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European company

forms: EEIG, SE,

Doc dr Tatjana Jevremovi

European company forms

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


European Economic Interest Grouping - Council

Regulation (EEC) No 2137/85 of 25 July 1985 on
the European Economic Interest Grouping (EEIG)

groupement europen d'intrt conomique

Europischen wirtschaftlichen
Interessenvereinigung (EWIV)
Evropsko gospodarsko interesno zdruenje (EGIZ)

Not common in practice: legal firms, some

industrial cooperation (FIAT)


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
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

SE background fighting the

European internal market mobility
European label (Allianz SE)
Removal of national differences (?)

Proposed SE Nordea SE
Nordea AB (Sweden)

Nordea Bank Finland PLc (Finland)

Bank (Sweden) Bank (Norway) Bank (Danmark) Bank (Finland)

Proposed SE Nordea SE
Nordea SE

Branch (Finland)

Branch (Danmark)

Branch (Norway)

SE History of proposals

Prof. Sanders idea for the SE

EC Commission proposals:

Political agreement on Nice Summit of the European
Council, December 2000
2001 Statute for a SE adopted + Directive on employee

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

Form of a European public limited-liability

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

Transfer proposal (obligatory content)

Report done by administrative/management board
Information and protection of shareholders and

Adequate protection before the competent authority

issues the certificate

SE General provisions

Certification of formalities and procedures and

registration of SE
New registration and information of the
previous register (deletion of the old
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

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

SE Formation

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:

(a) is governed by the law of a different Member State,

(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

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.

SE Formation

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.


1. An SE shall be governed:

(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:

(i) the provisions of laws adopted by Member States in

implementation of Community measures relating specifically to
(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

An SE shall comprise:

(a) a general meeting of shareholders and

(b) either a supervisory organ and a management
organ (two-tier 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

Structure irrespective of the national system

adopted, same in the case of transfer of the
companys 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

SE and Corporate

Board structure is closely linked to the corporate governance


Recommendations High Level Group Reports 2002

independence and competence of board members

one tier: distinction between executives and non
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

Only one tier board adopted (UK, Greece)

Both systems allowed (France, Belgium)
Only two tier board adopted (Germany,
Austria, Czech Republic)

Different board structure of the SE

Application of the national law provisions for
public limited liability companies

What (national) provisions would apply ?

Possible but no obligatory additional national

rules on the board structure and its functioning
Employee participation in one tier board

SE Employee

Directive on employee participation

in SE based on before and after
Formation of special negotiating body
Adoption of standard rules by MS,
which can be applied if negotiating
body so decides, plus deadlines for

SE today

SE today

State of Art: 4 Feb 2015 2278 established SE


In Jun 2009 out of 725 companies following

86 shelf companies (for sale)

Usually motivated by circumvention of laws (national

rules on companys structure, employee participation)
and not by economic reasons (cross-border mobility)
Almost half of SEs founded in Czech Republic (among
which 115 shelf and 375 UFO companies) 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)

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

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

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)

Source: Dr. S.F.G. Rammeloo December 2009, European Company Law

(3) EU Law Business formats EEIG; SE; (future) SPE


Idea: Jeanne Bouchourevliev: Pour

une Srl Europenne (1973)
Conference Pour un societe ferme
europenne 1997
Commission public consultation 2007
Commission Proposal 2008
European Parliament procedure by
March 2009

SPE - Background

Compared to SE:
Minimum capital
Creation ab initio
National rules on private companies
SE - european company?
Contractural nature
No cross-border element

SPE Proposal

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

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

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

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

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

SPE Internal

The articles determine the management structure

of the SPE:

Single director or several directors,

One-tier board system or
Two-tier board system
Directors duties and liabilities (much improved than SE)

Secondary application of the national provisions of applicable


GM possible, but not necessary as an independent organ

(obligatory decisions by shareholders through other

R. Drury defines: - management managed SPE

- shareholder managed SPE

SPE Employee

Modeled by the rules of the Crossborder Mergers Directive

European Parliament: change of certain
Same before and after approach
Employee participation less important
SMEs usually dont have obligatory
rules on employee representation
(exception Denmark, Sweeden)


Statistical data: there are around 21

million SMEs in the EU, approx. 12
million limited liability companies,
and around half of them 5,2 million
are single-member private limited
liability companies.


Proposal for a Directive of the

European Parliament and of the
Council on single-member private
limited liability companies (2014)
Instead of SPE
To repeal (12th) Company law Directive
on single-member companies


General provisions on single member

limited liability company (same as
12th Company Law Directive)
SUP specific rules

Ex nihilo or conversion by legal continuity
Governed by natuional rules for private
limited liability companies
By natural or legal persons


Articles of association

Standard template

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)


Single share
Share capital
at least 1 EUR (or national currency)

Balance-sheet test
Solvency statement


Decisions withoug GM

Responsibility for unlawful distributions

(duty of care) including de facto directors
De facto directors but no wrongful trading
Right to give instructions by members to
management body

Especially important for groups of companies


Structural changes

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.

(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?

(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?

Source: Dr. S.F.G. Rammeloo December 2009 , European Company Law (3) EU Law
Business formats EEIG; SE; (future) SPE

Reading materials

Obligatory reading

Dorresteijn/Monteiro/Teichmann/Werlauff European Corporate Law

Further reading

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),
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 Europische Aktiengesellschaft ist da - und jetzt?
Die SE muss sich auf dem "Markt der Gesellschaftsrechtsordnungen" durchsetzen,
Europisches Wirtschafts- und Steuerrecht, Heft 01/2002
Edwards, V. The European Company Essential tool or eviscerated dream?,
Common Market Law Review, 2003

Reading materials

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,
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