Following on from the end of the implementation period, the UK government has reissued various guidance documents on the changes for corporate entities taking effect from 1 January 2021. Both the UK and the EU are keeping their Brexit-related guidance under review.
From 1 January 2021, EU entities, such as societas Europaea (SEs) and European economic interest grouping (EEIGs) can no longer be registered in the UK. Any SEs that were still registered in the UK on 1 January 2021 have been automatically converted to a UK societas and any EEIGs have been automatically converted to UK economic interest groupings (UKEIGs).
UK branches of SEs registered in another EU member state and companies with a registered UK establishment whose home country is inside the European Economic Area (EEA) will need to report the same information as overseas companies and publish additional information on materials for customers.
UK companies with EEA corporate officers will need to comply with additional filing requirements.
UK businesses with a presence in the EU should consider the requirements in the particular member state.
Accounting, audit and other compliance
There are changes to the UK’s reporting regime from 1 January 2021 and group structures including EEA entities will need to take further action. There are also new rules concerning auditors and audit firms.
Entities that are party to joint venture agreements should review the terms to understand if there are any implications to the arrangements after 1 January whether commercially or because the joint venture operates cross-border.
While Brexit may not directly impact the mechanics of carrying out a private M&A transaction, there may need to be extra work depending on the nature of the transaction. This could include increased due diligence to understand the impact of Brexit on the proposed target, additional warranties in the sale and purchase agreement and considerations around merger control.
Cross-border mergers are no longer able to take place from 1 January 2021.
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