The project of the new european company
| Author | Luminita Tuleasca |
| Position | Lecturer Ph. D, Faculty of Law, Romanian-American University |
| Pages | 1-12 |
1
THE PROJECT OF THE NEW EUROPEAN COMPANY
LUMINIȚ
ȚȚ
ȚA TULEAȘ
ȘȘ
ȘCĂ
∗
∗∗
∗)
Abstract
Designed as a real european company, with a minimum registered capital of EUR 1, largely
accessible, easy to organize and cheap to run, the european private company is to represent a
significant reform in the matte of company law in the European Union.
Without doubt, the adequacy of the european private company statute to the legal traditions of
all member states is an important factor of its use by the foreseen beneficiaries: small and medium
enterprises.
The advanced stage of the political procedures and negotiations related to the statute impose
the analyzing of all the main features of the European Private Company, marked out in official
documents and their comparison to those of the companies regulated in Romania and on other
member states of the European Union, in order to determine the extent such new company shall
represent or nor a new and effective instrument for doing business in the European Union.
Keywords: SPE, transfer of the registered office, capital, cross-border element, single market,
SME
1. Introduction
Without doubt, the differences amongst domestic laws and the diversity in the types of trading
companies represent barriers for the development of the single market so that there is the possibility
to remove, by a type of company regulated by legal uniform rules, adapted to the needs of small and
medium enterprises, the difficulties such entities encounter related to the operation costs, and to
lead to the development of their cross-border activities.
Additionally, the statistics indicate that more than 40% of the SMEs in the European Union
might develop their cross-border activity but claimed that they lack in the needed instrument
1)
as the
existing transnational companies: European Economic Interest Group (EEIG), the European
Company or the European Cooperative Society (SCE)
2)
do not grant a proper type of SMEs
3)
.
In order to create such a company, the European Commission drafted a study for the feasibility
of the European statute of the small and medium enterprises (PME –“Les petites et moyennes
entreprise”).
On the grounds of the Communication of the Commission to the Council and Parliament from
May 21, 2003: “Modernization of trading companies’ law and strengthening of corporative
∗)
Lecturer Ph. D, Faculty of Law, Romanian-American Univ ersity. E-mail: luminita.tuleasca@tuleasca.com.
1)
KPMG survey presented at Business Europe’s SME Acti on Day on 21 November 2007;
2)
See respectively Council Regulation (EEC) 2137/85 of 25 July 1985, Council Regulation (EC) 2157/2001 of 8
October 2001, Council Regulation (EC) 1435/2003 of 22 Jul y 2003;
3)
According to a general EU definition, small and medium sized enterprises are those wit h less than 250
employees. Within this category the following sub-categories are distinguished as per Commission recommendation
2003/361/EC: (i) Medium-sized enterprises [he adcount <250 and tur nover ≤€ 50 million and/or balance sheet total ≤€
43 million]; (ii) Small enterprises [headcount <50 and turnover ≤€ 10 million and/or balance sheet total ≤€ 10 million]
Micro enterprises [headcount <10 a nd turnover ≤€ 2 million and/or balance sheet t otal ≤€ 2 million]; (iii) Micro
enterprises [headcount <10 and turnover ≤€ 2 million and/ or balance sheet total ≤€ 2 million];
2
management in the EU. A plan to advance”
4)
and of the Commission Report for legal businesses of
the Parliament in 29.11.2006
5)
, the European Parliament enacted on February 1, 2007 the
Resolution which included the recommendations of the Commission regarding the statute of the
European private company and the request for the Commission to present, during the year of 2007,
a bill according to the recommendations of the Parliament.
In such background, in June 2008, the European Commission presented in front of the Council
a proposal for a Regulation (hereinafter the Regulation) for the Statute of the European Private
Company (hereinafter the SPE).
The proposal was made on the grounds of art. 352 in the TFUE (article 308 EC Treaty) with the
significance that, in order to pass it, they needed the approval of all the 27 Member States of the
European Union and, the unanimity was difficult to obtain.
As a consequence of the consultation, the European Parliament approved, on March 10, 2009,
the proposal with amendments, adopted a law resolution
6)
and indicated the Commission to alter its
proposal accordingly.
The revised wording of the regulation of the Council regarding the statute of SPE (hereinafter
the Regulation Proposal) it's in final step to be passed, as indicated in the document of the Council
DRS 84 SOC 432 from May 23, 2011
7)
following, shortly after, to conclude a final political
agreement.
