Council Directive 2003/72/EC

 

 

 

of 22 July 2003

 

 

 

supplementing the Statute for a European Cooperative Society with regard to the involvement of employees

 

 

 

THE COUNCIL OF THE EUROPEAN UNION,

 

Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof,

 

 

 

Having regard to the proposal from the Commission[1],

 

 

 

Having regard to the opinion of the European Parliament[2],

 

 

 

Having regard to the opinion of the European Economic and Social Committee[3],

 

 

 

Whereas:

 

 

 

(1)     In order to attain the objectives of the Treaty, Council Regulation (EC) No 1435/2003[4] establishes a Statute for a European Cooperative Society (SCE).

 

 

 

(2)     That Regulation aims at creating a uniform legal framework within which cooperatives and other entities and natural persons from different Member States should be able to plan and carry out the reorganisation of their business in cooperative form on a Community scale.

 

 

 

(3)     In order to promote the social objectives of the Community, special provisions have to be set, notably in the field of employee involvement, aimed at ensuring that the establishment of an SCE does not entail the disappearance or reduction of practices of employee involvement existing within the entities participating in the establishment of an SCE. This objective should be pursued through the establishment of a set of rules in this field, supplementing the provisions of Regulation (EC) No 1435/2003.

 

 

 

(4)     Since the objectives of the proposed action, as outlined above, cannot be sufficiently achieved by the Member States, in that the object is to establish a set of rules on employee-involvement applicable to the SCE, and can therefore, by reason of the scale and impact of the proposed action, be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary to achieve these objectives.

 

 

 

(5)     The great diversity of rules and practices existing in the Member States as regards the manner in which employees' representatives are involved in decision-making within cooperatives makes it inadvisable to set up a single European model of employee involvement applicable to the SCE.

 

 

 

(6)     Information and consultation procedures at transnational level should be ensured in all cases of creation of an SCE, with the necessary adaptation for SCEs formed ex novo where this is justified by their size, as measured in terms of employment.

 

 

 

(7)     If participation rights exist within one or more entities establishing an SCE, they should in principle be preserved through their transfer to the SCE, once established, unless the parties decide otherwise.

 

 

 

(8)     The concrete procedures of employee transnational information and consultation, as well as, if applicable, participation, to apply to each SCE should be defined primarily by means of an agreement between the parties concerned or, in the absence thereof, through the application of a set of subsidiary rules.

 

 

 

(9)     Member States should still have the option of not applying the standard rules relating to participation in the case of a merger, given the diversity of national systems for employee involvement. Existing systems and practices of participation where appropriate at the level of participating entities must in that case be maintained by adapting registration rules.

 

 

 

(10)   The voting rules within the special body representing the employees for negotiation purposes, in particular when concluding agreements providing for a level of participation lower than the one existing within one or more of the participating entities, should be proportionate to the risk of disappearance or reduction of existing systems and practices of participation. That risk is greater in the case of an SCE established by way of transformation or merger than by way of creating an ex novo SCE.

 

 

 

(11)   In the absence of an agreement subsequent to the negotiation between employees' representatives and the competent organs of the participating entities, provision should be made for certain standard rules to apply to the SCE, once it is established. These standard rules should ensure effective practices of transnational information and consultation of employees, as well as their participation in the relevant organs of the SCE if such participation existed before its establishment within the participating entities.

 

 

 

(12)   When application of the abovementioned procedures to the entities participating in the ex novo SCE cannot be justified because of their small size as measured in terms of employment, the SCE should be subject to the national rules on the involvement of employees in force in the Member State where it establishes its registered office, or in the Member States where it has subsidiaries or establishments. This should be without prejudice to the obligation placed on an SCE already established to implement these procedures if a significant number of employees so requests.

 

 

 

(13)   Specific provisions should apply to employee participation in general meetings, in so far as national laws so allow. The application of these provisions does not preclude the application of other forms of participation, as provided for in this Directive.

 

 

 

(14)   Member States should ensure through appropriate provisions that, in the case of structural changes following the creation of an SCE, the arrangements for the involvement of employees can, where appropriate, be renegotiated.

 

 

 

(15)   Provision should be made for the employees' representatives acting within the framework of this Directive to enjoy, when exercising their functions, the same protection and guarantees as those provided for employees' representatives by the legislation and/or practice of the country of employment. They should not be subject to any discrimination, including harassment, as a result of the lawful exercise of their activities and should enjoy adequate protection as regards dismissal and other sanctions.

 

 

 

(16)   The confidentiality of sensitive information should be preserved even after the expiry of the terms of office of the employees' representatives, and provision should be made to allow the competent organ of the SCE to withhold information which would seriously harm, if subject to public disclosure, the functioning of the SCE.

 

 

 

(17)   Where an SCE and its subsidiaries and establishments are subject to Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees[5], the provisions of that Directive and the provisions transposing it into national legislation should not apply to it nor to its subsidiaries and establishments, unless the special negotiating body decides not to open negotiations or to terminate negotiations already opened.

 

 

 

(18)   This Directive should not affect other existing rights regarding involvement and need not affect other existing representation structures, provided for by Community and national laws and practices.

 

(19)   Member States should take appropriate measures in the event of failure to comply with the obligations laid down in this Directive.

 

 

 

(20)   The Treaty has not provided the necessary powers for the Community to adopt this Directive, other than those provided for in Article 308.

 

 

 

(21)   It is a fundamental principle and stated aim of this Directive to secure employees' acquired rights as regards involvement in company decisions. Employee rights in force before the establishment of SCEs should provide the basis for employee rights of involvement in the SCE (the "before and after" principle). Consequently, that approach should apply not only to the initial establishment of an SCE but also to structural changes in an existing SCE and to the entities affected by structural change processes. Therefore, where the registered office of an SCE is transferred from one Member State to another, at least the same level of employee involvement rights should continue to apply. Further, if the threshold concerning employee involvement is reached or exceeded after the registration of an SCE, these rights should apply in the same manner in which they would have applied, had the threshold been reached or exceeded before registration.

 

 

 

(22)   Member States may provide that representatives of trade unions may be members of a special negotiating body regardless of whether they are employees of an entity participating in the establishment of an SCE. Member States should in this context in particular be able to introduce this right in cases where trade union representatives have the right to be members of, and to vote in, supervisory or administrative company organs in accordance with national legislation.

 

 

 

(23)   In several Member States, employee involvement and other areas of industrial relations are based on both national legislation and practice which in this context is understood also to cover collective agreements at various national, sectorial and/or company levels,

 

 

 

HAS ADOPTED THIS DIRECTIVE:

 

 

 

 

 

 

 

SECTION I - GENERAL

 

 

 

Article 1

 

Objective

 

 

 

1.      This Directive governs the involvement of employees in the affairs of European Cooperative Societies (hereinafter referred to as SCEs), as referred to in Regulation (EC) No 1435/2003.

 

2.      To this end, arrangements for the involvement of employees shall be established in every SCE in accordance with the negotiating procedure referred to in Articles 3 to 6 or, under the circumstances specified in Articles 7 and 8, in accordance with the Annex.

 

 


Article 2

 

Definitions

 

 

 

For the purposes of this Directive:

 

 

 

(a)     "SCE" means any cooperative society established in accordance with Regulation (EC) No 1435/2003;

 

 

 

(b)     "participating legal entities" means companies and firms within the meaning of the second paragraph of Article 48 of the Treaty, including cooperatives, as well as legal bodies formed under, and governed by, the law of a Member State, directly participating in the establishing of an SCE;

 

 

 

(c)     "subsidiary" of a participating legal entity or of an SCE means an undertaking over which that legal entity or SCE exercises a dominant influence defined in accordance with Article 3(2) to (7) of Directive 94/45/EC;

 

 

 

(d)    "concerned subsidiary or establishment" means a subsidiary or establishment of a participating legal entity which is proposed to become a subsidiary or establishment of the SCE upon its formation;

 

 

 

(e)     "employees' representatives" means the employees' representatives provided for by national law and/or practice;

 

 

 

(f)     "representative body" means the body representative of the employees set up by the agreements referred to in Article 4 or in accordance with the provisions of the Annex, with the purpose of informing and consulting the employees of an SCE and its subsidiaries and establishments situated in the Community and, where applicable, of exercising participation rights in relation to the SCE;

 

 

 

(g)     "special negotiating body" means the body established in accordance with Article 3 to negotiate with the competent organ of the participating legal entities regarding the establishment of arrangements for the involvement of employees within the SCE;

 

 

 

(h)     "involvement of employees" means any mechanism, including information, consultation and participation, through which employees' representatives may exercise an influence on decisions to be taken within an undertaking;

 

 

 

(i)      "information" means the informing of the body representative of the employees and/or the employees' representatives by the competent organ of the SCE on questions which concern the SCE itself and any of its subsidiaries or establishments situated in another Member State or which exceed the powers of the decision-making organs in a single Member State at a time, in a manner and with a content which allows the employees' representatives to undertake an in-depth assessment of the possible impact and, where appropriate, prepare consultations with the competent organ of the SCE;

 

 

 

(j)      "consultation" means the establishment of dialogue and exchange of views between the body representative of the employees and/or the employees' representatives and the competent organ of the SCE, at a time, in a manner and with a content which allows the employees' representatives, on the basis of information provided, to express an opinion on measures envisaged by the competent organ which may be taken into account in the decision-making process within the SCE;

 

 

 

(k)     "participation" means the influence of the body representative of the employees and/or the employees' representatives in the affairs of a legal entity by way of:

 

 

 

-        the right to elect or appoint some of the members of the legal entity's supervisory or administrative organ, or

 

 

 

-        the right to recommend and/or oppose the appointment of some or all of the members of the legal entity's supervisory or administrative organ.

 

 

 

SECTION II - NEGOTIATING PROCEDURE APPLICABLE TO SCEs ESTABLISHED BY AT LEAST TWO LEGAL ENTITIES OR BY TRANSFORMATION

 

 

 

Article 3

 

Creation of a special negotiating body

 

 

 

1.      Where the management or administrative organs of participating legal entities draw up a plan for the establishment of an SCE, they shall as soon as possible take the necessary steps, including providing information on the identity of the participating legal entities and subsidiaries or establishments, as well as the number of their employees, to start negotiations with the representatives of the legal entities' employees on arrangements for the involvement of employees in the SCE.

 

 

 

2.      For this purpose, a special negotiating body representative of the employees of the participating legal entities and concerned subsidiaries or establishments shall be created in accordance with the following provisions:

 

 

 

(a)     in electing or appointing members of the special negotiating body, it shall be ensured:

 

 

 

(i)      that such members are elected or appointed in proportion to the number of employees employed in each Member State by the participating legal entities and concerned subsidiaries or establishments, by allocating in respect of a Member State one seat per each portion of employees employed in that Member State which equals 10 %, or a fraction thereof, of the number of employees employed in all the Member States taken together;

 

 

 

(ii)     that in the case of an SCE formed by way of merger, there are such further additional members from each Member State as may be necessary in order to ensure that the special negotiating body includes at least one member representing each participating cooperative which is registered and has employees in that Member State and which it is proposed will cease to exist as a separate legal entity following the registration of the SCE, insofar as:

 

 

 

-        the number of such additional members does not exceed 20 % of the number of members designated by virtue of point (i); and

 

 

 

-        the composition of the special negotiating body does not entail a double representation of the employees concerned.

