Halvorsen & Reith

Investment, M&A, reorganisation and redomiciliation across 40

Investment, M&A, reorganisation and redomiciliation cross-border work sits at the point where corporate structure meets timing: a board that moves too fast creates a governance gap, and a board that waits too long finds the gap has already become a filing. This practice covers the governance layer of that work across forty jurisdictions – what a board must resolve, what a register must record, and what a counterparty is entitled to see before it signs. It does not cover tax structuring, and it does not cover finding or supplying the people who sit on the board. The distinction matters more than it looks, because most disputes in this area start from someone assuming the second point was covered by the first.

A holding company agrees to acquire a subsidiary in a jurisdiction its board has never worked in before. The share purchase agreement is drafted, the closing date is fixed, and only then does someone ask whether the constitution of the target restricts the transfer, whether a regulator has a consent right, and whether the buyer's own board resolution is drafted in the form the local register will accept. Each question sits with a different set of people, and each has its own deadline.

This page sets out where the practice stops, the single axis that explains most of the difference between jurisdictions, and how to work out which axis applies to your structure before the transaction timetable makes the answer irrelevant.

What this practice covers – and where it stops

The practice covers four related pieces of work. Investment governance is the groundwork before capital moves: confirming who inside a target or a new subsidiary can bind it, and what a board must resolve before an investor's money is at risk. That groundwork is often run as a standalone check ahead of any transaction document (investment governance readiness). M&A governance is the board-level architecture around a transaction: the resolutions, the consents and the constitutional checks that sit behind the commercial terms. Reorganisation covers moving assets, shares or functions between entities in a group, and redomiciliation covers moving a company's seat, its register of incorporation, or its effective management from one jurisdiction to another.

The firm advises on all four. It maps what company law requires, drafts and reviews the governance documents that sit around a transaction, and assesses where exposure sits once a structure is in place. It does not act as a director, secretary, nominee shareholder or trustee for a client, and it does not supply, source or arrange for anyone else to do so. Where a role requires a trust or corporate service provider licence, that role sits with a licensed provider chosen by the client, not with this firm. This is not a matter of preference. In a majority of the jurisdictions covered here, offering to act as a director for a person outside a group – or arranging for someone else to – is a licensed activity, and offering it without the licence is itself the exposure the client came here to avoid.

The axis on which jurisdictions differ

Forty jurisdictions do not differ on whether a board needs to resolve before a transaction closes; nearly all of them require that. They differ on one axis: how much of the governance chain is tested by a registrar or a regulator before the transaction takes effect, as against how much is left for a court or a counterparty to test afterwards, if at all.

At one end sit jurisdictions where a registrar checks constitutional authority, share transfer restrictions and, in regulated sectors, a change-of-control consent before recording the change. The check happens once, before the filing, and after that the record is presumed correct. At the other end sit jurisdictions where the register accepts what is filed, and the constitutional check is left to whoever later has standing to challenge it – a minority shareholder, a liquidator, or a regulator acting after the fact.

This is the axis that determines how the risk in investment, M&A, reorganisation and redomiciliation cross-border transactions actually sits. A structure that would survive scrutiny in the first kind of jurisdiction can still fail in the second, not because the underlying governance was worse, but because nobody was required to check it before the filing became final. Redomiciliation sharpens the same axis further: some jurisdictions test solvency and creditor protection before releasing a company to migrate out, and others test nothing beyond the administrative filing, leaving the exposure with the directors who signed it.

A director who signs a resolution supporting a merger that later turns out to have needed a consent it never obtained carries that decision personally, and once the merger takes effect on the register the personal exposure survives even if the merger itself is later reversed.

Board and director layer

Every jurisdiction in this set requires that at least one governing body resolve on a transaction of this kind. What differs is who counts as that body, how many of them must resolve, and whether an outside director – one appointed to represent an investor rather than to manage the company – owes a different duty than an executive director sitting on the same board.