In the current configuration, SPE presents the features of a real European entity, the project
(inspired from French simplified shares corporation - SAS) having a coherence different from that
regarded for the European company, meaning that it creates an autonomous statute in relation to the
European domestic law.
We proposed by this paper to analyze the main features of the European Private Company
marked out in official documents, to compare them to those of other European companies but as
well to those of national companies, in order to determine the extent such new company shall
represent or not a new and effective instrument for doing business in the European Union.
2. Features of the European Private Company
As indicated, the premise of SPE regulation consists of the fact that the diversity of limited
liability companies in the member states generate a lack of flexibility and, in case of groups of
companies, it makes difficult the development and optimization of the activities of their branches in
other states of the European Union. The parent company is compelled to establish each branch in
another type in each and every member state where it is established, branches to be object of
different legal regimes.
Additionally, the costs for the initial establishment and development of limited liability
companies are presently significant and regard not only the registered capital and the costs for
consultancy, drafting and authentication or certification of articles of association.
4)
Communication of the Commission to the Council and Parliament from May 21, 2003 entitled: “Modernization
of the law of trading com panies and strengthening of corporative governing in the EU. A plan to go ahead”,
COM(2003)284, celex: 52003DC0284;
5)
Report from November 29, 2006 of the Commission for legal business of the European Parliament, c ontaining as
well regulations to the European Commission related to the statute of the European private company and proposal for
the Resolution of the Eur opean Parliament in such direction [2006/2013 (INI)] rapporteur Klaus-Heiner Lehne, stage of
procedure: A6-0434/2006; This report is based on a regulation draft regarding the statute of EPC jointl y promoted by
MEDEF and CCIP; http://www.europarl.europa.eu/side s/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A6-2006-
0434+0+DOC+PDF+V0//EN&language=EN;
6)
European Parliament legislative resolution of 10 March 2009 on the Proposal for a Council Re gulation on the
Statute for a European Private Company, P6_TA(2009)0094; available at <
sides/getDoc.do;jsessionid=3A6D2E4B375D4F87B4AF504459A78D53.node2?pubRef=-//EP//TEXT+TA+P6-TA-
2009-0094+0+DOC+XML+V0//EN>> (last seen November 12, 2011);
7)
DRS 84 SOC 432 from May 23, 2011, available at:
<< http://register.consilium.europa.eu/pdf/ro/11/st10/st10 611.ro11.pdf>> (last seen on November 11, 2011);
3
According to a study conducted in 2008 by Baker & McKenzie for the German company
association VDMA, these costs taken globally are estimated to average around €1300 for small
companies (21)
8)
.
The total of the above costs on the creation of a company, including capital, can run up to levels
that can deter from company formation in some markets. The Baker & McKenzie study, for
example, estimates that a total of €28,550 would be required in Belgium, €20,500 in the
Netherlands, or € 16,500 in Italy, to set up a small company
9)
.
Seeing that the European private company refers to small and medium enterprises (without
imposing any such restriction, the large companies and the groups may also be beneficiaries of the
Regulation) it is established under the same conditions in any other member state, is simple and
flexible by allowing the associates to decide as many aspects as possible, assuring, in the same time,
a high level of legal certainty for the associates, creditors, employees and third parties, in general.
Based on such realities, the essential aspects of the organic statute of SPE, they desire to
remove the largest part of such current issues from the matter of national and cross-border limited
liability companies.
2.1. Governing Law
Law applicable to SPE represented one of the most difficult issues of the regulation draft.
Article 4 of the regulation proposal establishes the applicable right of SPE, organic statute of
which shall be governed first of all by the provisions of the regulation and, secondly, by the
provisions of the article of association of SPE, creating by it a shield to the application of the
Member States' law
10)
.
The associates, based on the free will principle and on the provisions of art.4 from the
Regulation, can insert as well in the articles of association provisions related to the aspects listed in
Annex I of the Regulation (additionally to the compulsory content of the articles of association
established by art.8 in the Regulation).
The aspects included in Annex I of the regulation proposal are a lost (there are more than 40
positions), and mainly regard the internal organizing of the SPE.
Nevertheless, the Regulation Proposal does not offer the EPC a total autonomy of the legal
regime but, the provisions of the domestic law of the company only applies in case of the aspects
expressly mentioned by the regulation. The national law of the company or the domestic applicable
law is the law of the Member State where the SPE records its registered office.
Third of all, the aspects uncovered (unregulated) or partially covered by the regulation and by
its Annex I, as well as in case of aspects included in Annex I but not contained in the articles of
association, they are object of the laws passed by the member states for applying the regulation
and, in default, the provisions of the law applicable to the company.
