Companies may select standard rules of employee participation

37. Application of the standard rules

38. The standard rules of employee participation

39. Limit on level of employee participation

40. Subsequent domestic mergers

CHAPTER 6

CONFIDENTIAL INFORMATION

41. Duty of confidentiality

42. Withholding of information by the transferee or merging company

CHAPTER 7

PROTECTION FOR EMPLOYEES AND MEMBERS OF SPECIAL NEGOTIATING BODY, ETC.

43. Right to time off for members of special negotiating body, etc.

44. Right to remuneration for time off under regulation 43

45. Right to time off: complaints to employment tribunals

46. Unfair dismissal of employee

47. Unfair dismissal of member of special negotiating body, etc.

48. Subsidiary provisions relating to unfair dismissal

49. Detriment

50. Detriment for member of special negotiating body, etc.

51. Detriment: enforcement and subsidiary provisions

52. Conciliation

CHAPTER 8

COMPLIANCE AND ENFORCEMENT

53. Disputes about operation of an employee participation agreement or the standard rules of employee participation

54. Misuse of procedures

55. Penalties

56. Exclusivity of remedy

CHAPTER 9

MISCELLANEOUS

57. CAC proceedings

58. Appeal Tribunal: location of certain proceedings under these Regulations

59. Appeal Tribunal: appeals from employment tribunals

60. ACAS

61. Restrictions on contracting out: general

62. Restrictions on contracting out: Chapter 7 of this Part

63. Amendments to the Employment Act 2002

64. Amendments to the Employment Appeal Tribunal Rules 1993

PART 5

AMENDMENTS TO LEGISLATION ON INSOLVENCY

65. Insolvency Act 1986

66. Insolvency (Northern Ireland) Order 1989

SCHEDULE 1-

Transitional modifications where provisions of Companies Act 2006 not in force

SCHEDULE 2-

Application of the Regulations in relation to Northern Ireland

The Secretary of State is a Minister designated for the purposes of section 2(2) of the European Communities Act 1972 1 in relation to the creation, operation, regulation or dissolution of companies and other forms of business organisation 2 and measures relating to employment rights and duties 3.

In exercise of the powers conferred by section 2(2) of that Act and sections 1102(2), 1105(2)(d) and 1106(2) of the Companies Act 2006 4 the Secretary of State makes the following Regulations:

PART 1

GENERAL

Citation and commencement

1.These Regulations may be cited as the Companies (Cross-Border Mergers) Regulations 2007 and come into force on 15th December 2007.

Meaning of "cross-border merger"

2.-

(1) In these Regulations "cross-border merger" means a merger by absorption, a merger by absorption of a wholly-owned subsidiary, or a merger by formation of a new company.

(2) In these Regulations "merger by absorption" means an operation in which-

(a) there are one or more transferor companies;(b) there is an existing transferee company;(c) at least one of those companies is a UK company;(d) at least one of those companies is an EEA company;(e) every transferor company is dissolved without going into liquidation, and on its dissolution transfers all its assets and liabilities to the transferee company; and(f) the consideration for the transfer is-(i) shares or other securities representing the capital of the transferee company, and(ii) if so agreed, a cash payment,

receivable by members of the transferor company.

(3) In these Regulations "merger by absorption of a wholly-owned subsidiary" means an operation in which-

(a) there is one transferor company, of which all the shares or other securities representing its capital are held by an existing transferee company;(b) either the transferor company or the transferee company is a UK company;(c) either the transferor company or the transferee company is an EEA company; and(d) the transferor company is dissolved without going into liquidation, and on its dissolution transfers all its assets and liabilities to the transferee company.

(4) In these Regulations "merger by formation of a new company" means an operation in which-

(a) there are two or more transferor companies, at least two of which are each governed by the law of a different EEA State;(b) every transferor company is dissolved without going into liquidation, and on its dissolution transfers all its assets and liabilities to a transferee company formed for the purposes of, or in connection with, the operation;(c) the consideration for the transfer is-(i) shares or other securities representing the capital of the transferee company, and(ii) if so agreed, a cash payment,

receivable by members of the transferor company;

(d) at least one of the transferor companies or the transferee company is a UK company.

Interpretation

3.-

(1) In these Regulations-

"the 1996 Act" means the Employment Rights Act 1996 5;

"the Appeal Tribunal" means the Employment Appeal Tribunal;

"the CAC" means the Central Arbitration Committee;

"the Companies Acts" has the same meaning as in section 2 of the Companies Act 2006;

"competent authority of another EEA State" means a court or other authority designated in accordance with the law of an EEA State other than the United Kingdom as competent for the purposes of Article 8 (appointment of independent expert), Article 10 (issue of pre-merger certificate) or Article 11 (scrutiny of completion of merger) of the Directive;

"the court" means-

(a) in England and Wales, the High Court,(b) in Scotland, the Court of Session, or(c) in Northern Ireland, the High Court;

"the Directive" means Directive 2005/56/EC on cross-border mergers of limited liability companies 6;

"director" has the same meaning as in the Companies Acts (see section 250 of the Companies Act 2006);

"directors' report" means a report prepared and adopted in accordance with regulation 8 (directors' report), and includes any opinion of the employee representatives which must accompany it in accordance with regulation 8(6);

"dismissed" and "dismissal", in relation to an employee, shall be construed in accordance with Part 10 of the 1996 Act;

"draft terms of merger" means a draft of the proposed terms of a cross-border merger drawn up and adopted in accordance with regulation 7 (draft terms of merger);

"EEA company" means a body corporate governed by the law of an EEA State other than the United Kingdom;

"employee" means an individual who has entered into or works under a contract of employment and includes, where the employment has ceased, an individual who worked under a contract of employment;

"employee participation" means the influence of the employees and/or the employee representatives in the transferee company or a merging company by way of the right to-

(a) elect or appoint some of the members of the transferee company's or the merging company's supervisory or administrative organ; or(b) recommend and/or oppose the appointment of some or all of the members of the transferee's or the merging company's supervisory or administrative organ;

"employee representatives" means-

(a) if the employees are of a description in respect of which an independent trade union is recognised by their employer for the purpose of collective bargaining, representatives of the trade union who normally take part as negotiators in the collective bargaining process, and(b) any other employees of their employer who are elected or appointed as employee representatives to positions in which they are expected to receive, on behalf of the employees, information-(i) which is relevant to the terms and conditions of employment of the employees, or(ii) about the activities of the undertaking which may significantly affect the interests of the employees,

but excluding representatives who are expected to receive information relevant only to a specific aspect of the terms and conditions or interests of the employees, such as health and safety, collective redundancies, or pension schemes;

"existing transferee company" means a transferee company other than one formed for the purposes of, or in...

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