THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 50(1) and (2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee [OJ C 62, 15.2.2019, p. 24.],

Acting in accordance with the ordinary legislative procedure [Position of the European Parliament of 18 April 2019 (not yet published in the Official Journal) and decision of the Council of 18 November 2019.],

Whereas:

(1) Directive (EU) 2017/1132 of the European Parliament and of the Council [Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law (OJ L 169, 30.6.2017, p. 46).] regulates cross‐border mergers of limited liability companies. The rules on cross-border mergers represent a significant milestone in improving the functioning of the internal market for companies and firms and their exercise of the freedom of establishment. However, evaluation of those rules shows that they need to be changed. Furthermore, it is appropriate to provide for rules regulating cross-border conversions and divisions, since Directive (EU) 2017/1132 only provides for rules on domestic divisions of public limited liability companies.