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Company Law UK

Cartesio-domen

Wednesday, April 21, 2010

Cartesio (case number: C-210/06, pending)

Cartesio is a Hungarian limited partnership whose application for registration of the transfer of its seat to Italy was rejected by the Hungarian Court of Registration. Cartesio intended only to transfer its de facto head office to Italy, while continuing to operate under Hungarian company law.

EC-law implications

Because of the refusal to enter transferral of the de facto head office in the Hungarian Company Register the question was referred to the ECJ, to determine whether Articles 43 and 48 EC Treaty preclude a member state from imposing an outright ban on a company incorporated under its legislation transferring its de facto head office to another member state without having to be wound up in Hungary first, and to have the seat transfer entered in the Hungarian Company Register.

It should be underlined that the Cartesio case is to a considerable extent similar to the ECJ’s Daily Mail Decision, since it also raises the question of the transfer abroad of the de facto head office. The outcome could be that the ECJ comes to the conclusion that an outright ban on seat transfers is not compatible with the EC Treaty. At the same time, it will not be necessary to overrule Daily Mail in principle in this context because in Daily Mail an outright ban was not at stake.

Since Cartesio deals with the transfer of the de facto head office and not of the registered office, it is astonishing that the EC Commission refers to Cartesio as justification for halting all work on the 14th Company law directive (Directive on the transfer of the registered office of limited liability companies). A decision concerning the transfer of a company’s registered seat would be possible only as an obiter dictum, which is not likely, as the Sevic decision has shown.

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