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					                                                                                      ANSWERS
                                                                                                 June 2012




                                   European Commission’s
                     Consultation on the future of European Company Law



Executive summary

EUROCHAMBRES supports further development of European Company Law and believes that there
are areas which could be harmonized, especially with regard to cross-border activities of companies.

At the same time EUROCHAMBRES reiterates its support for the creation of a new EU company legal
form – the European Private Company. EUROCHAMBRES strongly believes that the European
Private Company would allow companies, and in particular SMEs, to adopt a simple and flexible
statute that would facilitate their expansion within the Internal Market. Therefore EUROCHAMBRES
calls upon the Commission to reinitiate the debate on the Statute for a European Private Company,
possibly with a new proposal, and look for alternative ways to get this political project approved by
Member States.


Answers to selected questions from the consultation

II OBJECTIVES OF EUROPEAN COMPANY LAW

Question 5
What should be the objective(s) of EU company law?

EUROCHAMBRES believes that the objectives of EU company law should be the following:
  • Improve the environment in which European companies operate, and their mobility in the EU.
  • Facilitate the creation of companies in Europe.
  • Setting the right framework for regulatory competition allowing for a high level of flexibility and
     choice.
  • Better protect creditors, shareholders and members.

III SCOPE OF EUROPEAN COMPANY LAW

Question 6
Would you support that the EU's priority should be to improve the existing harmonised legal
framework or, rather, to explore new areas for harmonisation?

In the opinion of EUROCHAMBRES, both approaches could be combined.

With regard to exploring new areas for further harmonization, EU’s work should concentrate on:
   • cross-border transfer of registered office,
   • cross-border divisions, and
   • cross-border conversion.

The establishment and operation of EU companies should be simplified and its cost should be
reduced, e.g. by making it possible to found a company via Internet or by elimination of unnecessary
formal requirements such as the involvement of a notary.



 EUROCHAMBRES’ Comments – Future of European Company Law                                     1
                                                                                     ANSWERS
                                                                                               June 2012




V EU COMPANY LEGAL FORMS

Question 9
What, if any, is the added value that EU company legal forms bring for European business?

EUROCHAMBRES sees potential in the EU company legal forms, but it should be noted that in many
Member States these legal forms were hardly adopted. It appears that it is not only the company legal
form that matters, but the whole legal framework of a given Member State should be considered.

EUROCHAMBRES considers the following factors as potential added value of the EU company legal
forms:
    • The European image of those company law forms.
    • Savings in costs of cross-border transactions.
    • The possibility not to be subject to compulsory national requirements (for example, the SE
       allow public limited-liability companies to choose between one-tier and two-tier management
       structure).
    • Other factors, such as: the possibility to use one legal form in several Member States;
       reduction of costs of establishment and consultations; efficient control of subsidiaries in
       different Member States; the use of the same corporate governance rules for all the
       subsidiaries.

Question 10
What, if any, are the main shortcomings of EU legislation introducing EU company legal
forms?

EUROCHAMBRES sees the following as the main shortcomings of EU legislation on EU company
legal forms:
    • The complexity linked to frequent cross-references to relevant national legislation.
    • The uncertainty linked to the application of different national legislations that are applied
        simultaneously.
    • The differences in the way EU company law forms are understood and used at national level.
    • Other factors, such as: EU company legal forms still involve too many administrative burdens;
        a European Private Company for SMEs is needed.

Question 11
Should existing EU company legal forms be reviewed?

EUROCHAMBRES supports the revision of the existing EU company legal forms, especially with
regard to:
   • Simplification and rationalisation of existing procedures.
   • Increased uniformity through reduction of cross-references to national legislation.
   • Possibility to have the registered office and the headquarters in two Member States.
   • Other issues: extension of establishment requirements; legal forms which can be merged in
       order to establish a new company.




