The Cross-Border Change of Legal form as an Alternative to Transnational Mergers? A Comparative Study

Abstract

In the area of business law and enterprises, the internationalization of business activities and the transnational choice of legal form is playing an increasingly important role. This is especially true in times of globalization and a common internal market within the European Union (EU). Consequently, companies are increasingly confronted with legal questions of cross-border choice of legal form and transformations. Here, the cross-border change of legal form can offer an alternative to a merger. Compared to mergers, the cross-border change of legal form of corporations within the EU/EEA is easier to carry out and more flexible. This study introduces the concept and the functioning of the cross-border change of legal form, and elaborates its potential and its limitations in comparison to transnational mergers. The cross-border change of legal form offers a new possibility of transnational reorganization. This article provides the theoretical and legal basis and supports the decision-making in transnational conversions, in which cases a cross-border change of legal form and in which cases a transnational merger should be carried out.