The method to nominate the aspects regulated by the domestic law of the company, by
elimination, is criticised in the specialty literature, there are opinions according to which the
application scope of the domestic law shall be determined by the interpretation given in each and
every Member State to the words: "uncovered by" Regulation or by Annex I
11)
.
8)
Based on the presentation by Kristina Schunk, legal consultant at Schunk GMBH &CO. KG, held at the public
hearing before the Legal Affairs Committee ofthe European Parliament in Brussels, 22 June 2006, on the European
Private Company, published in European Company Law, D ecember 2006, vol. 3, issue 6;
9)
Impact assessment, Working Document accompanying the Proposal for a Council Regulation on the Statute for a
European Private C ompany (EPC), {COM (2008) 396}, {SEC (2008)2099}, Brussels SEC(2008)2098; available at:<<
http://ec.europa.eu/internal_market/company/docs/epc/impac t_assesment_en.pdf>>;
10)
Susanne Braun, "Essay-The European Private Company: A Supranational Company Form for Small and
Medium-sized Enterprises?", German Law Journal, V ol. 05 No. 11, 2004, p. 1393 -1408, available at: <<
http://www.germanlawjournal.com/article.php?id=518>>;
11)
H.J. de Klui ver, J. Roest, Expulsion and Wit hdrawal of Shareholdersand M.I.Lennarts, Voice Rights of
Shareholders, both in: D.F.M.M. Zaman et al. (eds.) The European Private Company ( EPC). A Critical Analysis of the
4
It is obvious that, by the legislative technique used by article 4 of the Regulation Proposal it is
avoided as much as possible the application of the domestic law of the company.
2.2. Methods of formation
Unlike all the other current european entities (European company, European groups with
economical interest, European cooperative companies), SPE can be established ex nihilo, by
transformation and merger.
An SPE shall be established ex nihilo (directly) by one or more private or public law natural or
legal persons, according to the provisions of SPE regulation.
The transformation of a current legal person, regulated by the internal law of a member state is
the second establishment method for an SPE, under the conditions, according to the regulation, the
member states are compelled to allow the transformation of a limited liability national company in
an SPE. Regarding the other types of national companies, the member states shall allow their
transformation in an SPE in the extent national law allows their transformation in a limited liability
company, in general.
In this establishment method for the SPE, according to the general rules in the matter, the legal
person / company which is transformed is neither dissolved nor loses its legal personality.
When domestic law imposes a restriction related to the transformation of a legal person in a
limited liability company, such restriction is applied, mutatis mutandis, to the transformation of the
SPE as well.
In case the SPE is established ex nihilo or by transformation, the establishment of the company
shall be regulated by the regulation.
And not least, the SPE can be established by merger, according to domestic law.
On the other hand, as it is known, for encouraging the businesses, all the member states of the
European Union regulated, approx. one hundred years ago, legal entities known as "companies",
which mainly offered its founders the limitation of personal liability. This main feature of
companies: distinct legal personality, with the effect of associates’ liability limitation, explains the
extraordinary use of such legal instruments which give the possibility to develop a business without
risking the full assets of the contractor.
Therefore, SPE is registered on the traditional line of limited liability companies and has legal
personality, with the consequence of the liability of associates for the obligations of the company in
the limit of their contribution to the registered capital, that is, with the exclusion of their personal
liability for the obligations of SPE.
2.3. Articles of Association
In any of the establishment methods allowed by the regulation, SPE is established by the
signature of the articles of association by the founder members, in written form, it being object of
the formal requirements provided for in the applicable domestic law.
By such provision, the regulation proposal first concedes in favour of the member states, giving
the possibility of the applicable domestic law for the establishment of SPE to impose as well other
shape conditions of the articles of association. In this direction, domestic laws include various
provisions, in some cases, being imposed the written form for the validity of the articles of
association, in others for proving the articles of association and as well its authentic form for its
validity.
As for example, the Romanian law
12)
imposes as regulation the written form of the articles of
association, for its validity and, by exception, the authentic form when the limited liability company
is established where a land is brought as contribution to the establishment of the registered capital.
EU Draft Statute, 2009, p. 70 and p. 126, indicated by San dra van den Braak in The European Private Company, its
shareholders and its creditors, in Utrecht law Review, V olume 6, Issue 1 (January), 2010;
12)
Law no. 31 from 1990 regarding trading companies an d the new Romanian Civil Code;
5
The opposability of the articles of association is as well obtained, according to the provisions of
the applicable domestic law.