 EUROCHAMBRES’ Comments – Future of European Company Law                                   2
                                                                                        ANSWERS
                                                                                                  June 2012


VI THE PARTICULAR CASE OF THE SOCIETAS PRIVATA EUROPAEA (SPE) STATUTE

Question 13
Should the Commission explore alternative means to support European SMEs engaged in
cross-border activities?

EUROCHAMBRES believes that further efforts should be made to reach an agreement on the SPE
statute.

The Council discussions have considerably complexified the initial proposal. EUROCHAMBRES
suggests the Member States to start fresh on this issue and bring the negotiations to an agreement
that contains rules which are clear, simple and favourable to SMEs.

VII CROSS-BORDER TRANSFER OF A COMPANY'S REGISTERED OFFICE

Question 14
Should the EU act to facilitate the cross-border transfer of a company's registered office?

In general, EUROCHAMBRES favours the idea of EU action to facilitate the cross-border transfer of a
company's registered office. From an SME perspective, it is obvious that clear and comprehensive
rules are urgently needed. Currently too many issues remain unclear, and legal certainty is vital for the
transfer of a registered office.

This could be done through a harmonizing Directive. Such rules to facilitate the cross-border transfer
of a company’s seat should clearly state that there should be no obstacles to transfer a company’s
registered seat and that it is possible to preserve its existing legal structure.

Question 15
What should be the conditions for a cross-border transfer of registered office?

EUROCHAMBRES believes that the following conditions have to be met when transferring a
company’s registered office cross-border:
   • A transfer should not be possible if proceedings for winding up, liquidation, insolvency,
     suspension of payments or similar proceedings have been brought against the company.
   • A transfer should be accepted by all Member States even when not accompanied by the
     transfer of the company's headquarters or principal place of business.

Question 16
What should be the consequences of a cross-border transfer of registered office?

EUROCHAMBRES believes that the consequences of a cross-border transfer of registered office
should be the following:
   • There should be no winding-up of the company in the home Member State.
   • The company should not lose its legal personality.
   • The transfer should be tax neutral following the approach of Directive 90/434 applicable to
       mergers, divisions, transfers of assets and exchanges of shares concerning companies of
       different Member States.
   • A transfer should not result in the loss of the pre-existing rights of shareholders, members,
       creditors and employees of the company.




 EUROCHAMBRES’ Comments – Future of European Company Law                                      3
                                                                                      ANSWERS
                                                                                                June 2012


VIII CROSS-BORDER MERGERS

Question 17
Do you support further harmonized rules in the Directive?

EUROCHAMBRES supports further harmonized rules in the Directive on cross-border mergers of
limited-liability companies, especially the approval of the cross-border merger by the general meeting
and the publication of any communications required by law in the Official Journal of the EU.

IX CROSS-BORDER DIVISIONS

Question 18
Do you support introducing regulation regarding cross-border divisions at EU level?

EUROCHAMBRES is in favour of introducing legislation to facilitate cross-border divisions at EU level.
Such regulatory initiative should build upon the framework established in the Directive on cross-border
mergers, because this framework is already well known by the relevant stakeholders and it has proven
to be sustainable.

XII ADDITIONAL COMMENTS

Question 21
Do you wish to upload a document with additional comments?

In the opinion of EUROCHAMBRES, it is vital that an agreement on the Statute of a European Private
Company (SPE) is achieved. Such a company legal form would greatly benefit SMEs and facilitate
their cross-border expansion. Therefore, the Chambers network urges the Commission to take the
initiative, possibly by submitting a new proposal, and reach out to the Member States in order to give
priority to this issue.


At the same time, EUROCHAMBRES wishes to point out that the European Private Company legal
form will only be attractive to SMEs if it consists of clear and simple rules that are SME-friendly.
EUROCHAMBRES, as the largest representative of European SMEs, would therefore like to highlight
the essential elements that the European Private Company proposal should contain:

   •   The absence of a cross-border requirement to set up an SPE in the Commission proposal is
       very important for about 90% of European SMEs as they do not necessarily have cross-border
       activities from the start. Moreover, the cross-border criterion is not always easy to apply and
       would only undermine legal certainty.