 

 

 

If the number of such cooperatives is higher than the number of additional seats available pursuant to the first subparagraph, these additional seats shall be allocated to cooperatives in different Member States by decreasing order of the number of employees they employ.

 

 

 

(b)     Member States shall determine the method to be used for the election or appointment of the members of the special negotiating body who are to be elected or appointed in their territories. They shall take the necessary measures to ensure that, as far as possible, such members shall include at least one member representing each participating legal entity which has employees in the Member State concerned. Such measures must not increase the overall number of members. The methods used to nominate, appoint or elect employee representatives should seek to promote gender balance.

 

 

 

Member States may provide that such members may include representatives of trade unions whether or not they are employees of a participating legal entity or concerned subsidiary or establishment.

 

 

 

Without prejudice to national legislation and/or practice laying down thresholds for the establishing of a representative body, Member States shall provide that employees in undertakings or establishments in which there are no employees' representatives through no fault of their own have the right to elect or appoint members of the special negotiating body.

 

 

 

3.      The special negotiating body and the competent organs of the participating legal entities shall determine, by written agreement, arrangements for the involvement of employees within the SCE.

 

 

 

To this end, the competent organs of the participating legal entities shall inform the special negotiating body of the plan and the actual process of establishing the SCE, up to its registration.

 

 

 

4.      Subject to paragraph 6, the special negotiating body shall take decisions by an absolute majority of its members, provided that such a majority also represents an absolute majority of the employees. Each member shall have one vote. However, should the result of the negotiations lead to a reduction of participation rights, the majority required for a decision to approve such an agreement shall be the votes of two thirds of the members of the special negotiating body representing at least two thirds of the employees, including the votes of members representing employees employed in at least two Member States,

 

 

 

-        in the case of an SCE to be established by way of merger, if participation covers at least 25 % of the overall number of employees of the participating cooperatives, or

 

 

 

-        in the case of an SCE to be established by any other way, if participation covers at least 50 % of the overall number of employees of the participating legal entities.

 

 

 

Reduction of participation rights means a proportion of members of the organs of the SCE within the meaning of Article 2(k), which is lower than the highest proportion existing within the participating legal entities.

 

 

 

5.      For the purpose of the negotiations, the special negotiating body may request experts of its choice, for example representatives of appropriate Community level trade union organisations, to assist it with its work. Such experts may be present at negotiation meetings in an advisory capacity at the request of the special negotiating body, where appropriate to promote coherence and consistency at Community level. The special negotiating body may decide to inform the representatives of appropriate external organisations, including trade unions, of the start of the negotiations.

 

 

 

6.      The special negotiating body may decide by the majority set out in the second subparagraph not to open negotiations or to terminate negotiations already opened, and to rely on the rules on information and consultation of employees in force in the Member States where the SCE has employees. Such a decision shall stop the procedure to conclude the agreement referred to in Article 4. Where such a decision has been taken, none of the provisions of the Annex shall apply.

 

 

 

The majority required to decide not to open or to terminate negotiations shall be the votes of two thirds of the members representing at least two thirds of the employees, including the votes of members representing employees employed in at least two Member States.

 

 

 

In the case of an SCE established by way of transformation, this paragraph shall not apply if there is participation in the cooperative to be transformed.

 

 

 

The special negotiating body shall be reconvened at the written request of at least 10 % of the employees of the SCE, its subsidiaries and establishments, or their representatives, at the earliest two years after the abovementioned decision, unless the parties agree to negotiations being reopened sooner. If the special negotiating body decides to reopen negotiations with the management but no agreement is reached as a result of those negotiations, none of the provisions of the Annex shall apply.

 

7.      Any expenses relating to the functioning of the special negotiating body and, in general, to negotiations shall be borne by the participating legal entities so as to enable the special negotiating body to carry out its task in an appropriate manner.

 

 

 

In compliance with this principle, Member States may lay down budgetary rules regarding the operation of the special negotiating body. They may in particular limit the funding to cover one expert only.

 

 

 

Article 4

 

Content of the agreement

 

 

 

1.      The competent organs of the participating legal entities and the special negotiating body shall negotiate in a spirit of cooperation with a view to reaching an agreement on arrangements for the involvement of the employees within the SCE.

 

 

 

2.      Without prejudice to the autonomy of the parties, and subject to paragraph 4, the agreement referred to in paragraph 1 between the competent organs of the participating legal entities and the special negotiating body shall specify:

 

 

 

(a)     the scope of the agreement;

 

 

 

(b)     the composition, number of members and allocation of seats on the representative body which will be the discussion partner of the competent organ of the SCE in connection with arrangements for the information and consultation of the employees of the SCE and its subsidiaries and establishments;

 

 

 

(c)     the functions and the procedure for the information and consultation of the representative body;

 

 

 

(d)    the frequency of meetings of the representative body;

 

 

 

(e)     the financial and material resources to be allocated to the representative body;

 

 

 

(f)     if, during negotiations, the parties decide to establish one or more information and consultation procedures instead of a representative body, the arrangements for implementing those procedures;

 

 

 

(g)     if, during negotiations, the parties decide to establish arrangements for participation, the substance of those arrangements including (if applicable) the number of members in the SCE's administrative or supervisory body which the employees will be entitled to elect, appoint, recommend or oppose, the procedures as to how these members may be elected, appointed, recommended or opposed by the employees, and their rights;

 

 

 

(h)     the date of entry into force of the agreement and its duration, cases where the agreement should be renegotiated and the procedure for its renegotiation, including, where appropriate, in the event of structural changes in the SCE and its subsidiaries and establishments which occur after the creation of the SCE.

 

 

 

3.      The agreement shall not, unless provision is made otherwise therein, be subject to the standard rules referred to in the Annex.

 

 

 

4.      Without prejudice to Article 15(3)(a), in the case of an SCE established by means of transformation, the agreement shall provide for at least the same level of all elements of employee involvement as the ones existing within the cooperative to be transformed into an SCE.

 

 

 

5.      The agreement may specify the arrangements for the entitlement of employees to participate in the general meetings or in the section or sectorial meetings in accordance with Article 9 of this Directive and Article 59(4) of Regulation (EC) No 1435/2003.

 

 

 

Article 5

 

Duration of negotiations

 

 

 

1.      Negotiations shall commence as soon as the special negotiating body is established and may continue for six months thereafter.

 

 

 

2.      The parties may decide, by joint agreement, to extend negotiations beyond the period referred to in paragraph 1, up to a total of one year from the establishment of the special negotiating body.

 

 

 

Article 6

 

Legislation applicable to the negotiation procedure

 

 

 

Except where otherwise provided in this Directive, the legislation applicable to the negotiation procedure provided for in Articles 3, 4 and 5 shall be the legislation of the Member State in which the registered office of the SCE is to be situated.

 

 

 

Article 7

 

Standard rules

 

 

 

1.      In order to achieve the objective described in Article 1, Member States shall lay down standard rules on employee involvement which must satisfy the provisions set out in the Annex.

 

 

 

The standard rules as laid down by the legislation of the Member State in which the registered office of the SCE is to be situated shall apply from the date of the registration of the SCE where either:

 

 

 

(a)     the parties so agree; or

 

 

 

(b)     by the deadline laid down in Article 5, no agreement has been concluded, and:

 

 

 

-        the competent organ of each of the participating legal entities decides to accept the application of the standard rules in relation to the SCE and so to continue with its registration of the SCE, and

 

 

 

-        the special negotiating body has not taken the decision provided in Article 3(6).

 

 

 

2.      Moreover, the standard rules fixed by the national legislation of the Member State of registration in accordance with part 3 of the Annex shall apply only:

 

 

 

(a)     in the case of an SCE established by transformation, if the rules of a Member State relating to employee participation in the administrative or supervisory body applied to a cooperative transformed into an SCE;

 

 

 

(b)     in the case of an SCE established by merger:

 

 

 

-        if, before registration of the SCE, one or more forms of participation applied in one or more of the participating cooperatives covering at least 25 % of the total number of employees employed by them, or

 

 

 

-        if, before registration of the SCE, one or more forms of participation applied in one or more of the participating cooperatives covering less than 25 % of the total number of employees employed by them and if the special negotiating body so decides;

 

 

 

(c)     in the case of an SCE established by any other way;

 

 

 

-        if, before registration of the SCE, one or more forms of participation applied in one or more of the participating legal entities covering at least 50 % of the total number of employees employed by them; or

 

 

 

-        if, before registration of the SCE, one or more forms of participation applied in one or more of the participating legal entities covering less than 50 % of the total number of employees employed by them and if the special negotiating body so decides.

 

 

 

If there was more than one form of participation within the various participating legal entities, the special negotiating body shall decide which of those forms must be established in the SCE. Member States may fix the rules which are applicable in the absence of any decision on the matter for an SCE registered in their territory. The special negotiating body shall inform the competent organs of the participating legal entities of any decisions taken pursuant to this paragraph.

 

 

 

3.      Member States may lay down that the standard rules referred to in Part 3 of the Annex shall not apply in the case provided for in paragraph 2(b).

 

 

 

SECTION III - RULES APPLICABLE TO SCEs ESTABLISHED EXCLUSIVELY BY NATURAL PERSONS OR BY A SINGLE LEGAL ENTITY AND NATURAL PERSONS

 

 

 

Article 8

 

 

 

1.      In the case of an SCE established exclusively by natural persons or by a single legal entity and natural persons, which together employ at least 50 employees in at least two Member States, the provisions of Articles 3 to 7 shall apply.

 

 

 

2.      In the case of an SCE established exclusively by natural persons or by a single legal entity and natural persons, which together employ fewer than 50 employees, or employ 50 or more employees in only one Member State, employee involvement shall be governed by the following:

 

 

 

-        in the SCE itself, the provisions of the Member State of the SCE's registered office, which are applicable to other entities of the same type, shall apply,

 

 

 

-        in its subsidiaries and establishments, the provisions of the Member State where they are situated, and which are applicable to other entities of the same type, shall apply.

 

 

 

In the case of transfer from one Member State to another of the registered office of an SCE governed by participation, at least the same level of employee participation rights shall continue to apply.

 

 

 

3.      If, after the registration of an SCE referred to in paragraph 2, at least one third of the total number of employees of the SCE and its subsidiaries and establishments in at least two different Member States so requests, or if the total number of employees reaches or exceeds 50 employees in at least two Member States, the provisions of Articles 3 to 7 shall be applied, mutatis mutandis. In this case, the words "participating legal entities" and "concerned subsidiaries or establishments" shall be replaced by the words "SCE" and "subsidiaries or establishments of the SCE" respectively.

