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

André Sobczak Audencia MBA1

Legal Environment:An International Comparison

André Sobczak


Company Law in the EU

Seminar 3


Aims

To analyse the basic rules of company law in the EU

To evaluate the harmonisation of company law in the EU


Table

1. Business organisations within the EU1.1. Partnerships1.2. Private Companies1.3. Public Companies

2. Comparative Company Law2.1. Formation and Financing2.2. Management and Control


Table

3. Harmonisation Programme within the EU

3.1. Company Law Directives

3.2. European Economic Interest Grouping

3.3. European Company Statute



1. Buiness Organisations

within the EU


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


Classifications

Partnership based on individual agreements between

the partners (intuitu personae)

Company exist independently of the partners and

depend upon capital resources (intuitu pecuniae)


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



1.1. Partnerships


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


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


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


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


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


Limited Partnerships

general partners

limited partners– limited liability– restricted management rights


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



1.2. Private Companies


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


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



1.3. Public Companies


Public Companies

free transferability of shares usually large number of shareholders legislation about control

– management– minimum capital– minority shareholder protection



2. Comparative Company Law


Company Law

formation and financing management and control


Company Law

Case Study

Wine Online



3. Harmonisation

within the EU


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



3.1. Company Law Directives


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



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



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



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



Third Directive (1978): mergers

scope of application: public companies– mergers by acquisition– mergers by the formation of a new

company



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



Sixth Directive (1982): divisions

divisions or scissions are basically effectuated along the same principles as mergers



Forth Directive (1978): annual accounts

Seventh Directive (1983): consolidated accounts

Eight Directive (1984): audit

harmonisation of financial information published by limited companies



Proposed Fifth Directive: structure of the public company

Proposed Ninth Directive: groups

Proposed Tenth Directive: cross-border mergers

harmonisation approach reached its limits



Eleventh Directive (1989): branches

disclosure requirements with respect to branches of companies



Twelfth Directive (1989): single member company

single member companies must be recognised

Member States may lay down specific provisions

framework directive



Proposed Thirteenth Directive: takeover bids



Conclusion

It is no longer the mere alignment of national laws that is being sought.



3.2. European Economic Interest Grouping


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



3.3. European Company Statute


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



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



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



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

Documents

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