Transcript Slide 1

European company
forms: EEIG, SE, SPE
and SUP proposal
Doc dr Tatjana Jevremović Petrović
European company forms
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Competition reasons, psyhological reasons, uniformity
of company law, different national laws ...
Harmonization by Directives
Special european forms, regulated by Regulations
(unification, not only approximation of laws) – legal
base art. 352 of the TFU (ex art. 308) (unanimity and
consultation of the European Parliament)
EEIG, SE, SCE (European co-operative society), SPE
proposal, European foundation proposal (FE), SUP
proposal
EEIG
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European Economic Interest Grouping - Council
Regulation (EEC) No 2137/85 of 25 July 1985 on the
European Economic Interest Grouping (EEIG)
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groupement européen d'intérêt économique (GEIE)
Europäischen wirtschaftlichen Interessenvereinigung
(EWIV)
Evropsko gospodarsko interesno združenje (EGIZ)
Not common in practice: legal firms, some industrial
cooperation (FIAT)
EEIG
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EEIG has the capacity, name, rights and obligations
of all kinds, right to make contracts or accomplish
other legal acts, and to sue and be sued.
Member States shall determine whether or not
EEIG has legal personality.
Main purpose of a EEIG is to facilitate or develop
the economic activities of its members and to
improve or increase the results of those activities.
Its purpose is not to make profits for itself.
Unlimited joint and several liability of members for
all transactions in name and on behalf of EEIG
SE - Introduction
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SE background – fighting the competition
European internal market – mobility issues
European label (Allianz SE)
Removal of national differences (?)
Proposed SE – Nordea SE (before)
Nordea AB (Sweden)
Nordea Bank Finland PLc (Finland)
Bank (Sweden)
Bank (Norway)
Bank (Danmark)
Bank (Finland)
Proposed SE – Nordea SE (after)
Nordea SE
Branch (Finland)
Branch (Danmark)
Branch (Norway)
SE – History of proposals
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Prof. Sanders – idea for the SE
EC Commission proposals:
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1970/1975
1989/91
Political agreement on Nice Summit of the European Council, December
2000
2001 Statute for a SE adopted + Directive on employee participation
Council Regulation (EC) No 2157/2001 of 8 October 2001 on
the Statute for a European company
Council Directive 2001/86/EC of 8 October 2001
supplementing the Statute for a European company with regard
to the involvement of employees [Official Journal L 294,
10.11.2001].
SE – General provisions
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Form of a European public limited-liability company
Capital of 120 000 euros, divided in shares
Registered and head office in same MS, possibility of
transfering registered and head office into another MS
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Transfer proposal (obligatory content)
Report done by administrative/management board
Information and protection of shareholders and creditors
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Adequate protection before the competent authority issues the
certificate
SE – General provisions
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Certification of formalities and procedures and registration of
SE
New registration and information of the previous register
(deletion of the old registration)
Publication
Change of applicable law (possibility for MS to oppose the
transfer of the public interest grounds in two months period)
SE – General provisions
Impossible if proceedings for winding up,
liquidation, insolvency or suspension of payments or
other similar proceedings have been brought against
it
 Protection of public interest
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in respect of any cause of action arising prior to the
transfer – previous seat
 Explicit mention of the public bodies as creditors –
adequate protection
 satisfaction or securing of payments to public bodies
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SE – Formation
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Public limited-liability companies by means of a
merger provided that at least two of them are governed
by the law of different Member States.
Public and private limited-liability companies by
formation of a holding SE provided that each of at
least two of them:
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(a) is governed by the law of a different Member State, or
(b) has for at least two years had a subsidiary company
governed by the law of another Member State or a branch
situated in another Member State.
SE – Formation
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Companies and firms may form a subsidiary
SE by subscribing for its shares, provided that
each of at least two of them:
(a) is governed by the law of a different Member
State, or
 (b) has for at least two years had a subsidiary
company governed by the law of another Member
State or a branch situated in another Member State.
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SE – Formation
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A public limited-liability company may be transformed into an
SE if for at least two years it has had a subsidiary company
governed by the law of another Member State.
An SE may be converted into a public limited-liability company
governed by the law of the Member State in which its registered
office is situated. No decision on conversion may be taken
before two years have elapsed since its registration or before the
first two sets of annual accounts have been approved.
No ex-nihilo foundation (circumvention by shelft SE)
Cross-border character of operation (not for purely domestic
reasons)
SE – Applicable law (art. 9)
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1. An SE shall be governed:
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(a) by this Regulation,
(b) where expressly authorized by this Regulation, by the provisions of its statutes
or
(c) in the case of matters not regulated by this Regulation or, where matters are
partly regulated by it, of those aspects not covered by it, by:
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(i) the provisions of laws adopted by Member States in implementation of Community
measures relating specifically to SEs;
(ii) the provisions of Member States' laws which would apply to a public limited-liability
company formed in accordance with the law of the Member State in which the SE has
its registered office;
(iii) the provisions of its statutes, in the same way as for a public limited-liability
company formed in accordance with the law of the Member State in which the SE has
its registered office.