 

 

 

SECTION IV - PARTICIPATION IN THE GENERAL MEETING OR SECTION OR SECTORIAL MEETING

 

 

 

Article 9

 

 

 

Subject to the limits laid down in Article 59(4) of Regulation (EC) No 1435/2003, the employees of the SCE and/or their representatives will be entitled to participate in the general meeting or, if it exists, in the section or sectorial meeting, with the right to vote, in the following circumstances:

 

 

 

1.      when the parties so decide in the agreement referred to in Article 4, or

 

 

 

2.      when a cooperative governed by such a system transforms itself into an SCE, or

 

 

 

3.      when, in the case of an SCE established by means other than transformation, a participating cooperative was governed by such a system and:

 

 

 

(i)      the parties cannot reach agreement, as referred to in Article 4, by the deadline laid down in Article 5; and

 

 

 

(ii)     Article 7(1)(b) and Part 3 of the Annex apply; and

 

 

 

(iii)    the participating cooperative governed by such a system has the highest proportion of participation, within the meaning of Article 2(k), in force in the participating cooperatives concerned before registration of the SCE.

 

 

 

SECTION V

 

MISCELLANEOUS PROVISIONS

 

 

 

Article 10

 

Reservation and confidentiality

 

 

 

1.      Member States shall provide that members of the special negotiating body or the representative body, and experts who assist them, are not authorised to reveal any information which as been given to them in confidence.

 

 

 

The same shall apply to employees' representatives in the context of an information and consultation procedure.

 

 

 

This obligation shall continue to apply, wherever the persons referred to may be, even after the expiry of their terms of office.

 

 

 

2.      Each Member State shall provide, in specific cases and under the conditions and limits laid down by national legislation, that the supervisory or administrative organ of an SCE or of a participating legal entity established in its territory is not obliged to transmit information where its nature is such that, according to objective criteria, to do so would seriously harm the functioning of the SCE (or, as the case may be, a participating legal entity) or its subsidiaries and establishments or would be prejudicial to them.

 

 

 

A Member State may make such dispensation subject to prior administrative or judicial authorisation.

 

 

 

3.      Each Member State may lay down particular provisions for SCEs in its territory which pursue directly and essentially the aim of ideological guidance with respect to information and the expression of opinions, on condition that, on the date of adoption of this Directive, such provisions already exist in the national legislation.

 

 

 

4.      In applying paragraphs 1, 2 and 3, Member States shall make provision for administrative or judicial appeal procedures which the employees' representatives may initiate when the supervisory or administrative organ of an SCE or of a participating legal entity demands confidentiality or does not give information.

 

 

 

Such procedures may include arrangements designed to protect the confidentiality of the information in question.

 

 

 

Article 11

 

Operation of the representative body and procedure for the information and consultation of employees

 

 

 

The competent organ of the SCE and the representative body shall work together in a spirit of cooperation with due regard for their reciprocal rights and obligations.

 

 

 

The same shall apply to cooperation between the supervisory or administrative organ of the SCE and the employees' representatives in conjunction with a procedure for the information and consultation of employees.

 

 

 

Article 12

 

Protection of employees' representatives

 

 

 

The members of the special negotiating body, the members of the representative body, any employees' representatives exercising functions under the information and consultation procedure and any employees' representatives in the supervisory or administrative organ of an SCE who are employees of the SCE, its subsidiaries or establishments or of a participating legal entity shall, in the exercise of their functions, enjoy the same protection and guarantees provided for employees' representatives by the national legislation and/or practice in force in their country of employment.

 

 

 

This shall apply in particular to attendance at meetings of the special negotiating body or representative body, any other meeting under the agreement referred to in Article 4(2)(f) or any meeting of the administrative or supervisory organ, and to the payment of wages for members employed by a participating legal entity or the SCE or its subsidiaries or establishments during a period of absence necessary for the performance of their duties.

 

 

 

Article 13

 

Misuse of procedures

 

 

 

Member States shall take appropriate measures in conformity with Community law with a view to preventing the misuse of an SCE for the purpose of depriving employees of rights to employee involvement or withholding such rights.

 

 

 

Article 14

 

Compliance with this Directive

 

 

 

1.      Each Member State shall ensure that the management of establishments of an SCE and the supervisory or administrative organs of subsidiaries and of participating legal entities which are situated within its territory and the employees' representatives or, as the case may be, the employees themselves abide by the obligations laid down by this Directive, regardless of whether or not the SCE has its registered office within its territory.

 

 

 

2.      Member States shall provide for appropriate measures in the event of failure to comply with this Directive; in particular they shall ensure that administrative or legal procedures are available to enable the obligations deriving from this Directive to be enforced.

 

 

 

Article 15

 

Link between this Directive and other provisions

 

 

 

1.      Where an SCE is a Community-scale undertaking or a controlling undertaking of a Community-scale group of undertakings within the meaning of Directive 94/45/EC or of Council Directive 97/74/EC of 15 December 1997 extending the said Directive to the United Kingdom[6], the provisions of these Directives and the provisions transposing them into national legislation shall not apply to them or to their subsidiaries.

 

 

 

However, where the special negotiating body decides in accordance with Article 3(6) not to open negotiations or to terminate negotiations already opened, Directive 94/45/EC or Directive 97/74/EC and the provisions transposing them into national legislation shall apply.

 

 

 

2.      Provisions on the participation of employees in company bodies provided for by national legislation and/or practice, other than those implementing this Directive, shall not apply to the SCEs to which Articles 3 to 7 apply.

 

 

 

3.      This Directive shall not prejudice:

 

 

 

(a)     the existing rights to involvement of employees provided for by national legislation and/or practice in the Member States as enjoyed by employees of the SCE and its subsidiaries and establishments, other than participation in the bodies of the SCE;

 

 

 

(b)     the provisions on participation in the bodies laid down by national legislation and/or practice applicable to the subsidiaries of the SCE or to SCEs to which Articles 3 to 7 do not apply.

 

 

 

4.      In order to preserve the rights referred to in paragraph 3, Member States may take the necessary measures to guarantee that the structures of employee representation in participating legal entities which will cease to exist as separate legal entities are maintained after the registration of the SCE.

 

 

 

Article 16

 

Final provisions

 

 

 

1.      Member States shall adopt the laws, regulations and administrative provisions necessary to comply with this Directive no later than 18 August 2006, or shall ensure by that date at the latest that management and labour introduce the required provisions by way of agreement, the Member States being obliged to take all necessary steps enabling them at all times to guarantee the results imposed by this Directive. They shall forthwith inform the Commission thereof.

 

 

 

2.      When Member States adopt these measures, they shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by the Member States.

 

Article 17

 

Review by the Commission

 

 

 

Not later than 18 August 2009, the Commission shall, in consultation with the Member States and with management and labour at Community level, review the application of applying this Directive, with a view to proposing suitable amendments to the Council where necessary.

 

 

 

Article 18

 

Entry into force

 

 

 

This Directive shall enter into force on the date of its publication in the Official Journal of the European Union.

 

 

 

Article 19

 

Addressees

 

 

 

This Directive is addressed to the Member States.

 

 

 

 

 

Done at Brussels, 22 July 2003.

 

 

 

For the Council

 

The President

 

G. Alemanno

 

 

 

 


ANNEX

 

 

 

STANDARD RULES

 

(referred to in Articles 7 and 8)

 

 

 

Part 1: Composition of the body representative of the employees

 

 

 

In order to achieve the objective described in Article 1, and in the cases referred to in Article 7, a representative body shall be set up in accordance with the following rules:

 

 

 

(a)     The representative body shall be composed of employees of the SCE and its subsidiaries and establishments elected or appointed from their number by the employees' representatives or, in the absence thereof, by the entire body of employees.

 

 

 

(b)     The election or appointment of members of the representative body shall be carried out in accordance with national legislation and/or practice.

 

 

 

Member States shall lay down rules to ensure that the number of members of, and allocation of seats on, the representative body shall be adapted to take account of changes occurring within the SCE and its subsidiaries and establishments. The methods used to nominate, appoint or elect employee representatives should seek to promote gender balance.

 

 

 

(c)     Where its size so warrants, the representative body shall elect a select committee from among its members, comprising at most three members.

 

 

 

(d)    The representative body shall adopt its rules of procedure.

 

 

 

(e)     The members of the representative body are elected or appointed in proportion to the number of employees employed in each Member State by the SCE and its subsidiaries or establishments, by allocating in respect of a Member State one seat per each portion of employees employed in that Member State which equals 10 %, or a fraction thereof, of the number of employees employed by them in all the Member States taken together.

 

 

 

(f)     The competent organ of the SCE shall be informed of the composition of the representative body.

 

 

 

(g)     Not later than four years after its establishment, the representative body shall examine whether to open negotiations for the conclusion of the agreement referred to in Articles 4 and 7 or to continue to apply the standard rules adopted in accordance with this Annex.

 

 

 

Article 3(4) to (7) and Articles 4, 5 and 6 shall apply, mutatis mutandis, if a decision has been taken to negotiate an agreement according to Article 4, in which case the term "special negotiating body" shall be replaced by "representative body". Where, by the deadline by which the negotiations come to an end, no agreement has been concluded, the arrangements initially adopted in accordance with the standard rules shall continue to apply.

 

 

 

Part 2: Standard rules for information and consultation

 

 

 

The competence and powers of the representative body set up in an SCE shall be governed by the following rules:

 

 

 

(a)     The competence of the representative body shall be limited to questions which concern the SCE itself and any of its subsidiaries or establishments situated in another Member State or which exceed the powers of the decision-making organs in a single Member State.

 

 

 

(b)     Without prejudice to meetings held pursuant to paragraph (c), the representative body shall have the right to be informed and consulted and, for that purpose, to meet with the competent organ of the SCE at least once a year, on the basis of regular reports drawn up by the competent organ, on the progress of the business of the SCE and its prospects. The local managements shall be informed accordingly.

 

 

 

The competent organ of the SCE shall provide the representative body with the agenda for meetings of the administrative, or, where appropriate, the management and supervisory organ, and with copies of all documents submitted to the general meeting of its members.

 

 

 

The meeting shall relate in particular to the structure, economic and financial situation, the probable development of the business and of production and sales, initiatives with regard to corporate social responsibility, the situation and probable trend of employment, investments, and substantial changes concerning organisation, the introduction of new working methods or production processes, transfers of production, mergers, cut-backs or closures of undertakings, establishments or important parts thereof, and collective redundancies.