   •   The possibility for the SPE to transfer its registered office to any Member State without any
       dissolution or creation of any legal person is crucial for SPE corporate mobility. It should be
       borne in mind that the SPE Regulation should not impose a more stringent regime than those
       imposed on national corporate forms. According to the CJEU case law, companies already
       registered and recognised in a Member State have the right to move their real seat to another
       Member State and must be recognised by the host Member State.

   •   No additional bureaucratic rules and costs should be imposed on SPEs on the pretext of
       enhancing transparency. This would be a strong obstacle to the adoption of the SPE. In any




 EUROCHAMBRES’ Comments – Future of European Company Law                                    4
                                                                                                    ANSWERS
                                                                                                               June 2012


        event, companies’ data will already be accessible through the European Business Registry,
        creating a high level of transparency and legal certainty.

  •     Minimum capital should be kept as low as possible to make the instrument attractive for SMEs
        and fully accessible to start-ups.

  •     The rules concerning the information and consultation of employees and, where applicable,
        their involvement in the company’s corporate bodies should be determined by the laws of the
        country of the SPE’s registered office. Since 2002, a general framework directive on
        information and consultation ensures that minimum standards concerning employee
        involvement in companies (SE) are in place in each Member State. These standards should be
        applied to employee involvement in SPEs and there is no need for specific rules for SPEs.




       EUROCHAMBRES – The Association of European Chambers of Commerce and Industry represents over 19 million
      enterprises in Europe through members in 45 countries and a European network of 2000 regional and local Chambers.
                                         Interest representative nbr 0014082722-83


Further information: Mr Vincent TILMAN, tel. +32 2 282 08 67, tilman@eurochambres.eu
Our detailed Position Papers are available on http://www.eurochambres.eu/Content/Default.asp?PageID=145




EUROCHAMBRES’ Comments – Future of European Company Law                                                    5
                                                                                      ANSWERS
                                                                                                 June 2012




                                   European Commission’s
                     Consultation on the future of European Company Law



Executive summary

EUROCHAMBRES supports further development of European Company Law and believes that there
are areas which could be harmonized, especially with regard to cross-border activities of companies.

At the same time EUROCHAMBRES reiterates its support for the creation of a new EU company legal
form – the European Private Company. EUROCHAMBRES strongly believes that the European
Private Company would allow companies, and in particular SMEs, to adopt a simple and flexible
statute that would facilitate their expansion within the Internal Market. Therefore EUROCHAMBRES
calls upon the Commission to reinitiate the debate on the Statute for a European Private Company,
possibly with a new proposal, and look for alternative ways to get this political project approved by
Member States.


Answers to selected questions from the consultation

II OBJECTIVES OF EUROPEAN COMPANY LAW

Question 5
What should be the objective(s) of EU company law?

EUROCHAMBRES believes that the objectives of EU company law should be the following:
  • Improve the environment in which European companies operate, and their mobility in the EU.
  • Facilitate the creation of companies in Europe.
  • Setting the right framework for regulatory competition allowing for a high level of flexibility and
     choice.
  • Better protect creditors, shareholders and members.

III SCOPE OF EUROPEAN COMPANY LAW

Question 6
Would you support that the EU's priority should be to improve the existing harmonised legal
framework or, rather, to explore new areas for harmonisation?

In the opinion of EUROCHAMBRES, both approaches could be combined.

With regard to exploring new areas for further harmonization, EU’s work should concentrate on:
   • cross-border transfer of registered office,
   • cross-border divisions, and
   • cross-border conversion.

The establishment and operation of EU companies should be simplified and its cost should be
reduced, e.g. by making it possible to found a company via Internet or by elimination of unnecessary
formal requirements such as the involvement of a notary.



