Brexit: Corporate-law considerations

Despite the fact that more than two months have now passed since the UK decided to leave the EU, not one single decisive step has been taken towards an actual exit. It looks like it will be more of a marathon than a sprint. This is why there is good reason to wait and see.

It means that a Danish business considering cross-border mergers with UK companies or considering moving its registered office to the UK in a few years or granting a parent company loan to a UK parent company etc should not carry out such transactions immediately. Nor is there any reason immediately to start moving UK companies out of the UK because of Brexit.

Wait and see

There will be no legal changes in the near future. The UK is still a member of the EU and the current rules applying to companies resident in the EU also apply to UK companies until the UK leaves the EU. According to the Treaty, a notification of two years is required in order for a Member State to leave the EU and no one knows when the formal announcement to leave will be submitted, but it is expected that the earliest date will be sometime this autumn and it could take several years before such notification is given.

In the period until then, the UK together with the EU and the Member States will negotiate a large number of agreements and one possible scenario could be that the UK will get an agreement in the area of corporate law corresponding to the EEA with Norway. It would mean that there will be no significant difference between the state of the law before and after Brexit and it will be possible also to carry out cross-border mergers and gross-border moves involving UK companies.

Danish businesses and investors do not need to panic because of the corporate law rules. For example, it will not be necessary, because of the corporate law rules, to start any cross-border transactions such as cross-border mergers etc which were otherwise planned to take place sometime in the future.

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