 

 

 

(c)     Where there are exceptional circumstances affecting the employees' interests to a considerable extent, particularly in the event of relocations, transfers, the closure of establishments or undertakings or collective redundancies, the representative body shall have the right to be informed. The representative body or, where it so decides, in particular for reasons of urgency, the select committee, shall have the right to meet at its request, the competent organ of the SCE or any more appropriate level of management within the SCE having its own powers of decision, so as to be informed and consulted on measures significantly affecting employees' interests.

 

Where the competent organ decides not to act in accordance with the opinion expressed by the representative body, this body shall have the right to a further meeting with the competent organ of the SCE with a view to seeking agreement.

 

 

 

In the case of a meeting organised with the select committee, those members of the representative body who represent employees who are directly concerned by the measures in question shall also have the right to participate.

 

 

 

The meetings referred to above shall not affect the prerogatives of the competent organ.

 

 

 

(d)    Member States may lay down rules on the chairing of information and consultation meetings.

 

 

 

Before any meeting with the competent organ of the SCE, the representative body or the select committee, where necessary enlarged in accordance with the third subparagraph of paragraph (c), shall be entitled to meet without the representatives of the competent organ being present.

 

 

 

(e)     Without prejudice to Article 10, the members of the representative body shall inform the representatives of the employees of the SCE and of its subsidiaries and establishments of the content and outcome of the information and consultation procedures.

 

 

 

(f)     The representative body or the select committee may be assisted by experts of its choice.

 

 

 

(g)     In so far as this is necessary for the fulfilment of their tasks, the members of the representative body shall be entitled to time off for training without loss of wages.

 

 

 

(h)     The costs of the representative body shall be borne by the SCE, which shall provide the body's members with the financial and material resources needed to enable them to perform their duties in an appropriate manner.

 

 

 

In particular, the SCE shall, unless otherwise agreed, bear the cost of organising meetings and providing interpretation facilities and the accommodation and travelling expenses of members of the representative body and the select committee.

 

 

 

In compliance with these principles, the Member States may lay down budgetary rules regarding the operation of the representative body. They may in particular limit funding to cover one expert only.

 

 


Part 3: Standard rules for participation

 

 

 

Employee participation in an SCE shall be governed by the following provisions:

 

 

 

(a)     In the case of an SCE established by transformation, if the rules of a Member State relating to employee participation in the administrative or supervisory body applied before registration, all aspects of employee participation shall continue to apply to the SCE. Paragraph (b) shall apply mutatis mutandis to that end.

 

 

 

(b)     In other cases where an SCE is established, the employees of the SCE, its subsidiaries and establishments and/or their representative body shall have the right to elect, appoint, recommend or oppose the appointment of a number of members of the administrative or supervisory body of the SCE equal to the highest proportion in force in the participating companies concerned before registration of the SCE.

 

 

 

(c)     If none of the participating legal entities was governed by participation rules before registration of the SCE, the latter shall not be required to establish provisions for employee participation.

 

 

 

(d)    The representative body shall decide on the allocation of seats within the administrative or supervisory body among the members representing the employees from the various Member States or on the way in which the SCE's employees may recommend or oppose the appointment of the members of these bodies according to the proportion of the SCE's employees in each Member State. If the employees of one or more Member States are not covered by this proportional criterion, the representative body shall appoint a member from one of those Member States, in particular the Member State of the SCE's registered office where that is appropriate. Each Member State may determine the allocation of the seats it is given within the administrative or supervisory body.

 

 

 

(e)     Every member of the administrative body or, where appropriate, the supervisory body of the SCE who has been elected, appointed or recommended by the representative body or, depending on the circumstances, by the employees shall be a full member with the same rights and obligations as the members representing the members of the cooperative, including the right to vote.

 

 

 

 

 



[1]       OJ C 236, 31.8.1993, p. 36.

[2]       OJ C 42, 15.2.1993, p. 75.

[3]       OJ C 223, 31.8.1992, p. 42.

[4]       See page 1 of this Official Journal.

[5]       OJ L 254, 30.9.1994, p. 64. Directive as amended by Directive 97/74/EC (OJ L 10, 16.1.1998, p. 22).

[6] OJ L 10, 16.1.1998, p. 22.

 

 

Avis juridique important

 

|

 

COUNCIL REGULATION (EEC) No 2137/85

 

of 25 July 1985

 

on the European Economic Interest Grouping (EEIG)

 

THE COUNCIL OF THE EUROPEAN

 

COMMUNITIES,

 

Having regard to the Treaty establishing the European Economic Community, and in particular Article 235 thereof,

 

Having regard to the proposal from the Commission[1],

 

Having regard to the opinion of the European Parliament[2],

 

Having regard to the opinion of the Economic and Social Committee[3],

 

Whereas a harmonious development of economic activities and a continuous and balanced expansion throughout the Community depend on the establishmend and smooth functioning of a common market offering conditions analogous to those of a national market; whereas to bring about this single market and to increase its unity a legal framework which facilitates the adaptation of their activities to the economic conditions of the Community should be created for natural persons, companies, firms and other legal bodies in particular; whereas to that end it is necessary that those natural persons, companies, firms and other legal bodies should be able to cooperate effectively across frontiers;

 

Whereas cooperation of this nature can encounter legal, fiscal or psychological difficulties; whereas the creation of an appropriate Community legal instrument in the form of a European Economic Interest Grouping would contribute to the achievement of the abovementioned objectives and therefore proves necessary;

 

Whereas the Treaty does not provide the necessary powers for the creation of such a legal instrument;

 

Whereas a grouping's ability to adapt to economic conditions must be guaranteed by the considerable freedom for its members in their contractual relations and the internal organization of the grouping;

 

Whereas a grouping differs from a firm or company principally in its purpose, which is only to facilitate or develop the economic activities of its members to enable them to improve their own results; whereas, by reason of that ancillary nature, a grouping's activities must be related to the economic activities of its members but not replace them so that, to that extent, for example, a grouping may not itself, with regard to third parties, practise a profession, the concept of economic activities being interpreted in the widest sense;

 

Whereas access to grouping form must be made as widely available as possible to natural persons, companies, firms and other legal bodies, in keeping with the aims of this Regulation; whereas this Regulation shall not, however, prejudice the application at national level of legal rules and/or ethical codes concerning the conditions for the pursuit of business and professional activities;

 

Whereas this Regulation does not itself confer on any person the right to participate in a grouping, even where the conditions it lays down are fulfilled;

 

Whereas the power provided by this Regulation to prohibit or restrict participation in grouping on grounds of public interest is without prejudice to the laws of Member States which govern the pursuit of activities and which may provide further prohibitions or restrictions or otherwise control or supervise participation in a grouping by any natural person, company, firm or other legal body or any class of them;

 

Whereas, to enable a grouping to achieve its purpose, it should be endowed with legal capacity and provision should be made for it to be represented vis-à-vis third parties by an organ legally separate from its membership;

 

Whereas the protection of third parties requires widespread publicity; whereas the members of a grouping have unlimited joint and several liability for the grouping's debts and other liabilities, including those relating to tax or social security, without, however, that principle's affecting the freedom to exclude or restrict the liability of one or more of its members in respect of a particular debt or other liability by means of a specific contract between the grouping and a third party;

 

Whereas matters relating to the status or capacity of natural persons and to the capacity of legal persons are governed by national law;

 

Whereas the grounds for winding up which are peculiar to the grouping should be specific while referring to national law for its liquidation and the conclusion thereof;

 

Whereas groupings are subject to national laws relating to insolvency and cessation of payments; whereas such laws may provide other grounds for the winding up of groupings;

 

Whereas this Regulation provides that the profits or losses resulting from the activities of a grouping shall be taxable only in the hands of its members; whereas it is understood that otherwise national tax laws apply, particularly as regards the apportionment of profits, tax procedures and any obligations imposed by national tax law;

 

Whereas in matters not covered by this Regulation the laws of the Member States and Community law are applicable, for example with regard to:

 

-    social and labour laws,

 

-    competition law,

 

-    intellectual property law;

 

Whereas the activities of groupings are subject to the provisions of Member States' laws on the pursuit and supervision of activities; whereas in the event of abuse or circumvention of the laws of a Member State by a grouping or its members that Member State may impose appropriate sanctions;

 

Whereas the Member States are free to apply or to adopt any laws, regulations or administrative measures which do not conflict with the scope or objectives of this Regulation;

 

Whereas this Regulation must enter into force immediately in its entirety; whereas the implementation of some provisions must nevertheless be deferred in order to allow the Member States first to set up the necessary machinery for the registration of groupings in their territories and the disclosure of certain matters relating to groupings; whereas, with effect from the date of implementation of this Regulation, groupings set up may operate without territorial restrictions,

 

 

 

HAS ADOPTED THIS REGULATION:

 

 

 

Article 1

 

1.    European Economic Interest Groupings shall be formed upon the terms, in the manner and with the effects laid down in this Regulation.

 

Accordingly, parties intending to form a grouping must conclude a contract and have the registration provided for in Article 6 carried out.

 

2.    A grouping so formed shall, from the date of its registration as provided for in Article 6, have the capacity, in its own name, to have rights and obligations of all kinds, to make contracts or accomplish other legal acts, and to sue and be sued.

 

3.    The Member States shall determine whether or not groupings registered at their registries, pursuant to Article 6, have legal personality.

 

Article 2

 

1.    Subject to the provisions of this Regulation, the law applicable, on the one hand, to the contract for the formation of a grouping, except as regards matters relating to the status or capacity of natural persons and to the capacity of legal persons and, on the other hand, to the internal organization of a grouping shall be the internal law of the State in which the official address is situated, as laid down in the contract for the formation of the grouping.

 

2.    Where a State comprises several territorial units, each of which has its own rules of law applicable to the matters referred to in paragraph 1, each territorial unit shall be considered as a State for the purposes of identifying the law applicable under this Article.

 

Article 3

 

1.    The purpose of a grouping shall be to facilitate or develop the economic activities of its members and to improve or increase the results of those activities; its purpose is not to make profits for itself. Its activity shall be related to the economic activities of its members and must not be more than ancillary to those activities.


2.    Consequently, a grouping may not:

 

(a)   exercise, directly or indirectly, a power of management or supervision over its members' own activities or over the activities of another undertaking, in particular in the fields of personnel, finance and investment;

 

(b)   directly or indirectly, on any basis whatsoever, hold shares of any kind in a member undertaking; the holding of shares in another undertaking shall be possible only in so far as it is necessary for the achievement of the grouping's objects and if it is done on its members' behalf;

 

(c)   employ more than 500 persons;

 

(d)   be used by a company to make a loan to a director of a company, or any person connected with him, when the making of such loans is restricted or controlled under the Member States' laws governing companies. Nor must a grouping be used for the transfer of any property between a company and a director, or any person connected with him, except to the extent allowed by the Member States' laws governing companies. For the purposes of this provision the making of a loan includes entering into any transaction or arrangement of similar effect, and property includes moveable and immoveable property;

 

(e)   be a member of another European Economic Interest Grouping.

