LEGAL FRAMEWORK OF COMPANY LAW IN THE EUROPEAN UNION

1. FIRST COUNCIL DIRECTIVE of 9 March 1968 on co-ordination of safeguards

which, for the protection of the interests of members and others, are required by Member
States of companies within the meaning of the second paragraph of Article 58 of the Treaty,
with a view to making such safeguards equivalent throughout the Community

According to its provisions, the co-ordination measures prescribed by the Directive shall
apply to the laws, regulations and administrative provisions of the Member States relating to the
following types of companies:

— In Germany: die Aktiengesellschaft, die Kommanditgesellschaft auf Aktien, die

Gesellschaft mit beschränkter Haftung;

— In Belgium: de naamloze vennootschap, la société anonyme, la societe en commandite

par actions, de commanditaire vennootschap op aandelen de personenvennootschap met beperkte
aansprakelijkheid; la société de personnes à responsabilité limitée ;

— In France: la société anonyme, la société en commandite par actions, la société à

responsabilité limitée ;

— In Italy: società per azioni, società in accomandita per azioni, società a responsabilità
limitata;

— In Luxembourg: la société anonyme, la société en commandite par actions, la société à

responsabilité limitée ;

— In the Netherlands: de naamloze vennootschap, de commanditaire vennootschap op

aandelen.

The Directive states that Member States shall take the measures required to ensure
compulsory disclosure by companies of at least the following documents and particulars: (a) The
instrument of constitution, and the statutes if they are contained in a separate instrument; (b) Any
amendments to the instruments mentioned in (a), including any extension of the duration of the
company ; (c) After every amendment of the instrument of constitution or of the statutes, the
complete text of the instrument or statutes as amended to date; (d) The appointment, termination
of office and particulars of the persons who either as a body constituted pursuant to law or as
members of any such body: (i) are authorized to represent the company in dealings with third
parties and in legal proceedings; (ii) take part in the administration, supervision or control of the
company. It must appear from the disclosure whether the persons authorized to represent the
company may do so alone or must act jointly; (e) At least once a year, the amount of the capital
subscribed, where the instrument of constitution or the statutes mention an authorized capital,
unless any increase in the capital subscribed necessitates an amendment of the statutes; (f) The
balance sheet and the profit and loss account for each financial year. The document containing
the balance sheet shall give particulars of the persons who are required by law to certify it.
However, in respect of the Gesellschaft mit beschrankter Haftung, societe de personnes a
responsabilite limitee, personenvennootschap met beperkte aansprakelijkheid, societe a.
responsabilite limitee and societa a responsabilita limitata under German, Belgian, French,
Italian or Luxembourg law, referred to in Article 1 , and the besloten naamloze vennootschap
under Netherlands law, the compulsory application of this provision shall be postponed until the
date of implementation of a Directive concerning co-ordination of the contents of balance sheets
and of profit and loss accounts and concerning exemption of such of those companies whose
balance sheet ,total is less than specified in the Directive from the obligation to make disclosure,
in full or in part, of the said documents. The Council will adopt such a Directive within two years
following the adoption of the present Directive; (g) Any transfer of the seat of the company; (h)
The winding up of the company ; (i) Any declaration of nullity of the company by the courts; (j )
The appointment of liquidators, particulars concerning them, and their respective powers, unless
such powers are expressly and exclusively derived from law or from the statutes of the company;
(k) The termination of the liquidation and, in Member States where striking off the register
entails legal consequences, the fact of any such striking off.

2. Second Council Directive 77/91/EEC of 13 December 1976 on coordination of

safeguards which, for the protection of the interests of members and others, are required
by Member States of companies within the meaning of the second paragraph of Article 58
of the Treaty, in respect of the formation of public limited liability companies and the
maintenance and alteration of their capital, with a view to making such safeguards
equivalent

According to its provisions, the Directive states that, for a set of companies, the following
information at least must appear in either the statutes or the instrument of incorporation or a
separate document published in accordance with the procedure laid down in the laws of each
Member State in accordance with Article 3 of Directive 68/151/EEC: (a) the registered office; (b)
the nominal value of the shares subscribed and, at least once a year, the number thereof; (c) the
number of shares subscribed without stating the nominal value, where such shares may be issued
under national law; (d) the special conditions if any limiting the transfer of shares; (e) where
there are several classes of shares, the information under (b), (c) and (d) for each class and the
rights attaching to the shares of each class; (f) whether the shares are registered or bearer, where
national law provides for both types, and any provisions relating to the conversion of such shares
unless the procedure is laid down by law; (g) the amount of the subscribed capital paid up at the
time the company is incorporated or is authorized to commence business; (h) the nominal value
of the shares or, where there is not nominal value, the number of shares issued for a
consideration other than in cash, together with the nature of the consideration and the name of
the person providing this consideration; (i) the identity of the natural or legal persons or
companies or firms by whom or in whose name the statutes or the instrument of incorporation, or
where the company was not formed at the same time, the drafts of these documents, have been
signed; (j) the total amount, or at least an estimate, of all the costs payable by the company or
chargeable to it by reason of its formation and, where appropriate, before the company is
authorized to commence business; (k) any special advantage granted, at the time the company is
formed or up to the time it receives authorization to commence business, to anyone who has
taken part in the formation of the company or in transactions leading to the grant of such
authorization.

