date | theme
24. August 2018 | UK-Limited and Brexit: Cross-border merger helps! (this contribution)
November 1, 2018 | Consequence of Brexit 2019: Limited no longer recognized in Germany!
4. November 2018 | Merger after share exchange violates lock period at GmbH & Limited
30. November 2018 | Limited conversion to Brexit: Avoid these 5 mistakes!
December 6, 2018 | Short-term solutions: converting Limited into GmbH (6 possibilities)
29. January 2019 | Limited in Germany no longer recognized after Brexit!
15. March 2019 | Brexit Tax Accompanying Act – Can the UK-Limited still be saved?
11. April 2019 | Brexit extension until 31.10.2019: merger of the Limited to GmbH possible again!
The completion of the “Brexit” is expected as early as March 2019. Despite the anticipated transition period until 2020, the UK’s exit from the EU is imminent. So there is a need for action for the Limited Companies by Shares (Ltd) with administrative headquarters in Germany. After that, UK-Limited will no longer be recognised as a corporation in Germany. This results in considerable tax and liability consequences.
1st Limited: Problems caused by the “Brexit”
On the one hand, the change will remove the limitation of liability of the English Limited. The shareholders are then liable again with their personal assets. In addition, many tax privileges for corporations are eliminated if the limited company is classified as a partnership or sole proprietorship according to practice. In addition, Brexit leads to the discovery of all hidden reserves.
In a recent article, we have already detailed the consequences of Brexit for the Limited. We also explained the five most common limited conversion errors.
The cross-border merger is the most favourable conversion method under tax law, with a focus on minimising risk. In this type of merger, the total assets of one company (UK Ltd.) are transferred to another company (D-GmbH). The assets of the transferring Limited form the share capital of the acquiring GmbH.
2.2. How does the conversion into a German GmbH proceed?
For this purpose, the cross-border merger of the Limited will take place as follows:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.