 

Article 4

 

1.    Only the following may be members of a grouping:

 

(a)   companies or firms within the meaning of the second paragraph of Article 58 of the Treaty and other legal bodies governed by public or private law, which have been formed in accordance with the law of a Member State and which have their registered or statutory office and central adminsitration in the Community; where, under the law of a Member State, a company, firm or other legal body is not obliged to have a registered or statutory office, it shall be sufficient for such a company, firm or other legal body to have its central administration in the Community;

 

(b)   natural persons who carry on any industrial, commercial, craft or agricultural activity or who provide professional or other services in the Community.

 

2.    A grouping must comprise at least:

 

(a)   two companies, firms or other legal bodies, within the meaning of paragraph 1, which have their central administrations in different Member States, or

 

(b)   two natural persons, within the meaning of paragraph 1, who carry on their principal activities in different Member States, or

 

(c)   a company, firm or other legal body within the meaning of paragraph 1 and a natural person, of which the first has its central administration in one Member State and the second carries on his principal activity in another Member State.

 

3.    A Member State may provide that groupings registered at its registries in accordance with Article 6 may have no more than 20 members. For this purpose, that Member State may provide that, in accordance with its laws, each member of a legal body formed under its laws, other than a registered company, shall be treated as a separate member of a grouping.

 

4.    Any Member State may, on grounds of that State's public interest, prohibit or restrict participation in groupings by certain classes of natural persons, companies, firms, or other legal bodies.

 

Article 5

 

A contract for the formation of a grouping shall include at least:

 

(a)   the name of the grouping preceded or followed either by the words 'European Economic Interest Grouping' or by the initials 'EEIG', unless those words or initials already form part of the name;

 

(b)   the official address of the grouping;

 

(c)   the objects for which the grouping is formed;

 

(d)   the name, business name, legal form, permanent address or registered office, and the number and place of registration, if any, of each member of the grouping;

 

(e)   the duration of the grouping, except where this is indefinite.

 

Article 6

 

A grouping shall be registered in the State in which it has its official address, at the registry designated pursuant to Article 39 (1).

 

Article 7

 

A contract for the formation of a grouping shall be filed at the registry referred to in Article 6.

 

The following documents and particulars must also be filed at that registry:

 

(a)   any amendment to the contract for the formation of a grouping, including any change in the composition of a grouping;

 

(b)   notice of the setting up or closure of any establishment of the grouping;

 

(c)   any judicial decision establishing or declaring the nullity of a grouping, in accordance with Article 15;

 

(d)   notice of the appointment of the manager or managers of a grouping, their names and any other identification particulars required by the law of the Member State in which the register is kept, notification that they may act alone or must act jointly, and the termination of any manager's appointment;

 

(e)   notice of a member's assignment of his participation in a grouping or a proportion thereof, in accordance with Article 22 (1);

 

(f)    any decision by members ordering or establishing the winding up of a grouping, in accordance with Article 31, or any judicial decision ordering such winding up, in accordance with Articles 31 or 32;

 

(g)   notice of the appointment of the liquidator or liquidators of a grouping, as referred to in Article 35, their names and any other identification particulars required by the law of the Member State in which the register is kept, and the termination of any liquidator's appointment;

 

(h)   notice of the conclusion of a grouping's liquidation, as referred to in Article 35 (2);

 

(i)    any proposal to transfer the official address, as referred to in Article 14 (1);

 

(j)    any clause exempting a new member from the payment of debts and other liabilities which originated prior to his admission, in accordance with Article 26 (2).

 

Article 8

 

The following must be published, as laid down in Article 39, in the gazette referred to in paragraph 1 of that Article:

 

(a)   the particulars which must be included in the contract for the formation of a grouping, pursuant to Article 5, and any amendments thereto;

 

(b)   the number, date and place of registration as well as notice of the termination of that registration;

 

(c)   the documents and particulars referred to in Article 7 (b) to (j).

 

The particulars referred to in (a) and (b) must be published in full. The documents and particulars referred to in (c) may be published either in full or in extract form or by means of a reference to their filing at the registry, in accordance with the national legislation applicable.

 

Article 9

 

1.    The documents and particulars which must be published pursuant to this Regulation may be relied on by a grouping as against third parties under the conditions laid down by the national law applicable pursuant to Article 3 (5) and (7) of Council Directive 68/151/EEC of 9 March 1968 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community[4].

 

2.    If activities have been carried on on behalf of a grouping before its registration in accordance with Article 6 and if the grouping does not, after its registration, assume the obligations arising out of such activities, the natural persons, companies, firms or other legal bodies which carried on those activities shall bear unlimited joint and several liability for them.

 

Article 10

 

Any grouping establishment situated in a Member State other than that in which the official address is situated shall be registered in that State. For the purpose of such registration, a grouping shall file, at the appropriate registry in that Member State, copies of the documents which must be filed at the registry of the Member State in which the official address is situated, together, if necessary, with a translation which conforms with the practice of the registry where the establishment is registered.

 

Article 11

 

Notice that a grouping has been formed or that the liquidation of a grouping has been concluded stating the number, date and place of registration and the date, place and title of publication, shall be given in the Official Journal of the European Communities after it has been published in the gazette referred to in Article 39 (1).

 

Article 12

 

The official address referred to in the contract for the formation of a grouping must be situated in the Community.

 

The official address must be fixed either:

 

(a)   where the grouping has its central administration, or

 

(b)   where one of the members of the grouping has its central administration or, in the case of a natural person, his principal activity, provided that the grouping carries on an activity there.

 

Article 13

 

The official address of a grouping may be transferred within the Community.

 

When such a transfer does not result in a change in the law applicable pursuant to Article 2, the decision to transfer shall be taken in accordance with the conditions laid down in the contract for the formation of the grouping.

 

Article 14

 

1.    When the transfer of the official address results in a change in the law applicable pursuant to Article 2, a transfer proposal must be drawn up, filed and published in accordance with the conditions laid down in Articles 7 and 8.

 

No decision to transfer may be taken for two months after publication of the proposal. Any such decision must be taken by the members of the grouping unanimously. The transfer shall take effect on the date on which the grouping is registered, in accordance with Article 6, at the registry for the new official address. That registration may not be effected until evidence has been produced that the proposal to transfer the official address has been published.

 

2.    The termination of a grouping's registration at the registry for its old official address may not be effected until evidence has been produced that the grouping has been registered at the registry for its new official address.

 

3.    Upon publication of a grouping's new registration the new official address may be relied on as against third parties in accordance with the conditions referred to in Article 9 (1); however, as long as the termination of the grouping's registration at the registry for the old official address has not been published, third parties may continue to rely on the old official address unless the grouping proves that such third parties were aware of the new official address.

 

4.    The laws of a Member State may provide that, as regards groupings registered under Article 6 in that Member State, the transfer of an official address which would result in a change of the law applicable shall not take effect if, within the two-month period referred to in paragraph 1, a competent authority in that Member State opposes it. Such opposition may be based only on grounds of public interest. Review by a judicial authority must be possible.

 

Article 15

 

1.    Where the law applicable to a grouping by virtue of Article 2 provides for the nullity of that grouping, such nullity must be established or declared by judicial decision. However, the court to which the matter is referred must, where it is possible for the affairs of the grouping to be put in order, allow time to permit that to be done.

 

2.    The nullity of a grouping shall entail its liquidation in accordance with the conditions laid down in Article 35.

 

3.    A decision establishing or declaring the nullity of a grouping may be relied on as against third parties in accordance with the conditions laid down in Article 9 (1).

 

Such a decision shall not of itself affect the validity of liabilities, owed by or to a grouping, which originated before it could be relied on as against third parties in accordance with the conditions laid down in the previous subparagraph.

 

Article 16

 

1.    The organs of a grouping shall be the members acting collectively and the manager or managers.

 

A contract for the formation of a grouping may provide for other organs; if it does it shall determine their powers.

 

2.    The members of a grouping, acting as a body, may take any decision for the purpose of achieving the objects of the grouping.

 

Article 17

 

1.    Each member shall have one vote. The contract for the formation of a grouping may, however, give more than one vote to certain members, provided that no one member holds a majority of the votes.

 

2.    A unanimous decision by the members shall be required to:

 

(a)   alter the objects of a grouping;

 

(b)   alter the number of votes allotted to each member;

 

(c)   alter the conditions for the taking of decisions;

 

(d)   extend the duration of a grouping beyond any period fixed in the contract for the formation of the grouping;

 

(e)   alter the contribution by every member or by some members to the grouping's financing;

 

(f)    alter any other obligation of a member, unless otherwise provided by the contract for the formation of the grouping;

 

(g)   make any alteration to the contract for the formation of the grouping not covered by this paragraph, unless otherwise provided by that contract.

 

3.    Except where this Regulation provides that decisions must be taken unanimously, the contract for the formation of a grouping may prescribe the conditions for a quorum and for a majority, in accordance with which the decisions, or some of them, shall be taken. Unless otherwise provided for by the contract, decisions shall be taken unanimously.

 

4.    On the initiative of a manager or at the request of a member, the manager or managers must arrange for the members to be consulted so that the latter can take a decision.

 

Article 18

 

Each member shall be entitled to obtain information from the manager or managers concerning the grouping's business and to inspect the grouping's books and business records.

 

Article 19

 

1.    A grouping shall be managed by one or more natural persons appointed in the contract for the formation of the grouping or by decision of the members.

 

No person may be a manager of a grouping if:

 

-      by virtue of the law applicable to him, or

 

-      by virtue of the internal law of the State in which the grouping has its official address, or

 

-      following a judicial or administrative decision made or recognized in a Member State

 

he may not belong to the administrative or management body of a company, may not manage an undertaking or may not act as manager of a European Economic Interest Grouping.

 

2.    A Member State may, in the case of groupings registered at their registries pursuant to Article 6, provide that legal persons may be managers on condition that such legal persons designate one or more natural persons, whose particulars shall be the subject of the filing provisions of Article 7 (d) to represent them.

 

If a Member State exercises this option, it must provide that the representative or representatives shall be liable as if they were themselves managers of the groupings concerned.

 

The restrictions imposed in paragraph 1 shall also apply to those representatives.

 

3.    The contract for the formation of a grouping or, failing that, a unanimous decision by the members shall determine the conditions for the appointment and removal of the manager or managers and shall lay down their powers.

 

Article 20

 

1.    Only the manager or, where there are two or more, each of the managers shall represent a grouping in respect of dealings with third parties.

 

Each of the managers shall bind the grouping as regards third parties when he acts on behalf of the grouping, even where his acts do not fall within the objects of the grouping, unless the grouping proves that the third party knew or could not, under the circumstances, have been unaware that the act fell outside the objects of the grouping; publication of the particulars referred to in Article 5 (c) shall not of itself be proof thereof.

 

No limitation on the powers of the manager or managers, whether deriving from the contract for the formation of the grouping or from a decision by the members, may be relied on as against thrid parties even if it is published.