According to article 8 in the regulation proposal, the articles of association of the SPE must
include at least the following aspects:
a) name of SPE and address of its registered office;
b) activity object or commercial activity of the SPE;
c) tax year of SPE;
d) registered capital of SPE;
e) if applicable, the total number of units, if the units have a nominal value, their nominal
value;
ea) monetary and nonmonetary rights, as well as obligations related to units;
eb) categories of units, if applicable, and number of units in each category;
ec) type of management body, if there is a surveillance board, and their structure;
f) share of the registered capital to be paid upon establishment;
g) names and addresses of the founder members, number of units subscribed by each and
every founder member and, if applicable, of what category such units belong to;
h) the share of each and every cash contribution, if there is one, which is to be paid by each
and every founder member;
i) value and type of each in kind contribution, if there is one, which is to be brought by each
and every founder member;
j) names, addresses and any other information needed for identifying the director or initial
directors and, if applicable, the auditor or initial auditors of the SPE.
The inclusion of additional clauses related to the aspects mentioned in Annex I of the
regulation proposal is to be appreciated by the founder members. In such case, domestic law is not
applied to those aspects in the extent they are included in the articles of association.
The articles of association may include as well other aspects than those compulsory and
elective from the regulation but, such other aspects shall not be regulated by the regulation, but by
the applicable domestic law.
2.4. Registered Capital
The SPE is not object of a requirement of registered capital compulsorily increased, as it may
constitute a barrier for the creation of SPEs. Nevertheless, the creditors are protected by the
excessive distributions to the shareholders, which may affect the capacity of the SPE to pay its
debts. For such purpose, they prohibited the distributions as a consequence of which the liabilities
of SPE are superior to the value of the assets. Additionally, the shareholders may request to the
management executive body of the SPE to sign a certificate of good standing.
There are, amongst the provisions of news and the special importance which may provide the
premises for reaching the objectives of the regulation, those related to the minimum registered
capital of the SPE of at least EUR 1.
The base of the possibility of a EUR 1 registered capital for a private company operating on a
single market is given by the alteration of the conception on the guarantees the creditors of a
company expect and request.
It is well known that, according to its legal significance, the registered capital represents the
general pledge of the company’s creditors. Despite this legal reality, the social obligations
exceeding by far the value of the registered capital so that, de facto, the assets of the company are
those providing or not satisfaction of social creditors
13)
.
13)
Details in: H. Boschma, L. Lennarts, H. Schutte Veenstra, The Reform of Dutch Private Company Law: New
Rules for Protection of Creditors, in European Business Or ganization Law Review no. 8, 2007, p. 573;
6
And not least, it is proven that the creditors prefer to request other types of guarantees,
individual and enforceable, to that offered by the registered capital, the assets being those value of
which grants solidity to the company
14)
.
There is, in the light of the decisions of the Court of Justice of the European Union, the
tendency to waive, for the future, the requirements related to the minimum capital. Therefore,
Germany has recently entered Unternehmergesellschaft with a minimum capital of EUR 1 and The
Netherlands is in full progress of removing the capital related requirements for Besloten
Vennootshap
15)
.
Despite such tendencies, a minimum registered capital of EUR 1 represents a level which
cannot be accepted by the legal traditions of all the member states of the European Union, for which
reason, politically speaking, the opinions are still divergent regarding the capital of the SPE.
Neither the European Parliament agreed this new conception and, in order to make a balanced
compromise, the last version of the regulation includes the possibility of each and every state to be
able to establish for the SPE registered on its territory, a minimum registered capital higher than
EUR 1, but not more than EUR 8000.
The large interval between the two minimum thresholds of the registered capital of the SPE
shows the difference existing between the member states of the European Union. Poland requests a
minimum registered capital of limited liability companies of: EUR 13,869, United Kingdom EUR
1.5, France EUR 1, Hungary, EUR 11,760, Austria EUR 35,000, the Netherlands EUR 18,000,
Bulgaria EUR 2,500
16)
, Romania EUR 45 etc.
We do not believe that the establishment of the minimum capital of SPE by each and every
member state, within the interval established by the regulation: 1 Euro- 8,000 Euro, shall lead to
the success of the SPE, the minimum share of EUR 1 regarded by the initial proposal being that
which, amongst other arguments, may represent an important criterion in choosing this type of
private company.