The board of directors is usually the correct starting point, but not always the only one. A shareholder resolution is required in most jurisdictions once a transaction crosses a defined threshold – a disposal of substantially all assets, an amendment to the constitution, or a merger – and the threshold is set by local company law, not by the transaction documents. Confirming who must resolve, and in what order, is the first governance question on any cross-border transaction, and it is answered differently enough between jurisdictions that assuming the answer from the last deal is a common source of delay.

Where a subsidiary board sits under an offshore holding structure, a second question follows immediately: does the subsidiary board have independent authority to resolve, or does the holding company's own board need to instruct it first? The answer changes the sequence of signatures, and getting the sequence wrong can mean re-executing documents after the fact – a correction that is visible on the record even when it changes nothing substantive.

Records, registers and what becomes public

A transaction that changes control, structure or seat almost always triggers an entry on a public or semi-public register. What is recorded, and how quickly, is the second point of difference between jurisdictions.

Some registers record only the fact of a change – a new registered office, a new director, a change of name – without recording the reason. Others require the underlying document, or a summary of it, to be filed alongside the change, which means the commercial terms of a reorganisation can become discoverable to a party that was never meant to see them. Confirming which category a jurisdiction falls into is part of the regulatory filing analysis that should happen before the transaction is signed, not after.

Beneficial ownership registers add a further layer. Many jurisdictions in this set require the beneficial owner of a company to be identified on a register that is either public or accessible to specified authorities, and a change of control usually triggers an update obligation with its own separate deadline, run independently of the corporate filing. Missing that update is not a paperwork lapse; in several jurisdictions it is a standalone offence, attaching to the company and, in some cases, to its officers.

Substance and where decisions are actually taken

A resolution signed in the right form is not enough if the decision behind it was not actually taken where the company says it was taken. Tax authorities and, increasingly, corporate registries ask where a board substantively decided, not only where the paperwork says it met.

Most jurisdictions now permit board meetings to be held by video, and the governance question is not whether that is allowed but what it does to the substance analysis – a board that never meets in the jurisdiction of incorporation faces a different set of questions than one that meets there occasionally and delegates operational matters elsewhere. Whether board meetings can be held by video is answered jurisdiction by jurisdiction, and the answer interacts directly with any substance requirement attached to the entity.

Reorganisations that shift functions between group entities without shifting where decisions are made create the same exposure in reverse: the register shows a change of structure, but the substance behind it has not moved, and a regulator that later tests the structure will look past the filing to where the decisions were actually taken.

Constitutional documents and shareholder arrangements

The constitution of a company – its articles, its by-laws, its memorandum, depending on the jurisdiction's own terminology – is the first document that should be checked before any transaction is signed, and it is the document most often checked last. Two provisions matter most for cross-border work: restrictions on transferring shares, and the majority required to amend the constitution itself.

Share transfer restrictions vary from a straightforward pre-emption right in favour of existing shareholders to a full board discretion to refuse a transfer without giving reasons. How far a company's articles can restrict share transfers is a question with a different answer in every jurisdiction, and the answer determines whether a buyer needs a waiver before signing or only before closing.

Shareholder agreements sit alongside the constitution and frequently pull in the opposite direction from it – a board consent required by the articles, layered with a shareholder consent required by contract, layered again with a change-of-control notice required by a finance agreement. Reconciling the three before a transaction, not after, is most of what separates a clean closing from a closing that generates correspondence for months afterwards.

Transactions and the governance conditions attached to them

Certain sectors attach a consent requirement to a change of control that has nothing to do with company law: financial services, insurance, telecommunications, and, in a growing number of jurisdictions, any sector treated as sensitive for national security screening. Change-of-control consent requirements in regulated sectors are compared across jurisdictions here, and the comparison is worth doing early, because a missed consent is rarely fixable by amending the transaction documents after signing.

Cross-border mergers raise a related but distinct governance condition: most jurisdictions require the merging entities to satisfy a solvency or creditor-protection test before the merger takes effect, and the form that test takes – a director's certificate, a court process, a creditor notice period – differs enough between jurisdictions that a merger structure built around one jurisdiction's process rarely transfers cleanly to another. Governance approvals required for cross-border mergers are compared across jurisdictions here.