 

2.    The contract for the formation of the grouping may provide that the grouping shall be validly bound only by two or more managers acting jointly. Such a clause may be relied on as against third parties in accordance with the conditions referred to in Article 9 (1) only if it is published in accordance with Article 8.

 

Article 21

 

1.    The profits resulting from a grouping's activities shall be deemed to be the profits of the members and shall be apportioned among them in the proportions laid down in the contract for the formation of the grouping or, in the absence of any such provision, in equal shares.

 

2.    The members of a grouping shall contribute to the payment of the amount by which expenditure exceeds income in the proportions laid down in the contract for the formation of the grouping or, in the absence of any such provision, in equal shares.

 

Article 22

 

1.    Any member of a grouping may assign his participation in the grouping, or a proportion thereof, either to another member or to a third party; the assignment shall not take effect without the unanimous authorization of the other members.

 

2.    A member of a grouping may use his participation in the grouping as security only after the other members have given their unanimous authorization, unless otherwise laid down in the contract for the formation of the grouping. The holder of the security may not at any time become a member of the grouping by virtue of that security.

 

Article 23

 

No grouping may invite investment by the public.

 

Article 24

 

1.    The members of a grouping shall have unlimited joint and several liability for its debts and other liabilities of whatever nature. National law shall determine the consequences of such liablity.

 

2.    Creditors may not proceed against a member for payment in respect of debts and other liabilities, in accordance with the conditions laid down in paragraph 1, before the liquidation of a grouping is concluded, unless they have first requested the grouping to pay and payment has not been made within an appropriate period.

 

Article 25

 

Letters, order forms and similar documents must indicate legibly:

 

(a)   the name of the grouping preceded or followed either by the words 'European Economic Interest Grouping' or by the initials 'EEIG', unless those words or initials already occur in the name;

 

(b)   the location of the registry referred to in Article 6, in which the grouping is registered, together with the number of the grouping's entry at the registry;

 

(c)   the grouping's official address;

 

(d)   where applicable, that the managers must act jointly;

 

(e)   where applicable, that the grouping is in liquidation, pursuant to Articles 15, 31, 32 or 36.

 

Every establishment of a grouping, when registered in accordance with Article 10, must give the above particulars, together with those relating to its own registration, on the documents referred to in the first paragraph of this Article uttered by it.

 

Article 26

 

1.    A decision to admit new members shall be taken unanimously by the members of the grouping.

 

2.    Every new member shall be liable, in accordance with the conditions laid down in Article 24, for the grouping's debts and other liabilities, including those arising out of the grouping's activities before his admission.

 

He may, however, be exempted by a clause in the contract for the formation of the grouping or in the instrument of admission from the payment of debts and other liabilities which originated before his admission. Such a clause may be relied on as against third parties, under the conditions referred to in Article 9 (1), only if it is published in accordance with Article 8.

 

Article 27

 

1.    A member of a grouping may withdraw in accordance with the conditions laid down in the contract for the formation of a grouping or, in the absence of such conditions, with the unanimous agreement of the other members.

 

Any member of a grouping may, in addition, withdraw on just and proper grounds.

 

2.    Any member of a grouping may be expelled for the reasons listed in the contract for the formation of the grouping and, in any case, if he seriously fails in his obligations or if he causes or threatens to cause serious disruption in the operation of the grouping.

 

Such expulsion may occur only by the decision of a court to which joint application has been made by a majority of the other members, unless otherwise provided by the contract for the formation of a grouping.

 

Article 28

 

1.    A member of a grouping shall cease to belong to it on death or when he no longer complies with the conditions laid down in Article 4 (1).

 

In addition, a Member State may provide, for the purposes of its liquidation, winding up, insolvency or cessation of payments laws, that a member shall cease to be a member of any grouping at the moment determined by those laws.

 

2.    In the event of the death of a natural person who is a member of a grouping, no person may become a member in his place except under the conditions laid down in the contract for the formation of the grouping or, failing that, with the unanimous agreement of the remaining members.

 

Article 29

 

As soon as a member ceases to belong to a grouping, the manager or managers must inform the other members of that fact; they must also take the steps required as listed in Articles 7 and 8. In addition, any person concerned may take those steps.

 

Article 30

 

Except where the contract for the formation of a grouping provides otherwise and without prejudice to the rights acquired by a person under Articles 22 (1) or 28 (2), a grouping shall continue to exist for the remaining members after a member has ceased to belong to it, in accordance with the conditions laid down in the contract for the formation of the grouping or determined by unanimous decision of the members in question.


Article 31

 

1.    A grouping may be wound up by a decision of its members ordering its winding up. Such a decision shall be taken unanimously, unless otherwise laid down in the contract for the formation of the grouping.

 

 

 

2.    A grouping must be wound up by a decision of its members:

 

(a)   noting the expiry of the period fixed in the contract for the formation of the grouping or the existence of any other cause for winding up provided for in the contract, or

 

(b)   noting the accomplishment of the grouping's purpose or the impossibility of pursuing it further.

 

Where, three months after one of the situation referred to in the first subparagraph has occurred, a members' decision establishing the winding up of the grouping has not been taken, any member may petition the court to order winding up.

 

3.    A grouping must also be wound up by a decision of its members or of the remaining member when the conditions laid down in Article 4 (2) are no longer fulfilled.

 

4.    After a grouping has been wound up by decision of its members, the manager or managers must take the steps required as listed in Articles 7 and 8. In addition, any person concerned may take those steps.

 

Article 32

 

1.    On application by any person concerned or by a competent authority, in the event of the infringement of Articles 3, 12 or 31 (3), the court must order a grouping to be wound up, unless its affairs can be and are put in order before the court has delivered a substantive ruling.

 

2.    On applications by a member, the court may order a grouping to be wound up on just and proper grounds.

 

3.    A Member State may provide that the court may, on application by a competent authority, order the winding up of a grouping which has its official address in the State to which that authority belongs, wherever the grouping acts in contravention of that State's public interest, if the law of that State provides for such a possibility in respect of registered companies or other legal bodies subject to it.

 

Article 33

 

When a member ceases to belong to a grouping for any reason other than the assignment of his rights in accordance with the conditions laid down in Article 22 (1), the value of his rights and obligations shall be determined taking into account the assets and liabilities of the grouping as they stand when he ceases to belong to it.

 

The value of the rights and obligations of a departing member may not be fixed in advance.

 

Article 34

 

Without prejudice to Article 37 (1), any member who ceases to belong to a grouping shall remain answerable, in accordance with the conditions laid down in Article 24, for the debts and other liabilities arising out of the grouping's activities before he ceased to be a member.

 

Article 35

 

1.    The winding up of a grouping shall entail its liquidation.

 

2.    The liquidation of a grouping and the conclusion of its liquidation shall be governed by national law.

 

3.    A grouping shall retain its capacity, within the meaning of Article 1 (2), until its liquidation is concluded.

 

4.    The liquidator or liquidators shall take the steps required as listed in Articles 7 and 8.

 

Article 36

 

Groupings shall be subject to national laws governing insolvency and cessation of payments. The commencement of proceedings against a grouping on grounds of its insolvency or cessation of payments shall not by itself cause the commencement of such proceedings against its members.

 

Article 37

 

1.    A period of limitation of five years after the publication, pursuant to Article 8, of notice of a member's ceasing to belong to a grouping shall be substituted for any longer period which may be laid down by the relevant national law for actions against that member in connection with debts and other liabilities arising out of the grouping's activities before he ceased to be a member.

 

2.    A period of limitation of five years after the publication, pursuant to Article 8, of notice of the conclusion of the liquidation of a grouping shall be substituted for any longer period which may be laid down by the relevant national law for actions against a member of the grouping in connection with debts and other liabilities arising out of the grouping's activities.

 

Article 38

 

Where a grouping carries on any activity in a Member State in contravention of that State's public interest, a competent authority of that State may prohibit that activity. Review of that competent authority's decision by a judicial authority shall be possible.

 

Article 39

 

1.    The Member States shall designate the registry or registries responsible for effecting the registration referred to in Articles 6 and 10 and shall lay down the rules governing registration. They shall prescribe the conditions under which the documents referred to in Articles 7 and 10 shall be filed. They shall ensure that the documents and particulars referred to in Article 8 are published in the appropriate official gazette of the Member State in which the grouping has its official address, and may prescribe the manner of publication of the documents and particulars referred to in Article 8 (c).

 

The Member States shall also ensure that anyone may, at the appropriate registry pursuant to Article 6 or, where appropriate, Article 10, inspect the documents referred to in Article 7 and obtain, even by post, full or partial copies thereof.

 

The Member States may provide for the payment of fees in connection with the operations referred to in the preceding subparagraphs; those fees may not, however, exceed the administrative cost thereof.

 

2.    The Member States shall ensure that the information to be published in the Official Journal of the European Communities pursuant to Article 11 is forwarded to the Office for Official Publications of the European Communities within one month of its publication in the official gazette referred to in paragraph 1.

 

3.    The Member States shall provide for appropriate penalties in the event of failure to comply with the provisions of Articles 7, 8 and 10 on disclosure and in the event of failure to comply with Article 25.

 

Article 40

 

The profits or losses resulting from the activities of a grouping shall be taxable only in the hands of its members.

 

Article 41

 

1.    The Member States shall take the measures requried by virtue of Article 39 before 1 July 1989. They shall immediately communicate them to the Commission.

 

2.    For information purposes, the Member States shall inform the Commission of the classes of natural persons, companies, firms and other legal bodies which they prohibit from participating in groupings pursuant to Article 4 (4). The Commission shall inform the other Member States.

 

Article 42

 

1.    Upon the adoption of this Regulation, a Contact Committee shall be set up under the auspices of the Commission. Its function shall be:

 

(a)   to facilitate, without prejudice to Articles 169 and 170 of the Treaty, application of this Regulation through regular consultation dealing in particular with practical problems arising in connection with its application;

 

(b)   to advise the Commission, if necessary, on additions or amendments to this Regulation.

 

2.    The Contact Committee shall be composed of representatives of the Member States and representatives of the Commission. The chairman shall be a representative of the Commission. The Commission shall provide the secretariat.

 

3.    The Contact Committee shall be convened by its chairman either on his own initiative or at the request of one of its members.

 

Article 43

 

This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities.

 

It shall apply from 1 July 1989, with the exception of Articles 39, 41 and 42 which shall apply as from the entry into force of the Regulation.

 

This Regulation shall be binding in its entirety and directly applicable in all Member States.

 

Done at Brussels, 25 July 1985.

 

For the Council

 

The President

 

J. POOS

 

 

 



[1]       OJ No C 14, 15. 2. 1974, p. 30 and OJ No C 103, 28. 4. 1978, p. 4.

[2]       OJ No C 163, 11. 7. 1977, p. 17.

[3]       OJ No C 108, 15. 5. 1975, p. 46.