Additionally, the creditors of the SPE are guaranteed as well by its obligation not to distribute
the dividends of its associates if, on the date of the last tax year end, the net assets resulted from the
annual accounts of the SPE is, or after such a distribution, may decrease below the share of the
capital plus that of the reserves which cannot be distributed according to the articles of association
of the SPE. The member states have the possibility to enter as well the requirements related to the
"certificate of good standing" by which the management body of the SPE certifies that the company
is able to pay its debts on the maturity term, in one year’s term from the dividends distribution date.
And not least, the capital of the SPE is integrally subscribed by the associates who can
contribute by contributions in cash and in kind, and divided in shares. The labour and service
contributions are not allowed.
Regarding the payment of the registered capital, the regulation proposal contains provisions,
by establishing that on formation, at least an amount that is equivalent to the minimum capital
requirement set by the Member State in which the SPE has its registered office shall be paid up at
the time of acquisition of the units. Where the capital of the SPE is higher than the minimum capital
requirement in that Member State, 25% of the amount by which the minimum capital requirement is
exceeded shall also be paid up.
On such grounds, seeing these conditions and the associates’ decision, the articles of
association of the SPE must include the share of the capital which is to be paid upon its
establishment.
14)
Drury, Robert/Hicks, Andrew: The proposal for a European Private Company, The Journal of Business Law,
p.441, 1999, :"But the provisi ons of a minimum capital has not always the e ffect of providing any sort of guarantee that
the business is sufficiently capitalised to protect third parties dealing with it";
15)
Sandra van den Braa k, The European Private Company, its share holders and its creditors, Utrecht law Review,
Volume 6, Issue 1 (January), 2010, available at:<>;
16)
Source: Impact Assessment, Working Document accompanying the Proposal for a Council Regulation on the
Statute for a European Private Company (EPC), op. cit., Annex A 3;
7
2.5. Registered Office
The cross-border mobility of companies is mainly guaranteed by the freedom for establishment.
Despite all this, Article 49 from the TFUE which establishes the freedom of establishment does not
recognize to companies according to Article 54 from the TFUE, the right to move their registered
office from the legal system of the home member state
17)
in another member state so that, the
companies must change for it their nationality and adhere to the legal regime of a new home state.
The case law of the Court of Justice of the European Union is sufficiently clear in this direction and
there is no reason to be altered.
And it because, the company is a legal fiction existence of which is recognized by a domestic
law, law applicable to the connection existing by the registered office of the company – the
registered office
18)
–, between the company and the member state where it is formed, laws of which
are met upon the establishment of the company. Therefore, the application of a domestic law is the
prior condition for the existence of any company.
On the one hand, many Member States do not allow for a company with the registered office
registered according to the articles of association on their territory (the Home State) to have the
headquarters known as real registered office, on the territory of another member state (Host
State)
19)
.
In order to allow to enterprises to take advantage of all the advantages of the internal market,
the SPE must be allowed to establish its registered office and real office in different member states
and to transfer the registered office from one member state to another, without being compelled to
transfer as well its headquarters or main registered office. Despite all this, one must take measures
in the same time in order to prevent the use of the EPC in order to elude the legitimate legal
requirements in the member states.
According to the regulation proposal, the SPE has its registered office and headquarters or the
main place for the development of the activities on the territory of the European Union, according
to the domestic applicable law.
By this provision, the regulation proposal would rather only make half a step on a territory of
"moving sands", establishing as principle the possibility of a company to have its registered office
different from the real office and, additionally, to have its registered office and real office in
different member states. "The step finalization" is launched according to the desires of each and
every member state which can accept or not this possibility by its internal provisions.
Therefore, the applicable domestic law will allow the SPE to decide, by its regulations, if the
registered office and headquarters or main place for the business activities should be or not on the
territory of the same member state.
More, the regulation proposal allows the SPE to transfer its registered office from one member
state to another, under the conditions shown by the regulation, without the dissolution and loss of
the legal personality of the SPE.
The transfer of the registered office of the SPE from one member state to another can only get
involved if dissolution, liquidation or insolvency or SPE payment suspension procedures were
initiated.
The check of the legality to transfer the registered office of the SPE devolves upon the
competent national authority. Should the conditions of the transfer of the registered office be
fulfilled, the competent authority with control of such transfer legality from the home state can only
oppose to the transfer of the registered office due to public order reasons.
