New law: European Commission issues alert on potential effect of Brexit on UK companies and their EU branches
Companies established in the EU should consider a Notice issued by the European Commission that UK companies and their branches in the EU will not necessarily be treated as having legal personality or limited liability by EU member states after Brexit.
The European Commission has recently issued a Notice to Stakeholders: withdrawal of the United Kingdom and EU rules on company law to alert them to company law issues arising from Brexit. For instance, after the UK leaves the EU, the UK will become a 'third country' and EU company law will no longer apply in the UK. Stakeholders include employees, creditors and investors dealing with UK companies.
One consequences is that UK companies will be treated as third country companies by EU countries, and their branches in the EU treated as branches of third country companies. This means that, depending on its national law, an EU member state will not necessarily recognise the legal personality and limited liability of UK companies whose central administration or principal place of business is in that member state.
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