 EUROCHAMBRES’ Comments – Future of European Company Law                                     1
                                                                                     ANSWERS
                                                                                               June 2012




V EU COMPANY LEGAL FORMS

Question 9
What, if any, is the added value that EU company legal forms bring for European business?

EUROCHAMBRES sees potential in the EU company legal forms, but it should be noted that in many
Member States these legal forms were hardly adopted. It appears that it is not only the company legal
form that matters, but the whole legal framework of a given Member State should be considered.

EUROCHAMBRES considers the following factors as potential added value of the EU company legal
forms:
    • The European image of those company law forms.
    • Savings in costs of cross-border transactions.
    • The possibility not to be subject to compulsory national requirements (for example, the SE
       allow public limited-liability companies to choose between one-tier and two-tier management
       structure).
    • Other factors, such as: the possibility to use one legal form in several Member States;
       reduction of costs of establishment and consultations; efficient control of subsidiaries in
       different Member States; the use of the same corporate governance rules for all the
       subsidiaries.

Question 10
What, if any, are the main shortcomings of EU legislation introducing EU company legal
forms?

EUROCHAMBRES sees the following as the main shortcomings of EU legislation on EU company
legal forms:
    • The complexity linked to frequent cross-references to relevant national legislation.
    • The uncertainty linked to the application of different national legislations that are applied
        simultaneously.
    • The differences in the way EU company law forms are understood and used at national level.
    • Other factors, such as: EU company legal forms still involve too many administrative burdens;
        a European Private Company for SMEs is needed.

Question 11
Should existing EU company legal forms be reviewed?

EUROCHAMBRES supports the revision of the existing EU company legal forms, especially with
regard to:
   • Simplification and rationalisation of existing procedures.
   • Increased uniformity through reduction of cross-references to national legislation.
   • Possibility to have the registered office and the headquarters in two Member States.
   • Other issues: extension of establishment requirements; legal forms which can be merged in
       order to establish a new company.




 EUROCHAMBRES’ Comments – Future of European Company Law                                   2
                                                                                        ANSWERS
                                                                                                  June 2012


VI THE PARTICULAR CASE OF THE SOCIETAS PRIVATA EUROPAEA (SPE) STATUTE

Question 13
Should the Commission explore alternative means to support European SMEs engaged in
cross-border activities?

EUROCHAMBRES believes that further efforts should be made to reach an agreement on the SPE
statute.

The Council discussions have considerably complexified the initial proposal. EUROCHAMBRES
suggests the Member States to start fresh on this issue and bring the negotiations to an agreement
that contains rules which are clear, simple and favourable to SMEs.

VII CROSS-BORDER TRANSFER OF A COMPANY'S REGISTERED OFFICE

Question 14
Should the EU act to facilitate the cross-border transfer of a company's registered office?

In general, EUROCHAMBRES favours the idea of EU action to facilitate the cross-border transfer of a
company's registered office. From an SME perspective, it is obvious that clear and comprehensive
rules are urgently needed. Currently too many issues remain unclear, and legal certainty is vital for the
transfer of a registered office.

This could be done through a harmonizing Directive. Such rules to facilitate the cross-border transfer
of a company’s seat should clearly state that there should be no obstacles to transfer a company’s
registered seat and that it is possible to preserve its existing legal structure.

Question 15
What should be the conditions for a cross-border transfer of registered office?

EUROCHAMBRES believes that the following conditions have to be met when transferring a
company’s registered office cross-border:
   • A transfer should not be possible if proceedings for winding up, liquidation, insolvency,
     suspension of payments or similar proceedings have been brought against the company.
   • A transfer should be accepted by all Member States even when not accompanied by the
     transfer of the company's headquarters or principal place of business.

Question 16
What should be the consequences of a cross-border transfer of registered office?

EUROCHAMBRES believes that the consequences of a cross-border transfer of registered office
should be the following:
   • There should be no winding-up of the company in the home Member State.
   • The company should not lose its legal personality.
   • The transfer should be tax neutral following the approach of Directive 90/434 applicable to
       mergers, divisions, transfers of assets and exchanges of shares concerning companies of
       different Member States.
   • A transfer should not result in the loss of the pre-existing rights of shareholders, members,
       creditors and employees of the company.




