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The European Company
(Societas Europeae, with initials SE, common for all the
member-states) after a long course that begun almost 30 years ago,
will soon come true. Already there has been a decisive step and the
talks turn towards the search of a flexible form that will take into
consideration the essence and the differences between the various
national systems.
If we go back, in
1970 the European Commission submitted a proposal in the form of a
Regulation about the statute of a European Company. But because of
the differences between the company law each country has, there have
been oppositions that lasted long and had as a result that the
Commission submitted a completely new relevant proposal in 1989.
The 1989 proposal for
the European Company was divided into two parts:
- The Regulation
for the operation of the European Company,
which
means the statute plan (the final text contains the general
regulations that govern a European Company, the ways of founding
it and structuring it, the way of forming the annual and unified
balance sheet and profit and loss account, regulations about
liquidation, insolvency and suspension of payments and other
supplemental and transitional regulations).
- The Directive
for the role of employees
(the final text contains general regulations that govern the role
of employees, regulations about the procedure of negotiations and
other relative regulations).
This division into
two different texts has been kept up until today.
In the beginning of
December 2000, the summit held in Nice expressed its satisfaction
for the deal accomplished regarding the social aspect of the
European Company, that is the role of the employees in it. After
Nice the text of the Regulation has been modified considerably and
it allows companies of different Member States to realize for the
first time transnational mergers.
Both the Regulation
and the Directive will be voted after been amended in the future.
The following paragraphs refer to the actual proposals for the
Regulation and the Directive (November 2001).
The creation of the
European Company, which will have its own legal framework, will
allow companies that have been formed in different Member States to
merge, to form a holding company or common subsidiary as well as a
public company which operates under national law and keeps
subsidiaries in other Member States, to be converted into an SE
avoiding the existing legal and practical obstacles. Plus, public
companies as well as limited liability companies that have a
presence in the European Union, either registered in more than one
Member States or subsidiaries or branches in other countries than
that of their head offices, can create a European Holding Company.
The establishment of a European Company under the form of a
subsidiary can be effectuated by any legal person according to the
same criteria. For all the pre-said cases, there is a common
prerequisite, that the European Company must cover at least two
Member States.
The European Company
statute previews two alternative systems for its management.
The two-tier
system (like the German one) previews one
management organ and one supervisory organ. The
supervisory organ controls the management organ as far as the way it
runs the company is concerned. In the supervisory organ participate
representatives of the shareholders as well as representatives of
the employees.
Vice-versa, the single-tier
system (like the Anglo-Saxon one) previews just
one administrative organ, which is up to management as well as
administration. The administrative organ is elected
naturally by the shareholders. It
is up to the companies to choose between these two systems.
The capital of the
European Company is divided into shares and each shareholder is
liable up to the amount he/she has subscribed. The subscribed
capital of a European Company is expressed in Euro.
The country where a
company is registered is stated by the company statute and must
correspond to the place where its head office is located. A European
Company can change the country where it is registered according to
the foreseen procedures. This relocation requires neither the
liquidation of the existing nor the creation of a new legal person.
But a plan of relocation must be established and published.
Special provisions
have been previewed for the protection of shareholders, creditors,
possessors of bonds and other debentures in case of merger, change
of legal form from SE to SA, liquidation, insolvency and cessation
of payments.
Each European Company
is registered in the Member State in a special register that is
designated by the legislation of that member state for public
companies. Registration and resolution of a European Company are
published in the formal journal of the EU to inform each person or
part that may be concerned.
The European Company
regarding the sorting out of its annual or unified balance sheet and
profit and loss account follows the rules that stand for the public
companies, which are stated in the law of the Member State where the
SE is registered.
The Directive for the
role of the employees will be put into power together with the
Regulation. After Nice, the Directive
previews that every plan for the foundation of a European Company
must be accompanied by negotiations with the representatives of
employees, for their participation in it to be determined and
organized.
For this goal a
special negotiating team is formed that represents the employees in
the negotiations. The special negotiating
team is put together with similar, but not identical procedures as
in the case of European Works Councils. No European
Company can be formed from the general meeting of the shareholders
if the type of the employee involvement has not yet been resolved,
as stated in the Directive.
The Directive is
complex enough and it allows, under specific preconditions, the
transfer in each Member State, of all the national rules for
employee participation. This fact will in all probability have as a
result that it will not exist a single model of European Company but
that it will differentiate from country to country or even from
company to company.
Where no agreement
has been concluded, in addition to information and consultation,
arrangement must also be made for employee participation in the SE
as follows:
- In the case of holding companies
and joint ventures, where the majority of the employees in the
participating companies were entitled to participate in their
company;
- In case of conversions, the
participation arrangements in the company prior to conversion
shall continue to apply;
- In the case of mergers, where 25%
of the employees were entitled to participate (although, in the
case of companies formed by merger, the Member States have the
choice of whether to apply or not the participation rules,
subject to the right to register the SE);
- In the case of SE registration,
all European Companies will have to have their registered
offices and their actual head office in the same Member State.
No SE may be registered without meeting the requirements of the
Directive, except in the case of mergers where there were no
participation arrangements prior to the merger.
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