Redomiciliation carries its own conditions again. A company migrating its seat typically needs to show that its home jurisdiction permits the migration, that its destination jurisdiction accepts continuation rather than requiring a fresh incorporation, and that no creditor or minority shareholder objection is outstanding at the point the migration takes effect.

Duties, liability and disputes

A director's duties do not pause during a transaction; if anything, they sharpen. Most jurisdictions in this set impose a duty to act in the company's interest, a duty to avoid conflicts, and a duty to exercise independent judgement, and a transaction is precisely the moment all three are tested at once – by the other side's counsel, by a minority shareholder, or later, by a liquidator.

Where a director signs off on a reorganisation that turns out to have been undertaken to defeat a creditor, the exposure does not stay with the company. Several jurisdictions allow a liquidator or a creditor to look through the transaction to the directors who approved it, and once the reorganisation has taken effect and the assets have moved, unwinding it is a court process with its own cost and its own uncertainty. The personal exposure becomes fixed at the moment of approval, not at the moment anyone notices the problem.

Disputes arising from this practice area rarely start as disputes about the transaction itself. They start as disputes about whether the governance behind it was sound – whether the right body resolved, whether a consent was obtained, whether a duty was discharged – and by the time that question is being litigated, correcting the underlying step is no longer available. That is the reason governance review before signing carries more weight than governance review after a dispute has already started.

How to identify which of the above applies to your structure

Four questions determine which part of this practice applies to a given structure, and they can be answered before any transaction document is drafted.

A structure that clears all four without a gap is rare enough that finding one is itself informative – it usually means the group has been through this analysis before. A structure that has a gap in any one of them is not unusual; it is the starting position for most of the work this practice does. The order in which the four are checked matters almost as much as the answers themselves, because a consent obtained late can still be obtained, while a filing made without one is a matter of record.

A transaction that has already been signed does not remove the governance gap; it only fixes the point from which the gap has to be corrected. If your board is resolving on an investment, an acquisition, a reorganisation or a redomiciliation and has not yet confirmed which body must resolve, whether a consent is required, or what becomes public once the filing is made, that confirmation is worth doing before signature rather than after.

Check what your jurisdiction requires. Write to info@hreithlaw.com with the jurisdiction and the structure.

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Frequently asked questions

Does investment, M&A, reorganisation and redomiciliation change for a foreign-owned company?
The governance steps are usually the same regardless of who owns the company, but a foreign-owned subsidiary often has an extra layer: the parent's own board may need to authorise the local board before it can resolve. Missing that extra authorisation is a common cause of a transaction being challenged after closing rather than before.
What does investment, M&A, reorganisation and redomiciliation require in practice?
In practice it requires identifying which body must resolve, checking the constitution and any shareholder agreement for restrictions, confirming whether a sector-specific consent applies, and understanding what the corporate and beneficial ownership registers will show once the transaction takes effect. Each of these can usually be confirmed before a transaction document is drafted.
Who inside the company is responsible for investment, M&A, reorganisation and redomiciliation?
Responsibility for resolving sits with the board of directors, and in many cases with the shareholders as well, depending on the size and nature of the transaction. Responsibility for the underlying analysis – confirming what the law and the constitution actually require – is usually delegated to whoever holds the company secretary function or, where none exists, to the board itself.
What evidence should the board keep on investment, M&A, reorganisation and redomiciliation?
A dated board resolution, a record of the constitutional and consent checks carried out before signing, and confirmation of what was filed and when. This evidence matters most in a dispute or a regulatory enquiry that arises after the transaction, when the question is not what happened but what the board knew at the time it resolved.
What happens if investment, M&A, reorganisation and redomiciliation is not addressed?
The transaction can still close, and the filing can still be accepted, because most registers do not test the underlying governance before recording a change. The exposure surfaces later – in a dispute, a regulatory review, or a subsequent transaction where a buyer's due diligence finds the gap the first transaction left behind.
How often should investment, M&A, reorganisation and redomiciliation be reviewed?
Before each transaction, rather than on a fixed schedule, because the governance requirement is triggered by the transaction, not by the calendar. A group running a programme of successive transactions across several jurisdictions benefits from a single review at the outset rather than repeating the same check for each deal.

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