2. The provisions of laws adopted by Member States specifically for the SE
must be in accordance with Directives applicable to public limited-liability
companies.
Structure of the SE
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An SE shall comprise:
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(a) a general meeting of shareholders and
(b) either a supervisory organ and a management organ (twotier system) or an administrative organ (one-tier system)
depending on the form adopted in the statutes. (party autonomy)
One tier system: administrative organ
Two tier system: management and supervisory board
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Structure irrespective of the national system adopted, same in
the case of transfer of the company’s seat (change of
applicable law, but no obligatory adoption of the imperative
company law provisions regarding structure of the company)
Structure of the SE
- The 1975 Proposal contained detailed provisions
on (corporate governance) remuneration,
responsibilities, conflicting interests, insider
trading, and even investigation procedure
initiated by minority shareholders;
- The 2001 SE Regulation is relatively ‘poor’, as it
is restricted to certain matters only
SE and Corporate Governance
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Board structure is closely linked to the ‘corporate governance
debate’
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Recommendations High Level Group Reports 2002
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independence and competence of board members
one tier: distinction between executives and non executives
remuneration
formation of board committees
internal/external audit committees
duty of care and business judgment rule
duty of loyalty
conflicting interests
financial statements
wrongful trading
SE and national laws on Corporate
Governance
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Only one tier board adopted (UK, Greece)
Both systems allowed (France, Belgium)
Only two tier board adopted (Germany, Austria, Czech
Republic)
Problems:
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Different board structure of the SE
Application of the national law provisions for public limited
liability companies
What (national) provisions would apply ?
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Possible but no obligatory additional national rules on the board
structure and its functioning
Employee participation in one tier board structure
SE – Employee participation
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Directive on employee participation in SE based
on “before and after” principle
Formation of special negotiating body
Adoption of standard rules by MS, which can be
applied if negotiating body so decides, plus
deadlines for negotiations.
SE today
SE today
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State of Art: 4 Feb 2015 2278 established SE
Data: http://ecdb.worker-participation.eu/
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In Jun 2009 out of 725 companies following structure:
86 ‘shelf companies’ (for sale)
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www.foratis.com. 132 000 € (share capital 120 000€)
183 UFO (presumably with operation and employees; however little or
nothing known)
41 ‘empty’ (with operation, but without employees)
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Usually motivated by circumvention of laws (national rules on
company’s structure, employee participation) and not by
economic reasons (cross-border mobility)
Almost half of SE’s founded in Czech Republic (among which
115 shelf and 375 UFO companies)
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Reasons for operating firms: European image of the SE, reduction of the
members in board structures (and one-tier system), mobility (2 cases)
Operating in Serbia (example Strabag SE, BASF SE)
SE today – Allianz SE
Example - Allianz Versicherungen AG
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Acquisition of all shares in subsidiary companies, followed by
Setting up SE together with Italian insurance company RAS which had been
acquired as well
All existing subsidiary companies transformed to dependent branches
Leading motive
- Abolish supervision in each MS where a subsidiary resides
- Exclusive supervision by the financial and banking authority (‘Basel II’)
where SE itself resides (covering dependent branches as well)
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Source: Dr. S.F.G. Rammeloo December 2009, European Company Law
(3) EU Law Business formats EEIG; SE; (future) SPE
SPE
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Idea: Jeanne Bouchourevliev: ‘Pour une Sàrl
Européenne’ (1973)
Conference “Pour un societe fermée
européenne” 1997
Commission public consultation 2007
Commission Proposal 2008
European Parliament procedure by March 2009
SPE - Background
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SME’s
Compared to SE:
Minimum capital
 Creation ab initio
 National rules on private companies
 SE - european company?
 Contractural nature
 No cross-border element
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SPE – Proposal
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Same, simple, flexible company law provisions
across the Member States
Psyhological effect
Right to move across internal market – change of
registered office
SPE – General provisions
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Legal basis: Art. 352 – unanimity
The SPE is a company having legal personality
and share capital, but not able to offer publicly
its shares
It may be set up by one or more founders,
natural persons and/or companies or firms
under Article 54 of the EC Treaty. In addition,
an SE, an SCE, EEIG or SPE may also take part
in the formation of an SPE.
SPE – Applicable rules
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An SPE is governed by the directly applicable mandatory
provisions of the Regulation. These rules facilitate the
formation and ensure the necessary uniformity of the SPE
in the EU.
The internal organization of the SPE, is to be regulated in
the articles of association
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Party autonomy (no dispositive rules)
The articles of association of an SPE shall regulate at
least the following: foundation, shares, capital and
organisation
In matters covered by the SPE Statute, national company
law is only relevant where specified by the Regulation
(directors’ duties).
