André Sobczak Audencia MBA 1 Legal Environment: An International Comparison André Sobczak

André Sobczak Audencia MBA 2 Company Law in the EU Seminar 3

André Sobczak Audencia MBA 3 Aims To analyse the basic rules of company law in the EU To evaluate the harmonisation of company law in the EU

André Sobczak Audencia MBA 4 Table 1. Business organisations within the EU 1.1. Partnerships 1.2. Private Companies 1.3. Public Companies 2. Comparative Company Law 2.1. Formation and Financing 2.2. Management and Control

André Sobczak Audencia MBA 5 Table 3. Harmonisation Programme within the EU 3.1. Company Law Directives 3.2. European Economic Interest Grouping 3.3. European Company Statute

André Sobczak Audencia MBA 6 Company Law in the EU 1. Buiness Organisations within the EU

André Sobczak Audencia MBA 7 Definitions Company  association of persons who combine together for the purpose of a joint activity, commercial or otherwise Company law  norms relating to the legal structure of business organisations

André Sobczak Audencia MBA 8 Classifications Partnership  based on individual agreements between the partners (intuitu personae) Company  exist independently of the partners and depend upon capital resources (intuitu pecuniae)

André Sobczak Audencia MBA 9 Classifications civil law or commercial law  continental systems draw a clear distinction: competent judge, rules of proof  distinction unknown in the UK legal personality  business is owned by a distinct legal person  link with liability of the members

André Sobczak Audencia MBA 10 Company Law in the EU 1.1.Partnerships

André Sobczak Audencia MBA 11 Partnerships partnerships do not confer on their members the privilege of limited liability for that reason alone, they are not a popular medium for ordinary commercial transactions fiscal transparency

André Sobczak Audencia MBA 12 Civil Partnerships In France, Germany and Belgium, civil partnerships have no legal personality Example : société en participation – subject to general rules on contract – no assets distinct from those of its partners – partners contract with third parties in their own name

André Sobczak Audencia MBA 13 UK Partnerships modified legal personality each partner is an agent of his partners in respect of any transaction carried out in the ordinary course of the partnership assets are co-owned by the partners partners are fully liable for all the debts of the partnership

André Sobczak Audencia MBA 14 General Partnerships modified legal personality, except for Germany and the Netherlands assets are owned by the partnership partners are fully liable for all the debts of the partnership

André Sobczak Audencia MBA 15 General Partnerships Example: société en nom collectif – registration – members are traders and individually liable for the debts – managers can only bind the partnership with regards to transactions falling within the objective of the partnership

André Sobczak Audencia MBA 16 Limited Partnerships general partners limited partners – limited liability – restricted management rights

André Sobczak Audencia MBA 17 Limited Partnerships Example: société en commandite simple – limited partners liability limited to their contribution need not to be traders cannot enter into transactions with third parties – at least one general partner

André Sobczak Audencia MBA 18 Company Law in the EU 1.2.Private Companies

André Sobczak Audencia MBA 19 Private Companies Example: société à responsabilité limitée – 1 to 50 members – minimum capital: 7500 € – transfer of shares consent of ¾ of the shareholders if no consent, shares must be acquired by the other shareholders

André Sobczak Audencia MBA 20 Private Companies Example: UK limited company by shares – 1 or more members – no minimum capital – many constitutions provide for restrictions on the transfer of shares

André Sobczak Audencia MBA 21 Company Law in the EU 1.3.Public Companies

André Sobczak Audencia MBA 22 Public Companies free transferability of shares usually large number of shareholders legislation about control – management – minimum capital – minority shareholder protection

André Sobczak Audencia MBA 23 Company Law in the EU 2.Comparative Company Law

André Sobczak Audencia MBA 24 Company Law formation and financing management and control

André Sobczak Audencia MBA 25 Company Law Case Study Wine Online

André Sobczak Audencia MBA 26 Company Law in the EU 3. Harmonisation within the EU