3. Fourth Council Directive 78/660/EEC of 25 July 1978 based on Article 54 (3) (g)
of the Treaty on the annual accounts of certain types of companies

The Directive establishes some general provisions regarding the annual accounts of the
companies indicated:

a) The annual accounts shall comprise the balance sheet, the profit and loss account and
the notes on the accounts. These documents shall constitute a composite whole.

b) They shall be drawn up clearly and in accordance with the provisions of this Directive.

c) The annual accounts shall give a true and fair view of the company's assets, liabilities,
financial position and profit or loss.

d) Where the application of the provisions of this Directive would not be sufficient to
give a true and fair view within the meaning of paragraph 3, additional information must be
given.

e) Where in exceptional cases the application of a provision of this Directive is

incompatible with the obligation laid down in paragraph 3, that provision must be departed from
in order to give a true and fair view within the meaning of paragraph 3. Any such departure must
be disclosed in the notes on the accounts together with an explanation of the reasons for it and a
statement of its effect on the assets, liabilities, financial position and profit or loss. The Member
States may define the exceptional cases in question and lay down the relevant special rules.

f) The Member States may authorize or require the disclosure in the annual accounts of
other information as well as that which must be disclosed in accordance with this Directive.
 4. Twelfth Council Company Law Directive 89/667/EEC of 21 December 1989 on
single-member private limited-liability companies

The Directive concerns a general legal framework inside the European Union in regard to
the single-member private limited liability companies.

A company may have a sole member when it is formed and also when all its shares come
to be held by a single person (single-member company).

Member States may, pending coordination of national laws relating to groups, lay down
special provisions or sanctions for cases where: (a) a natural person is the sole member of several
companies; (b) a single-member company or any other legal person is the sole member of a
company.

Where a company becomes a single-member company because all its shares come to be
held by a single person, that fact, together with the identity of the sole member, must either be
recorded in the file or entered in the register within the meaning of Article 3 (1) and (2) of
Directive 68/151/EEC or be entered in a register kept by the company and accessible to the
public.

The sole member shall exercise the powers of the general meeting of the company.
Decisions taken by the sole member in the field referred to in paragraph 1 shall be recorded in
minutes or drawn up in writing.

Contracts between the sole member and his company as represented by him shall be
recorded in minutes or drawn up in writing. Member States need not apply paragraph 1 to current
operations concluded under normal conditions.

A Member State need not allow the formation of single-member companies where its
legislation provides that an individual entrepreneur may set up an undertaking the liability of
which is limited to a sum devoted to a stated activity, on condition that safeguards are laid down
for such undertakings which are equivalent to those imposed by this Directive or by any other
Community provisions applicable to the companies referred to in Article 1.

5. Directive 2007/36/EC of the European Parliament and of the Council of 11 July

2007 on the exercise of certain rights of shareholders in listed companies

The Directive established certain minimum rights for shareholders in listed companies:

- The company shall ensure equal treatment for all shareholders who are in the same
position with regard to participation and the exercise of voting rights in the general meeting;

- Obligations for the company to inform the shareholders prior to the general meetings;
 - Shareholders, acting individually or collectively: (a) have the right to put items on the
agenda of the general meeting, provided that each such item is accompanied by a justification or
a draft resolution to be adopted in the general meeting; and (b) have the right to table draft
resolutions for items included or to be included on the agenda of a general meeting;

- Every shareholder shall have the right to ask questions related to items on the agenda of
the general meeting. The company shall answer the questions put to it by shareholders;

- Rights of a shareholder to participate in a general meeting and to vote in respect of any

of his shares cannot be subject to any requirement that his shares be deposited with, or
transferred to, or registered in the name of, another natural or legal person before the general
meeting;

- Rights of a shareholder to sell or otherwise transfer his shares during the period between
the record date and the general meeting to which it applies cannot be subject to any restriction to
which they are not subject at other times;

- Companies must offer their shareholders the possibility to vote by correspondence in

advance of the general meeting. Voting by correspondence may be made subject only to such
requirements and constraints as are necessary to ensure the identification of shareholders and
only to the extent that they are proportionate to achieving that objective.

6. Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a

European company (SE)

The regulation provides that a company may be set up within the territory of the
Community in the form of a European public limited-liability company (Societas Europaea or
SE) on the conditions and in the manner laid down in this Regulation.

The capital of an SE shall be divided into shares. No shareholder shall be liable for more
than the amount he has subscribed. An SE shall have legal personality. Employee involvement in
an SE shall be governed by the provisions of Directive 2001/86/EC.

Also, public limited-liability companies such as referred to in the Regulation, formed

under the law of a Member State, with registered offices and head offices within the Community
may form an SE by means of a merger provided that at least two of them are governed by the
law of different Member States. Other public and private limited-liability companies, formed
under the law of a Member State, with registered offices and head offices within the Community
may promote the formation of a holding SE 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.