SPE – Basic rules
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Minimum capital 1 (8000) euro
Creation ex nihilo, transformation, division,
merger
Registered office might be different from real
office – possiblities to change registered office with
change of applicable law and without dissolution
SPE – Internal organization
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The articles determine the management structure of the
SPE:
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Single director or several directors,
One-tier board system or
Two-tier board system
Directors duties and liabilities (much improved than SE)
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Secondary application of the national provisions of applicable law
GM possible, but not necessary as an independent organ
(obligatory decisions by shareholders through other mechanism)
R. Drury defines: - ‘management managed SPE’
- ‘shareholder managed SPE’
SPE – Employee representation
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Modeled by the rules of the Cross-border
Mergers Directive
European Parliament: change of certain
provisions
Same “before and after” approach
Employee participation less important – SME’s
usually don’t have obligatory rules on employee
representation (exception Denmark, Sweeden)
SUP
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Statistical data: there are around 21 million
SME’s in the EU, approx. 12 million limited
liability companies, and around half of them 5,2
million are single-member private limited
liability companies.
SUP
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Proposal for a Directive of the European
Parliament and of the Council on single-member
private limited liability companies (2014)
SOCIETAS UNIUS PERSONAE (SUP)
Instead of SPE
 To repeal (12th) Company law Directive on singlemember companies
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SUP
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General provisions on single member limited
liability company (same as 12th Company Law
Directive)
SUP specific rules
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Formation:
Ex nihilo or conversion by legal continuity
 Governed by natuional rules for private limited liability
companies
 By natural or legal persons
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SUP
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Articles of association
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Standard template
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Obligatory in the caso of on-line registration
Registration on an SUP
Possibility of registration on line (to be fully
completed electronically)
 Within 3 working days
 Exhaustive list of documents (maximum
requirements for MS)
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SUP
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Single share
Share capital
at least 1 EUR (or national currency)
 Distributions;
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Balance-sheet test
 Solvency statement
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SUP
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Structure
Decisions withoug GM
 Directors
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Responsibility for unlawful distributions (duty of care)
including de facto directors
 De facto directors but no wrongful trading provisions
 Right to give instructions by members to management
body
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Especially important for groups of companies
SUP
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Structural changes
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Conversion including national forms
Case study
Car producing industries join forces in order to survive in a globalizing world. To that
end, lorry producer Plovdiv, a public limited company registered and having
headquarters in Bulgaria, enters into negotiation with truck producer Cel Marul, a
public limited company registered and having headquarters in Rumania, with a view to
accomplishing a cross-border merger. Opinions differ in respect of the question
whether after the merger has been accomplished either of both companies should
remain, or whether the amalgamation of the two companies should result in a ‘new’
company.
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(a) Suppose that the outcome of the negotiations would be as such that pursuant to the
merger Plovdiv limited company would have to be the sole remaining company, what
would you suggest to be an option from EC law point of view? Does, perhaps, more
than one option exist?
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(b) Suppose that the Rumanians fear for a dominant position of Plovdiv plc. What, in
order to create more balance between the two merging companies, would be an
alternative way to merge?
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Source: Dr. S.F.G. Rammeloo December 2009, European Company Law (3) EU Law Business formats EEIG;
SE; (future) SPE
Reading materials
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Obligatory reading
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Dorresteijn/Monteiro/Teichmann/Werlauff “European Corporate Law”
Further reading
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Abraham, M., Pascal, E. »La SE: le regime juridique fixe par les textes communautaires«, PA, 27 mai
2004, no. 106
Aitken, Morgan »Societas Europaea: is tax an incentive or a barrier?”, European Business Review, 6/04
Avagianou, A. „The SE Statute“, ELSA Selected Papers on European Law 2002 (2),
http://www.elsa.org/publications/spel_02_2.html
Bartman, Steef »Editorial: The SPE Revolution«, Volume 5, Issue 6, December 2008.
de Kluiver, H-J., “Editorial: (Re)Considering the SPE”, European Company law, vol. 5, issue 3, June
2008
di Luigi, C. »An invasive top-down harmonisation or a respectful framework model of national laws? A
critique of the SE«, International Company and Commercial Law Review, vol. 19, issue 2, 2008.
Drury, R. »A European Private Company?«, International and Comparative Corporate Law Journal, vol.
3, issue 2, 2001
Drury, R. »The European Private Company«, EBOLR, 9. 2008
Ebke, W. »Die Europäische Aktiengesellschaft ist da - und jetzt?
Die SE muss sich auf dem "Markt der Gesellschaftsrechtsordnungen" durchsetzen“, Europäisches
Wirtschafts- und Steuerrecht, Heft 01/2002
Edwards, V. „The European Company – Essential tool or eviscerated dream?“, Common Market Law
Review, 2003
Reading materials
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Eidenmuller, Engert, Hornuf « The SE as a Vehicle for Legal Arbitrage »,
EBOLR, 2009
Garcia-Riestra “The transfer of seat of the European Company v free
establishment case-law”, European Business Law Review, 6/04
Menjucq « French interpretations and strategies about the European
Company”, European Business Law Review, 6/04
Rose, C. „The New Corporate Vehicle Societas European: consequences
for European corporate governance“, Corporate Governance, Vol. 15,
Number 2, March 2007
Skoie Morkve C. »The SE in Scandinavia«, European Business Law
Review, 2/05
Werlauff « The SE Company”, European Business Law Review 1/03