## Facts

- Cartesio Oktató és Szolgáltató bt (Cartesio) was a limited partnership formed under Hungarian law, with its registered office and central administration initially in Hungary.
- Cartesio decided to move its central administration to Italy, while intending to remain a company governed by Hungarian law.
- Under Hungarian law at the time, a company’s “seat” (registered office) was defined as the place of its central administration.
- Cartesio applied to the Hungarian commercial register to amend its seat from Hungary to Italy.
- The Hungarian court responsible for the commercial register refused the amendment because Hungarian law did not allow a company incorporated in Hungary to move its seat abroad while retaining Hungarian-law status (absent winding up and re-formation under another law).
- Cartesio appealed the refusal, claiming the decision restricted freedom of establishment under Articles 43 and 48 EC (now Articles 49 and 54 TFEU).
- The Szegedi Ítélőtábla (Szeged Regional Court of Appeal) made a reference to the Court of Justice for a preliminary ruling under Article 234 EC (now Article 267 TFEU), raising both substantive freedom-of-establishment questions and questions about the national procedure for making (and potentially challenging) a reference.

## Issues

1. Do Articles 43 and 48 EC preclude Hungarian rules that prevent a company incorporated under Hungarian law from transferring its seat to another Member State while retaining its status as a company governed by Hungarian law?
2. Is an appellate court reviewing a commercial-register decision a “court or tribunal” entitled to refer questions under Article 234 EC even if the proceedings are not inter partes?
3. May national procedural rules (including review by a higher court) restrict or set aside a national court’s decision to make a preliminary reference in a way that limits the referring court’s ability to seek a ruling from the Court of Justice?

## Decision

- The Court held that, as Community law then stood, Articles 43 and 48 EC did not preclude legislation of a Member State under which a company incorporated under that Member State’s law may not transfer its seat to another Member State while retaining its status as a company governed by the law of the Member State of incorporation.
- The Court reasoned that, absent EU harmonization on the connecting factor for companies (registered office/real seat), the Member State of incorporation may set the conditions for a company’s incorporation and continued existence under its law, including rules tying company status to the location of its seat/central administration.
- The Court stated that freedom of establishment covers a company’s conversion into a company governed by the law of another Member State—without winding up or liquidation—if the host Member State’s law permits such a conversion (an observation made in the judgment while distinguishing Cartesio’s situation).
- On Article 234 EC, the Court held that a court hearing an appeal against a decision of a lower court responsible for maintaining the commercial register can qualify as a “court or tribunal” entitled to make a reference, even if the procedure is not inter partes.
- The Court emphasized that Article 234 EC grants national courts broad discretion to refer questions, and national procedural mechanisms cannot deprive the court seised of the case of the power to maintain a reference it considers necessary for its decision.

## Legal Principles

- In the absence of EU harmonization, Member States retain authority to determine the connecting factor required for a company to be formed under, and remain governed by, their national law (for example, rules linking company status to the location of the central administration).
- Freedom of establishment does not, by itself, require the Member State of incorporation to allow a company to move its seat to another Member State while keeping its original governing law and legal status.
- EU law may protect a cross-border move structured as a conversion into a host-state company (with a change in governing law) without winding up or liquidation, where the host Member State’s law allows that form of conversion.
- A national body deciding an appeal from a commercial-register refusal may be a “court or tribunal” for purposes of Article 234 EC even where the proceedings are not inter partes.
- National rules on appeals or supervision of reference decisions must not interfere with the referring court’s discretion under Article 234 EC to request a preliminary ruling when it considers EU-law interpretation necessary to resolve the case before it.

## Conclusion

Cartesio confirms that EU freedom of establishment did not oblige Hungary to register a seat transfer to Italy where the company sought to remain governed by Hungarian law, while also indicating that establishment rights can apply to cross-border conversion into a host Member State’s company form when host law permits, and it reinforces that national courts must be free to make and maintain preliminary references without national procedures stripping them of that discretion.


Cartesio Oktató és Szolgáltató bt, Case C-210/06, 2008 E.C.R. I-9641 (2008)