The European Commission has presented a proposal for a Directive to make cross-border mergers easier, by overcoming obstacles caused by different national laws. It would make such mergers simpler for all companies with share capital. However, it would be especially useful for small and medium-sized businesses who want to operate in more than one Member State, but not throughout Europe, and thus are not likely to seek incorporation under the European Company Statute.
The proposed Directive would set up a cross-border merger procedure whereby mergers would be governed in each Member State by the principles and rules applicable to %%%%domestic%%%% mergers. The proposed Directive would fill an important gap in company law and is the first measure to be presented under the Commission%%%%s Action Plan on company law and corporate governance in the European Union, published in May 2003.
The proposal for a Directive will be submitted for adoption under the so-called %%%%co-decision%%%% procedure to the European Union%%%%s Council of Ministers (subject to qualified majority voting) and the European Parliament.