[4]       OJ No L 65, 14. 3. 1968, p. 8.

 

 

Avis juridique important

 

|

 

Council Regulation (EC) No 2157/2001

 

of 8 October 2001

 

on the Statute for a European company (SE)

 

 

 

THE COUNCIL OF THE EUROPEAN UNION,

 

Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof,

 

Having regard to the proposal from the Commission[1],

 

Having regard to the opinion of the European Parliament[2],

 

Having regard to the opinion of the Economic and Social Committee[3],

 

Whereas:

 

(1)   The completion of the internal market and the improvement it brings about in the economic and social situation throughout the Community mean not only that barriers to trade must be removed, but also that the structures of production must be adapted to the Community dimension. For that purpose it is essential that companies the business of which is not limited to satisfying purely local needs should be able to plan and carry out the reorganisation of their business on a Community scale.

 

(2)   Such reorganisation presupposes that existing companies from different Member States are given the option of combining their potential by means of mergers. Such operations can be carried out only with due regard to the rules of competition laid down in the Treaty.

 

(3)   Restructuring and cooperation operations involving companies from different Member States give rise to legal and psychological difficulties and tax problems. The approximation of Member States' company law by means of Directives based on Article 44 of the Treaty can overcome some of those difficulties. Such approximation does not, however, release companies governed by different legal systems from the obligation to choose a form of company governed by a particular national law.

 

(4)   The legal framework within which business must be carried on in the Community is still based largely on national laws and therefore no longer corresponds to the economic framework within which it must develop if the objectives set out in Article 18 of the Treaty are to be achieved. That situation forms a considerable obstacle to the creation of groups of companies from different Member States.

 

(5)   Member States are obliged to ensure that the provisions applicable to European companies under this Regulation do not result either in discrimination arising out of unjustified different treatment of European companies compared with public limited-liability companies or in disproportionate restrictions on the formation of a European company or on the transfer of its registered office.

 

(6)   It is essential to ensure as far as possible that the economic unit and the legal unit of business in the Community coincide. For that purpose, provision should be made for the creation, side by side with companies governed by a particular national law, of companies formed and carrying on business under the law created by a Community Regulation directly applicable in all Member States.

 

(7)   The provisions of such a Regulation will permit the creation and management of companies with a European dimension, free from the obstacles arising from the disparity and the limited territorial application of national company law.

 

(8)   The Statute for a European public limited-liability company (hereafter referred to as "SE") is among the measures to be adopted by the Council before 1992 listed in the Commission's White Paper on completing the internal market, approved by the European Council that met in Milan in June 1985. The European Council that met in Brussels in 1987 expressed the wish to see such a Statute created swiftly.

 

(9)   Since the Commission's submission in 1970 of a proposal for a Regulation on the Statute for a European public limited-liability company, amended in 1975, work on the approximation of national company law has made substantial progress, so that on those points where the functioning of an SE does not need uniform Community rules reference may be made to the law governing public limited-liability companies in the Member State where it has its registered office.

 

(10) Without prejudice to any economic needs that may arise in the future, if the essential objective of legal rules governing SEs is to be attained, it must be possible at least to create such a company as a means both of enabling companies from different Member States to merge or to create a holding company and of enabling companies and other legal persons carrying on economic activities and governed by the laws of different Member States to form joint subsidiaries.

 

(11) In the same context it should be possible for a public limited-liability company with a registered office and head office within the Community to transform itself into an SE without going into liquidation, provided it has a subsidiary in a Member State other than that of its registered office.

 

(12) National provisions applying to public limited-liability companies that offer their securities to the public and to securities transactions should also apply where an SE is formed by means of an offer of securities to the public and to SEs wishing to utilise such financial instruments.

 

(13) The SE itself must take the form of a company with share capital, that being the form most suited, in terms of both financing and management, to the needs of a company carrying on business on a European scale. In order to ensure that such companies are of reasonable size, a minimum amount of capital should be set so that they have sufficient assets without making it difficult for small and medium-sized undertakings to form SEs.

 

(14) An SE must be efficiently managed and properly supervised. It must be borne in mind that there are at present in the Community two different systems for the administration of public limited-liability companies. Although an SE should be allowed to choose between the two systems, the respective responsibilities of those responsible for management and those responsible for supervision should be clearly defined.

 

(15) Under the rules and general principles of private international law, where one undertaking controls another governed by a different legal system, its ensuing rights and obligations as regards the protection of minority shareholders and third parties are governed by the law governing the controlled undertaking, without prejudice to the obligations imposed on the controlling undertaking by its own law, for example the requirement to prepare consolidated accounts.

 

(16) Without prejudice to the consequences of any subsequent coordination of the laws of the Member States, specific rules for SEs are not at present required in this field. The rules and general principles of private international law should therefore be applied both where an SE exercises control and where it is the controlled company.

 

(17) The rule thus applicable where an SE is controlled by another undertaking should be specified, and for this purpose reference should be made to the law governing public limited-liability companies in the Member State in which the SE has its registered office.

 

(18) Each Member State must be required to apply the sanctions applicable to public limited-liability companies governed by its law in respect of infringements of this Regulation.

 

(19) The rules on the involvement of employees in the European company are laid down in Directive 2001/86/EC[4], and those provisions thus form an indissociable complement to this Regulation and must be applied concomitantly.

 

(20) This Regulation does not cover other areas of law such as taxation, competition, intellectual property or insolvency. The provisions of the Member States' law and of Community law are therefore applicable in the above areas and in other areas not covered by this Regulation.

 

(21) Directive 2001/86/EC is designed to ensure that employees have a right of involvement in issues and decisions affecting the life of their SE. Other social and labour legislation questions, in particular the right of employees to information and consultation as regulated in the Member States, are governed by the national provisions applicable, under the same conditions, to public limited-liability companies.

 

(22) The entry into force of this Regulation must be deferred so that each Member State may incorporate into its national law the provisions of Directive 2001/86/EC and set up in advance the necessary machinery for the formation and operation of SEs with registered offices within its territory, so that the Regulation and the Directive may be applied concomitantly.

 

(23) A company the head office of which is not in the Community should be allowed to participate in the formation of an SE provided that company is formed under the law of a Member State, has its registered office in that Member State and has a real and continuous link with a Member State's economy according to the principles established in the 1962 General Programme for the abolition of restrictions on freedom of establishment. Such a link exists in particular if a company has an establishment in that Member State and conducts operations therefrom.

 

(24) The SE should be enabled to transfer its registered office to another Member State. Adequate protection of the interests of minority shareholders who oppose the transfer, of creditors and of holders of other rights should be proportionate. Such transfer should not affect the rights originating before the transfer.

 

(25) This Regulation is without prejudice to any provision which may be inserted in the 1968 Brussels Convention or in any text adopted by Member States or by the Council to replace such Convention, relating to the rules of jurisdiction applicable in the case of transfer of the registered offices of a public limited-liability company from one Member State to another.

 

(26) Activities by financial institutions are regulated by specific directives and the national law implementing those directives and additional national rules regulating those activities apply in full to an SE.

 

(27) In view of the specific Community character of an SE, the "real seat" arrangement adopted by this Regulation in respect of SEs is without prejudice to Member States' laws and does not pre-empt any choices to be made for other Community texts on company law.

 

(28) The Treaty does not provide, for the adoption of this Regulation, powers of action other than those of Article 308 thereof.

 

(29) Since the objectives of the intended action, as outlined above, cannot be adequately attained by the Member States in as much as a European public limited-liability company is being established at European level and can therefore, because of the scale and impact of such company, be better attained at Community level, the Community may take measures in accordance with the principle of subsidiarity enshrined in Article 5 of the Treaty. In accordance with the principle of proportionality as set out in the said Article, this Regulation does not go beyond what is necessary to attain these objectives,

 

HAS ADOPTED THIS REGULATION:

 

TITLE I

 

GENERAL PROVISIONS

 

Article 1

 

1.     A company may be set up within the territory of the Community in the form of a European public limited-liability company (Societas Europaea or SE) on the conditions and in the manner laid down in this Regulation.

 

2.     The capital of an SE shall be divided into shares. No shareholder shall be liable for more than the amount he has subscribed.

 

3.     An SE shall have legal personality.

 

4.     Employee involvement in an SE shall be governed by the provisions of Directive 2001/86/EC.

 

Article 2

 

1.     Public limited-liability companies such as referred to in Annex I, formed under the law of a Member State, with registered offices and head offices within the Community may form an SE by means of a merger provided that at least two of them are governed by the law of different Member States.

 

2.     Public and private limited-liability companies such as referred to in Annex II, formed under the law of a Member State, with registered offices and head offices within the Community may promote the formation of a holding SE provided that each of at least two of them:

 

(a)   is governed by the law of a different Member State, or

 

(b)   has for at least two years had a subsidiary company governed by the law of another Member State or a branch situated in another Member State.

 

3.     Companies and firms within the meaning of the second paragraph of Article 48 of the Treaty and other legal bodies governed by public or private law, formed under the law of a Member State, with registered offices and head offices within the Community may form a subsidiary SE by subscribing for its shares, provided that each of at least two of them:

 

(a)   is governed by the law of a different Member State, or

 

(b)   has for at least two years had a subsidiary company governed by the law of another Member State or a branch situated in another Member State.

 

4.     A public limited-liability company, formed under the law of a Member State, which has its registered office and head office within the Community may be transformed into an SE if for at least two years it has had a subsidiary company governed by the law of another Member State.

 

5.     A Member State may provide that a company the head office of which is not in the Community may participate in the formation of an SE provided that company is formed under the law of a Member State, has its registered office in that Member State and has a real and continuous link with a Member State's economy.

 

Article 3

 

1.     For the purposes of Article 2(1), (2) and (3), an SE shall be regarded as a public limited-liability company governed by the law of the Member State in which it has its registered office.

 

2.     An SE may itself set up one or more subsidiaries in the form of SEs. The provisions of the law of the Member State in which a subsidiary SE has its registered office that require a public limited-liability company to have more than one shareholder shall not apply in the case of the subsidiary SE. The provisions of national law implementing the twelfth Council Company Law Directive (89/667/EEC) of 21 December 1989 on single-member private limited-liability companies[5] shall apply to SEs mutatis mutandis.

 

Article 4

 

1.     The capital of an SE shall be expressed in euro.

 

2.     The subscribed capital shall not be less than EUR 120000.

 

3.     The laws of a Member State requiring a greater subscribed capital for companies carrying on certain types of activity shall apply to SEs with registered offices in that Member State.

 

Article 5

 

Subject to Article 4(1) and (2), the capital of an SE, its maintenance and changes thereto, together with its shares, bonds and other similar securities shall be governed by the provisions which would apply to a public limited-liability company with a registered office in the Member State in which the SE is registered.

 

Article 6

 

For the purposes of this Regulation, "the statutes of the SE" shall mean both the instrument of incorporation and, where they are the subject of a separate document, the statutes of the SE.