17)
The home member state means the member state where there is the registered office of the company right before
the transfer of its registered office in another member state;
18)
The registered office of companies is named " the registered office" as, all the companies a re registered in a
National Register of Companies, held by the member state where it declares its office in the articles of association,
register kept according to the 1
st
Company Law Directive (Directive 68/151/EEC of 9 March 1968);
19)
Report of the Reflection Group On the Future of EU Company Law, European Commissi on, Brussels, April 5,
2011, available at: < > (last seen on
November 14, 2011);
8
The same right is also held by the national authority of financial surveillance of the SPE, if the
SPE is subject to such a check.
The decision of the competent authority on the home state can be brought to court in front of a
judicial authority.
In its turn, the competent authority in the host state shall analyze if all the conditions of the
transfer indicated in the regulation proposal are met as well as all the relevant provisions in its law
and, if affirmatively, it shall decide the registration of the SPE, moment when the transfer produces
its effects.
On the grounds of the notification related to the registration of the SPE in the host state, the
competent authority in the home state decides the erasure of the SPE from its register.
For the opposability of the new registered office registration and of the erasure of the old
registered office, such documents are object to advertising.
2.6. Registration
Seeing the capacity of legal person of the SPE, it must be registered according to the provisions
of the domestic law, in the register kept by each and every home state.
The founder members or any person authorized by them request registration, which can be also
electronically performed.
Article 3 item 3 of the regulation requires as essential element of the registration as European
entity of the SPE, its transnational structure.
The current shape of the regulation proposal alienates from the initial proposal which included
no referral to a cross-border element as they considered that such requirement might significantly
reduce the potential of the SPE. The alteration of conception was determined by the fear that such
lack of community dimension as precondition of its establishment as an SPE may infringe the
principle of subsidiarity regulated by article 5 in the EC Treaty
20)
.
The difficulties created by the cross-border components imposed for the existing European
entities (European company, European group with economical interest, European cooperative
company) are removed by flexible criteria included in the regulation.
The needed cross-border structure must be proved in the moment of the registration of the SPE
by one of the following elements, very easily to fulfil
21)
:
i) an intent to operate in another member stat than that where the SPE is registered; or
ii) an cross-border activity object mentioned in the articles of association of the SPE; or
iii) a branch or subsidiary registered in another member state than that where the SPE is
registered; or
iv) an associate or several associates with residence or registered in more than one member
state or in another member state than that where the SPE is registered.
In order to reduce administrative costs and duties related to the registration of the company, the
formalities to register the SPE are limited to the requirements needed to guarantee the legal
certainty, and the validity and conformity to the provisions of the regulation and to the domestic law
of documents registered in the moment an SPE is created are object of one sole check of legality,
performed according to domestic law.
Therefore, the member states request the supply of only those pieces of information contained
in the Articles of Association of the SPE, the articles of association, the documents certifying the
payment of the capital, the police record of the directors, the proves related to transformations or
mergers of the SPE.
In all cases, irrespective of the method to check the fulfilment of the registration conditions by
an SPE, useless essence checks of documents and information are avoided.
The registration of an SPE is made in the member state where it has its registered office, in the
national register of companies appointed by the domestic law.
20)
Sandra van den Braak, op. cit., p. 4;
21)
A.F.M. Dorresteijn, O.Uzuahu-Santcroos, The Societas Privata Europae a under the Magnifying Glass (Part 2),
in European Company Law, no. 4, 2009, p. 159;
9
Without derogation from the general rules in the matter of companies, the legal personality is
acquired in the moment of registration with the Register of Companies of the SPE constituted ex
nihilo and by transformation and, in the moment of the registration of the merger of the absorbing
company with the register of SPE resulted as a consequence of the merger.
2.7. Organizing
According to the organizing structures of the SPE, the regulation proposal does not produce
conception alterations seeing that, the main decision making body is the general assembly of the
associates decisions of which must be written down; the management of the SPE is provided by
directors which can only be natural persons, the associates having the possibility to decide between
the two traditional management methods: unitary or dualist system and, related to the elaboration,
delivery, auditing and printing of accounts, SPE is object of the requirements of domestic law.
The representation of the SPE in its reports to third parties is included in the general
attributions of the management body of the SPE.
The regulation proposal establishes the main attributions of the general assembly and the
minimum majority related conditions needed by the general assembly to pass decision.
Therefore, as a general rule, except for contrary provisions from the articles of association, the
decisions are passed by the associates with the vote of the simple majority from the total of the
voting rights related to the shares of the SPE. By this provision, the associates have the possibility
to establish majority related conditions much lower than those mentioned by the regulation, for
passing the low importance decisions for the company.
