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Simplification of corporate restructurings

Christian Temmel

The Austrian legislature is preparing for the implementation of Directive 2009/109/EC which has the aim of reducing administrative burdens relating to the publication and documentation regime of corporations within the EU. In particular, corporate restructuring law has been identified as one area imposing numerous information obligations on corporations, some of which appear outdated or excessive.

Austrian corporate law already provides for a number of reduced publication obligations, so that only a minor number of amendments (but with large impact) are envisaged. Since the deadline for the implementation of the Directive in Austrian law is June 30 2011, the Austrian legislature has prepared a draft Act on the amendment of, among other things, the Austrian Stock Corporation Act, the Act on Companies with Limited Liability, the Austrian De-Merger Act and the Austrian Companies Register Act. The draft provides for the following main amendments:

Simplification of upstream merger

Mergers between parent companies and their subsidiaries (where the parent company's holding in the subsidiary equals 100%) have a reduced economic impact on shareholders and creditors. The current extensive reporting and information regime will, therefore, be reduced by creating the possibility of waiving the requirement of reports to be produced by the management board, the supervisory board, and so on.

Simplification of proportionate de-mergers

A proportionate de-merger (by which the ratios of the shareholdings in the de-merged company and the company resulting from the de-merger will remain unchanged) will be simplified with regard to the reporting and information regime. Shareholders will be granted the right to waive the requirement of the reports of the supervisory boards.

Interim accounting statement can be omitted for listed companies in case of merger or de-merger

Listed companies which are required to prepare and publish semi-annual financial reports will be exempt from the obligation to draw up separate interim financial statements for the purposes of a merger or a de-merger (since the published semi-annual financial reports will be taken as a basis for such (de)merger)

Alternative publication of the draft merger/de-merger plan

The obligation to publish draft terms of a merger and/or de-merger through the companies register and a notice in Amtsblatt zur Wiener Zeitung (the official gazette) will be omitted if the required information is published through the official decision database of the Republic of Austria.

Compulsory registration of listed companies' websites

Listed stock corporations will be required to have their website registered with the Austrian companies register (other non-listed companies may do so in order to obtain the benefit of simplified publication requirements). Certain publications of such stock corporations will then only be required to be made online.

Christian Temmel

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