André Sobczak Audencia MBA 27 Right of Establishment companies are mutually recognised in all Member States companies of one Member State which establish themselves in another Member State cannot be required to comply with formalities other than those laid down for domestic companies

André Sobczak Audencia MBA 28 Company Law in the EU 3.1.Company Law Directives

André Sobczak Audencia MBA 29 Company Law Directives First Directive (1968): disclosure scope of application: private and public companies disclosure of basic documents – company – persons authorised to bind the company

André Sobczak Audencia MBA 30 Company Law Directives First Directive (1968): disclosure restriction of the grounds on which obligations in the name of the company are not valid limitation of cases in which nullity of a company can arise

André Sobczak Audencia MBA 31 Company Law Directives Second Directive (1976): capital scope of application: public companies information must be available to enable any interested person to acquaint himself with the composition of the capital of the company minimum capital must be subscribed

André Sobczak Audencia MBA 32 Company Law Directives Second Directive (1976): capital maintenance of the capital – prohibiting any reduction by distribution to the shareholders – imposing limits on the company’s right to acquire its own shares

André Sobczak Audencia MBA 33 Company Law Directives Third Directive (1978): mergers scope of application: public companies – mergers by acquisition – mergers by the formation of a new company

André Sobczak Audencia MBA 34 Company Law Directives Third Directive (1978): mergers Stage 1: drawing-up of draft terms of merger  Minimum content  publication Stage 2: discussion within each company  vote of the general meeting Stage 3: actual merger

André Sobczak Audencia MBA 35 Company Law Directives Sixth Directive (1982): divisions divisions or scissions are basically effectuated along the same principles as mergers

André Sobczak Audencia MBA 36 Company Law Directives Forth Directive (1978): annual accounts Seventh Directive (1983): consolidated accounts Eight Directive (1984): audit harmonisation of financial information published by limited companies

André Sobczak Audencia MBA 37 Company Law Directives Proposed Fifth Directive: structure of the public company Proposed Ninth Directive: groups Proposed Tenth Directive: cross-border mergers harmonisation approach reached its limits

André Sobczak Audencia MBA 38 Company Law Directives Eleventh Directive (1989): branches disclosure requirements with respect to branches of companies

André Sobczak Audencia MBA 39 Company Law Directives Twelfth Directive (1989): single member company single member companies must be recognised Member States may lay down specific provisions framework directive

André Sobczak Audencia MBA 40 Company Law Directives Proposed Thirteenth Directive: takeover bids

André Sobczak Audencia MBA 41 Company Law Directives Conclusion It is no longer the mere alignment of national laws that is being sought.

André Sobczak Audencia MBA 42 Company Law in the EU 3.2.European Economic Interest Grouping

André Sobczak Audencia MBA 43 EEIG registered contract purpose: facilitate or develop the economic activity of the members no minimum capital unlimited joint liability of the members profits and losses taxable in the hands of the members

André Sobczak Audencia MBA 44 Company Law in the EU 3.3.European Company Statute

André Sobczak Audencia MBA 45 European Company Statute 2 pieces of legislation – Regulation establishing the company law – Directive on workers involvement advantages – Single set of rules – Unified management and reporting system – Reduction of administrative & legal costs

André Sobczak Audencia MBA 46 European Company Statute 4 ways of setting up a SE – merger of 2 or more existing public limited companies from at least 2 Member States – formation of a holding company by public or private limited companies from at least 2 Member States

André Sobczak Audencia MBA 47 European Company Statute 4 ways of setting up a SE – formation of a subsidiary of companies from at least 2 Member States – transformation of a public limited company which has, for at least 2 years, had a subsidiary in another Member State

André Sobczak Audencia MBA 48 European Company Statute SE must be registered in the Member State where it has its administrative head office provisions for worker involvement – compulsory negotiations on the involvement of workers – standard principles if no agreement