The decisions related to the purchase of its own shares, the increase of the registered capital,
the reduction of the registered capital, the transfer of the registered office of the SPE to another
member state, the dissolution and amendment of the articles of association are made by the
associates with the qualified majority, of at least two thirds of the total of voting rights related to
the shares of the SPE, except for the cases when the articles of association provide no higher
increase.
An important alteration of the tradition conception related to the convocation of general
assembly is marked by the introduction of the principle of non-convocation of the associates’
general assemblies.
Therefore, according to article 28 item 3 in the regulation proposal, passing decisions does not
need the convocation of a general assembly.
Such principle one cannot derogate from by the provisions of the applicable domestic law is
imposed by the need to reduce the costs of the business but as well by the effective use of the time
to pass a decision. Therefore, they remove the conditionings included by all laws of the member
states related to the observance of a certain number of days which should flow from the date the
associates’ general assembly is convoked to the date of its occurrence. The expenses needed for the
convocations are added.
In order for the associates’ general assembly of an SPE to pass decisions, the management body
makes available for all the associations the proposals for decisions, together with sufficient
information in order to grant them the possibility to pass a decision, in full knowledge of the facts.
Decision passing is recorded in writing, as they are object of the formal requirements provided for
by the applicable domestic law. Copies of the decisions and the results of the vote are sent to each
and every associate.
As a natural reflection of the fact that associates’ passing decisions is fully regulated by the
regulation, as principle, the decisions passed by the associates of the SPE must meet the provisions
of the regulation and of the articles of association.
However, the right of the associates to bring to court the illegal decisions of the associates’
general assembly, which infringe the provisions of the regulation and of the articles of association,
is regulated by the applicable domestic law.
Due to the fact that one must allow the shareholders a high level of flexibility and freedom for
organizing the internal business of the SPE, the private character of the company must reflect as
10
well in the fact that its actions can neither be offered to the public or negotiated on the capital
market, nor admitted for transactions or quoted on the regulated markets.
They appreciate that the private character of "closed company" of the SPE can be an instrument
for the limitation of the size of the companies constituted in the SPE, by making the possibility for
experimented partners to get involved in the company more and more difficult
22)
.
The condition to distribute dividends and the reduction of the registered capital, the assignment
of shares are regulated by the regulation and the articles of association while the transformation in a
new legal type, the merger and division, dissolution, liquidation, insolvability, suspension of SPE
payments and other similar procedures are regulated by the domestic applicable law and by the
Regulation (CE) no. 1346/2000 of the Council.
2.8. Employees’ Participation
There are, in the matter of employees’ participation, significant differences, this being another
important aspect where, due to the different legislative traditions of the member states, there must
be a balance compromise.
In the meaning of the regulation, "employees’ participation" means the influence the body
representing the employees and/or the employees’ representatives has on the activity of an SPE by:
i) the right to choose or appoint a part of the members of the board of surveillance or of
directors of the company or
ii) the right to recommend and/or to oppose to the appointment of some or all the members of
the board of directors of the company (art.2 item 2 letter f in the regulation proposal).
As principle, the regulation establishes that the SPE is applied the regulations in the matter of
the employees’ participation, if such case, applicable in the member state where it has its registered
office, except for the aspects regulated by the regulation, offering a uniform solution for any SPE
23)
.
The regulation proposal contains special dispositions to be applied with precedence related to
those of the applicable domestic law, for exceptions, cases when one of the conditions is fulfilled:
i) SPE, for a continuous period of three months from the registration, has at least 500
employees usually working in a member state which provides a degree of employees’ participation
higher than provided for the employees in the member state where the SPE has its registered office;
or ii) In case of transfer of the registered office of an SPE
- at least a third of the employees, but not less than 500, ordinarily working in the home state on
the date it is registered in the host state; and,
- employees in the home state had more participation rights than those in the host state.
Despite all this, if the transnational participation system for the employees created according to
this article is applied to the SPE in the moment of the transfer, is to be applied after the transfer, if
the SPE and the special negotiation body do not decide in another way.
Employees’ participation to the management of the company is a sensitive subject for the
member states where there is no such tradition, states where no private company accepts intrusions
in the development of its businesses which they regard as a private issue and related to which only
the associates are entitled to decide.
The regulation proposal does not impose the obligation of the member states to introduce rules
related to the participation of the employees in the limited liability companies managing to correct
the regulation of employees’ participation in the operation of the SPE, without improperly
disturbing the legal culture of each and every member state
24)
which may discourage the
establishment of SPE.