 EUROCHAMBRES’ Comments – Future of European Company Law                                      3
                                                                                      ANSWERS
                                                                                                June 2012


VIII CROSS-BORDER MERGERS

Question 17
Do you support further harmonized rules in the Directive?

EUROCHAMBRES supports further harmonized rules in the Directive on cross-border mergers of
limited-liability companies, especially the approval of the cross-border merger by the general meeting
and the publication of any communications required by law in the Official Journal of the EU.

IX CROSS-BORDER DIVISIONS

Question 18
Do you support introducing regulation regarding cross-border divisions at EU level?

EUROCHAMBRES is in favour of introducing legislation to facilitate cross-border divisions at EU level.
Such regulatory initiative should build upon the framework established in the Directive on cross-border
mergers, because this framework is already well known by the relevant stakeholders and it has proven
to be sustainable.

XII ADDITIONAL COMMENTS

Question 21
Do you wish to upload a document with additional comments?

In the opinion of EUROCHAMBRES, it is vital that an agreement on the Statute of a European Private
Company (SPE) is achieved. Such a company legal form would greatly benefit SMEs and facilitate
their cross-border expansion. Therefore, the Chambers network urges the Commission to take the
initiative, possibly by submitting a new proposal, and reach out to the Member States in order to give
priority to this issue.


At the same time, EUROCHAMBRES wishes to point out that the European Private Company legal
form will only be attractive to SMEs if it consists of clear and simple rules that are SME-friendly.
EUROCHAMBRES, as the largest representative of European SMEs, would therefore like to highlight
the essential elements that the European Private Company proposal should contain:

   •   The absence of a cross-border requirement to set up an SPE in the Commission proposal is
       very important for about 90% of European SMEs as they do not necessarily have cross-border
       activities from the start. Moreover, the cross-border criterion is not always easy to apply and
       would only undermine legal certainty.

   •   The possibility for the SPE to transfer its registered office to any Member State without any
       dissolution or creation of any legal person is crucial for SPE corporate mobility. It should be
       borne in mind that the SPE Regulation should not impose a more stringent regime than those
       imposed on national corporate forms. According to the CJEU case law, companies already
       registered and recognised in a Member State have the right to move their real seat to another
       Member State and must be recognised by the host Member State.

   •   No additional bureaucratic rules and costs should be imposed on SPEs on the pretext of
       enhancing transparency. This would be a strong obstacle to the adoption of the SPE. In any




 EUROCHAMBRES’ Comments – Future of European Company Law                                    4
                                                                                                    ANSWERS
                                                                                                               June 2012


        event, companies’ data will already be accessible through the European Business Registry,
        creating a high level of transparency and legal certainty.

  •     Minimum capital should be kept as low as possible to make the instrument attractive for SMEs
        and fully accessible to start-ups.

  •     The rules concerning the information and consultation of employees and, where applicable,
        their involvement in the company’s corporate bodies should be determined by the laws of the
        country of the SPE’s registered office. Since 2002, a general framework directive on
        information and consultation ensures that minimum standards concerning employee
        involvement in companies (SE) are in place in each Member State. These standards should be
        applied to employee involvement in SPEs and there is no need for specific rules for SPEs.




       EUROCHAMBRES – The Association of European Chambers of Commerce and Industry represents over 19 million
      enterprises in Europe through members in 45 countries and a European network of 2000 regional and local Chambers.
                                         Interest representative nbr 0014082722-83


Further information: Mr Vincent TILMAN, tel. +32 2 282 08 67, tilman@eurochambres.eu
Our detailed Position Papers are available on http://www.eurochambres.eu/Content/Default.asp?PageID=145




EUROCHAMBRES’ Comments – Future of European Company Law                                                    5

				
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