EU company law
Formation, capital & disclosure requirements
The following EU company law directives lay down
- general rules on setting up limited liability companies
- capital and disclosure requirements.
- Directive 2009/101/EC covers the disclosure of company documents, the validity of obligations entered into by a company, and nullity. It applies to all public and private limited liability companies.It replaces Directive 68/151/EEC (the 1st Company Law Directive). The current consolidated version includes amendments introduced by Directive 2003/58/EC (now repealed) and Directive 2012/17/EU.
- Directive 2012/30/EU covers the formation of public limited liability companies and rules on maintaining and altering their capital. It sets the minimum capital requirement for EU public limited liability companies at EUR 25 000.It replaces Directive 77/91/EEC (the 2nd Company Law Directive). The consolidated version includes amendments introduced by Directive 2006/68/EC and Directive 2009/109/EC.
- Directive 89/666/EEC (the 11th Company Law Directive) introduces disclosure requirements for foreign branches of companies. It covers EU companies which set up branches in another EU country or companies from non-EU countries setting up branches in the EU.
- Directive 2009/102/EC (the 12th Company Law Directive) provides a framework for setting up a single-member company (in which all shares are held by a single shareholder). It covers private limited liability companies, but EU countries may decide to extend it to public limited liability companies. It replaces Directive 89/667/EEC.
The rules on formation, capital and disclosure requirements are complemented by accounting and financial reporting rules.
Listed companies must also meet certain transparency requirements.
Domestic mergers & divisions
- Directive 2011/35/EU deals with mergers between public limited liability companies in a single EU country. It covers protection for shareholders, creditors and employees.It replaces Directive 78/855/EEC (former 3rd Company Law Directive).
- Directive 82/891/EEC (the 6th Company Law Directive) deals with the division of public limited liability companies in a single EU country. It covers protection for shareholders, creditors and employees.
Business operations involving more than one country
- Directive 89/666/EEC(the 11th Company Law Directive) introduces disclosure requirements for foreign branches of companies. It covers EU firms setting up branches in another EU country and non-EU firms setting up branches in the EU. It was amended by Directive 2012/17/EU.
Directive 2005/56/EC(the 10th Company Law Directive) sets out rules to facilitate mergers of limited liability companies involving more than one country (cross-border mergers). Undertakings for collective investments in transferable securities (UCITS) are not covered.
In October 2013 the Commission published a study by Bech-Bruun and Lexidale on application of the Cross-Border Mergers Directive. The summary of the consultation on cross-border mergers and divisions was published in October 2015.
Directive 2012/17/EUdeals with the interconnection of central, commercial and companies registers (business registers). It amended 3 company law directives - 89/666/EEC, 2005/56/EC and 2009/101/EC.
In addition, the Commission implementing regulation (EU) 2015/884 sets out technical specifications and procedures required for the system of interconnection of business registers.
Transfer of limited liability companies' registered offices
The Commission has been assessing the need for a 14th Company Law Directive on transferring companies' registered offices to a different EU country. The most recent consultation was held in early 2013.
EU legal entities
In April 2014 the European Commission presented:
- a proposal for a Directive on single-member private limited liability companies (FAQ,Impact Assessment Executive summary,Impact Assessment, Citizens' summary ) to facilitate the creation of companies with a single shareholder across the EU
Rules on European legal entities apply throughout the EU. They co-exist with national ones. Legislation includes the following:
- Regulation 2157/2001 sets out a statute for a European Company (SocietasEuropea or SE). See also Directive 2001/86/EC on the involvement of employees.
Consult also a dedicated website on the European Company.
- Regulation 1435/2003 sets out a statute for a European Cooperative Society (SCE). See also
- Regulation 2137/85 sets out a statute for European Economic Interest Groupings (EEIGs).
The Commission has put forward 2 other proposals for European legal bodies:
Proposal for a Council Regulation on the Statute for a European Foundation (Fundatio Europaea or FE).
In early 2012 the Commission presented a proposal for a Statute for a European Foundation, designed to make it easier for such organisations to work for the public good anywhere in the EU. This was followed by a European Parliament resolution in mid-2013.
- Proposal for a European Private Company Statute (Societas Privata Europaea or SPE)
In 2008 the Commission presented a draft European Private Company statute. The aim was to enable smaller businesses to operate EU-wide, cutting costs and encouraging growth in this area.
It was later decided to withdraw this proposal during the 2013 Regulatory Fitness and Performance (REFIT) programme: Results and next steps” (COM(2013)685 ). The formal withdrawal was published in the Official Journal of the EU on 21 May 2014.