22)
See Susanne Braun, op. cit., p. 1399;
23)
Daniel Karnak, The Europea n Private Company - Entering the Scene or Lost in Discussion?, i n German Law
Journal vol. 10, No. 08, 2009, p. 1327;
24)
Situatie pe care o intalnim la Societatea Europeana in caz ul careia, reglementarile pri vind participarea
salariatilor la SE se aplica tuturor statelor membr e (see: Dir ective 2001/86/CE of 8 Oct ober 2001 supplementing the
Statute for a European company with regard to the involvemen t of employees);
11
3. Conclusions
Even in its current configuration the SPE related regulation proposal represents a significant
progress to the regulation of the other European companies.
Its correspondence (destined to large enterprises and groups of companies): the European
Company was thought as well as a transnational company which may provide the mobility of
companies by the possibility to transfer the registered office from one member state to another, to
enable the merger and establishment of their branches in other member states etc. such daring
targets did not benefit from the needed political support and the proposal was amended many times
before its enactment. Under such conditions, the statistics indicate that the European company did
not represent a progress and did not enjoy success.
For the future, an important step in the performance of rules of common law for the trading
companies in the European Union shall be made by the European Project Model Company Act
(EMCA), project having as model the American Model Business Corporation Act (MBCA)
25 )
. The
purpose of such project is not to standardize domestic laws in the matter of companies by offering
one single act, but to make available for the member states a model for the domestic laws, model to
be voluntarily used by the member states.
Until the concretization of other European projects in the matter of trading companies, the SPE
presents uncontested advantages to any other European entity: the possibility of direct establishment
- ex nihilo, reduced minimum registered capital, very easy to perform cross-border structure,
possibility to have its registered office in a member state and the real office in another member
state, possibility to transfer the registered office from one member state to another, flexibility of the
articles of association, of internal organizing, failure to impose requirements to the employees’
participation of the SPEs registered in member states which do not regulate employees’
participation etc.
There is to establish the extent in which the largely more extended incidence of the domestic
law applicable to the SPE shall represent an important inconvenient in the use of SPE. There is no
doubt that in its current configuration, SPE regulation proposal does not offer certainty related to
the role of the domestic law applicable to the SPE and, the more the aspects regulated by the
domestic law of the SPE, the less uniform the law applicable to the organic statute of the SPE.
We appreciate as the strongest advantage of the SPE: the deployment of cross-border business
within a single market through the agency of an instrument legal regime of which is sufficiently
uniform, independently from the member state where it develops its activity, directly or by
branches, may determine the success of this new instrument for doing business in the European
Union.
References:
Baums T. & Krüger Andersen P., The European Model Company Law Act Project, European
Corporate Governance Institute, Law Working Paper No. 097/2008, March 2008.
Boschma H., Lennarts L., Schutte-Veenstra H., The Reform of Dutch Private Company Law:
New Rules for Protection of Creditors, European Business Organization Law Review 8, 2007;
Braak, Sandra van den, The European Private Company, its shareholders and its creditors,
Utrecht law Review, Volume 6, Issue 1 (January), 2010;
Braun, Susanne, Essay-The European Private Company: A Supranational Company Form for
Small and Medium-sized Enterprises?, German Law Journal, Vol. 5 No. 11, 2004;
Dorresteijn A.F.M., Uzuahu-Santcroos O., The Societas Privata Europaea under the
Magnifying Glass (Part 2), European Company Law, no. 4, 2009;
25)
On the E MCA project, see: T. Baums & P. Krüger Andersen, The European Model Company Law Act Project,
European Corporate Governance Institute, Law Working Paper No. 097/2008, March 2008. See als o the EM CA
website: www.asb.dk/emca;
12
Drury, Robert/Hicks, Andrew, The proposal for a European Private Company, The Journal of
Business Law, p.441, 1999,
Karnak, Daniel, The European Private Company - Entering the Scene or Lost in Discussion?,
German Law Journal vol. 10, No. 08, 2009;
Kluiver, H.J. de; Roest, J., Expulsion and Withdrawal of Shareholders and M.I.Lennarts, Voice
Rights of Shareholders, both in: D.F.M.M. Zaman et al. (eds.) The European Private Company
(EPC). A Critical Analysis of the EU Draft Statute, 2009,
www.asb.dk/emca;
http://register.consilium.europa.eu/pdf/ro/11/st10/st10611.ro11.pdf
http://ec.europa.eu/internal_market/company/docs/epc/impact_assesment_en.pdf
http://ec.europa.eu/internal_market/company/modern/index_en.htm#background
http://www.germanlawjournal.com/article.php?id=518
http://utrechtlawreview.org
