Court of registration must make international change of (domestic) form possible

The court of registration may not refuse the application to the commercial register by a company from another EU Member State for an international change of (domestic) form with the justification that there is no statutory provision for this.

Background

The plaintiff, a company with limited liability (B. V.) founded in accordance with Dutch law wanted to move its registered and administrative office to Germany and to change its legal form to a German GmbH. The Duisburg court of registration rejected the application. Section 1 (1) UmwG [the German law on the transformation of companies] contains a definitive list of the permissible transformation processes and explicitly only includes transformations by legal entities with registered office in Germany. Paragraph 2 of the provision ensures this so-called “numerus clausus” by a prohibition of analogy. With the complaint, the Dutch company claims in particular that since the decision by the ECJ in the Vale case (judgment of 12.07.2012 − C-378/10) the international identity-preserving change of form of companies from other EU Members States to Germany is recognized.

The judgment of the OLG Düsseldorf

The OLG [Higher Regional Court] Düsseldorf first established that the German law on transformation does not stipulate any rules for a change of form with the involvement of a Dutch BV. In particular in Sections 191, 226 UmwG, which definitively determine the legal entities which have a change of form available to them and for them as a structural measure, the BV is not listed. With reference to the Vale decision of the ECJ, the OLG even clearly finds that it would represent a breach of the freedom of establishment secured under European law (Art. 49, 54 TFEU) to refuse a company subject to the law of another Member State a change of form to a GmbH according to German law insofar as such a change in form is possible for German companies. So long as the legislator has not issued any rules on this issue, it is the task of the courts to interpret the national provisions of the law on transformations in a way which complies with EU law and to review the registration requirements on the basis of this.

Comment

It is above all the facts of the case which are surprising in the decision of the OLG Düsseldorf: In view of the formidable pool of higher court decisions, it is a wonder that the court of registration had only argued from the perspective of national legal requirements and ignored the EU freedom of establishment. The Higher Regional Courts Nuremburg (decision of 19.06.2013 – 12 W 520/13), Frankfurt (decision of 03.01.2017 – 20 W 88/15) as well as the Court of Appeal in Berlin (21.03.2016 – 22 W 64/15) had already declared international changes in form to be lawful with a corresponding application of Section 190 et seq. UmwG. Other commercial registers - even without leading precedent - undertook similar registrations shortly after the Vale decision.

Conversely, the decision also shows the dilemma of courts of registration: They should on the one hand assist in the application of EU law. On the other hand, they must take account of the particulars of legal border crossing, in particular to guarantee the protection of domestic employees, creditors and minority shareholders. So long as the legislator does not set out any binding guidelines for this, the success of an international change of form depends above all on the cooperation of the responsible court of registration and particularly meticulous preparation by specialists.