 

Article 7

 

The registered office of an SE shall be located within the Community, in the same Member State as its head office. A Member State may in addition impose on SEs registered in its territory the obligation of locating their head office and their registered office in the same place.

 

Article 8

 

1.     The registered office of an SE may be transferred to another Member State in accordance with paragraphs 2 to 13. Such a transfer shall not result in the winding up of the SE or in the creation of a new legal person.

 

2.     The management or administrative organ shall draw up a transfer proposal and publicise it in accordance with Article 13, without prejudice to any additional forms of publication provided for by the Member State of the registered office. That proposal shall state the current name, registered office and number of the SE and shall cover:

 

(a)   the proposed registered office of the SE;

 

(b)   the proposed statutes of the SE including, where appropriate, its new name;

 

(c)   any implication the transfer may have on employees' involvement;

 

(d)   the proposed transfer timetable;

 

(e)   any rights provided for the protection of shareholders and/or creditors.

 

3.     The management or administrative organ shall draw up a report explaining and justifying the legal and economic aspects of the transfer and explaining the implications of the transfer for shareholders, creditors and employees.

 

4.     An SE's shareholders and creditors shall be entitled, at least one month before the general meeting called upon to decide on the transfer, to examine at the SE's registered office the transfer proposal and the report drawn up pursuant to paragraph 3 and, on request, to obtain copies of those documents free of charge.

 

5.     A Member State may, in the case of SEs registered within its territory, adopt provisions designed to ensure appropriate protection for minority shareholders who oppose a transfer.

 

6.     No decision to transfer may be taken for two months after publication of the proposal. Such a decision shall be taken as laid down in Article 59.

 

7.     Before the competent authority issues the certificate mentioned in paragraph 8, the SE shall satisfy it that, in respect of any liabilities arising prior to the publication of the transfer proposal, the interests of creditors and holders of other rights in respect of the SE (including those of public bodies) have been adequately protected in accordance with requirements laid down by the Member State where the SE has its registered office prior to the transfer.

 

A Member State may extend the application of the first subparagraph to liabilities that arise (or may arise) prior to the transfer.

 

The first and second subparagraphs shall be without prejudice to the application to SEs of the national legislation of Member States concerning the satisfaction or securing of payments to public bodies.

 

8.     In the Member State in which an SE has its registered office the court, notary or other competent authority shall issue a certificate attesting to the completion of the acts and formalities to be accomplished before the transfer.

 

9.     The new registration may not be effected until the certificate referred to in paragraph 8 has been submitted, and evidence produced that the formalities required for registration in the country of the new registered office have been completed.

 

10.   The transfer of an SE's registered office and the consequent amendment of its statutes shall take effect on the date on which the SE is registered, in accordance with Article 12, in the register for its new registered office.

 

11.   When the SE's new registration has been effected, the registry for its new registration shall notify the registry for its old registration. Deletion of the old registration shall be effected on receipt of that notification, but not before.

 

12.   The new registration and the deletion of the old registration shall be publicised in the Member States concerned in accordance with Article 13.

 

13.   On publication of an SE's new registration, the new registered office may be relied on as against third parties. However, as long as the deletion of the SE's registration from the register for its previous registered office has not been publicised, third parties may continue to rely on the previous registered office unless the SE proves that such third parties were aware of the new registered office.

 

14.   The laws of a Member State may provide that, as regards SEs registered in that Member State, the transfer of a registered office which would result in a change of the law applicable shall not take effect if any of that Member State's competent authorities opposes it within the two-month period referred to in paragraph 6. Such opposition may be based only on grounds of public interest.

 

Where an SE is supervised by a national financial supervisory authority according to Community directives the right to oppose the change of registered office applies to this authority as well.

 

Review by a judicial authority shall be possible.

 

15.   An SE may not transfer its registered office if proceedings for winding up, liquidation, insolvency or suspension of payments or other similar proceedings have been brought against it.

 

16.   An SE which has transferred its registered office to another Member State shall be considered, in respect of any cause of action arising prior to the transfer as determined in paragraph 10, as having its registered office in the Member States where the SE was registered prior to the transfer, even if the SE is sued after the transfer.

 

Article 9

 

1.     An SE shall be governed:

 

(a)   by this Regulation,

 

(b)   where expressly authorised by this Regulation, by the provisions of its statutes

 

or

 

(c)   in the case of matters not regulated by this Regulation or, where matters are partly regulated by it, of those aspects not covered by it, by:

 

(i)    the provisions of laws adopted by Member States in implementation of Community measures relating specifically to SEs;

 

(ii)    the provisions of Member States' laws which would apply to a public limited-liability company formed in accordance with the law of the Member State in which the SE has its registered office;

 

(iii)   the provisions of its statutes, in the same way as for a public limited-liability company formed in accordance with the law of the Member State in which the SE has its registered office.

 

2.     The provisions of laws adopted by Member States specifically for the SE must be in accordance with Directives applicable to public limited-liability companies referred to in Annex I.

 

3.     If the nature of the business carried out by an SE is regulated by specific provisions of national laws, those laws shall apply in full to the SE.

 

Article 10

 

Subject to this Regulation, an SE shall be treated in every Member State as if it were a public limited-liability company formed in accordance with the law of the Member State in which it has its registered office.

 

Article 11

 

1.     The name of an SE shall be preceded or followed by the abbreviation SE.

 

2.     Only SEs may include the abbreviation SE in their name.

 

3.     Nevertheless, companies, firms and other legal entities registered in a Member State before the date of entry into force of this Regulation in the names of which the abbreviation SE appears shall not be required to alter their names.

 

Article 12

 

1.     Every SE shall be registered in the Member State in which it has its registered office in a register designated by the law of that Member State in accordance with Article 3 of the first Council Directive (68/151/EEC) of 9 March 1968 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community[6].

 

2.     An SE may not be registered unless an agreement on arrangements for employee involvement pursuant to Article 4 of Directive 2001/86/EC has been concluded, or a decision pursuant to Article 3(6) of the Directive has been taken, or the period for negotiations pursuant to Article 5 of the Directive has expired without an agreement having been concluded.

 

3.     In order for an SE to be registered in a Member State which has made use of the option referred to in Article 7(3) of Directive 2001/86/EC, either an agreement pursuant to Article 4 of the Directive must have been concluded on the arrangements for employee involvement, including participation, or none of the participating companies must have been governed by participation rules prior to the registration of the SE.

 

4.     The statutes of the SE must not conflict at any time with the arrangements for employee involvement which have been so determined. Where new such arrangements determined pursuant to the Directive conflict with the existing statutes, the statutes shall to the extent necessary be amended.

 

In this case, a Member State may provide that the management organ or the administrative organ of the SE shall be entitled to proceed to amend the statutes without any further decision from the general shareholders meeting.

 

Article 13

 

Publication of the documents and particulars concerning an SE which must be publicised under this Regulation shall be effected in the manner laid down in the laws of the Member State in which the SE has its registered office in accordance with Directive 68/151/EEC.

 

Article 14

 

1.     Notice of an SE's registration and of the deletion of such a registration shall be published for information purposes in the Official Journal of the European Communities after publication in accordance with Article 13. That notice shall state the name, number, date and place of registration of the SE, the date and place of publication and the title of publication, the registered office of the SE and its sector of activity.

 

2.     Where the registered office of an SE is transferred in accordance with Article 8, notice shall be published giving the information provided for in paragraph 1, together with that relating to the new registration.

 

3.     The particulars referred to in paragraph 1 shall be forwarded to the Office for Official Publications of the European Communities within one month of the publication referred to in Article 13.

 

TITLE II

 

FORMATION

 

Section 1 - General

 

Article 15

 

1.     Subject to this Regulation, the formation of an SE shall be governed by the law applicable to public limited-liability companies in the Member State in which the SE establishes its registered office.

 

2.     The registration of an SE shall be publicised in accordance with Article 13.

 

Article 16

 

1.     An SE shall acquire legal personality on the date on which it is registered in the register referred to in Article 12.

 

2.     If acts have been performed in an SE's name before its registration in accordance with Article 12 and the SE does not assume the obligations arising out of such acts after its registration, the natural persons, companies, firms or other legal entities which performed those acts shall be jointly and severally liable therefor, without limit, in the absence of agreement to the contrary.


Section 2 - Formation by merger

 

Article 17

 

1.     An SE may be formed by means of a merger in accordance with Article 2(1).

 

2.     Such a merger may be carried out in accordance with:

 

(a)   the procedure for merger by acquisition laid down in Article 3(1) of the third Council Directive (78/855/EEC) of 9 October 1978 based on Article 54(3)(g) of the Treaty concerning mergers of public limited-liability companies[7] or

 

(b)   the procedure for merger by the formation of a new company laid down in Article 4(1) of the said Directive.

 

In the case of a merger by acquisition, the acquiring company shall take the form of an SE when the merger takes place. In the case of a merger by the formation of a new company, the SE shall be the newly formed company.

 

Article 18

 

For matters not covered by this section or, where a matter is partly covered by it, for aspects not covered by it, each company involved in the formation of an SE by merger shall be governed by the provisions of the law of the Member State to which it is subject that apply to mergers of public limited-liability companies in accordance with Directive 78/855/EEC.

 

Article 19

 

The laws of a Member State may provide that a company governed by the law of that Member State may not take part in the formation of an SE by merger if any of that Member State's competent authorities opposes it before the issue of the certificate referred to in Article 25(2).

 

Such opposition may be based only on grounds of public interest. Review by a judicial authority shall be possible.

 

Article 20

 

1.     The management or administrative organs of merging companies shall draw up draft terms of merger. The draft terms of merger shall include the following particulars:

 

(a)   the name and registered office of each of the merging companies together with those proposed for the SE;

 

(b)   the share-exchange ratio and the amount of any compensation;

 

(c)   the terms for the allotment of shares in the SE;

 

(d)   the date from which the holding of shares in the SE will entitle the holders to share in profits and any special conditions affecting that entitlement;

 

(e)   the date from which the transactions of the merging companies will be treated for accounting purposes as being those of the SE;

 

(f)    the rights conferred by the SE on the holders of shares to which special rights are attached and on the holders of securities other than shares, or the measures proposed concerning them;

 

(g)   any special advantage granted to the experts who examine the draft terms of merger or to members of the administrative, management, supervisory or controlling organs of the merging companies;

 

(h)   the statutes of the SE;

 

(i)    information on the procedures by which arrangements for employee involvement are determined pursuant to Directive 2001/86/EC.

 

2.     The merging companies may include further items in the draft terms of merger.

 

Article 21

 

For each of the merging companies and subject to the additional requirements imposed by the Member State to which the company concerned is subject, the following particulars shall be published in the national gazette of that Member State:

 

(a)   the type, name and registered office of every merging company;

 

(b)   the register in which the documents referred to in Article 3(2) of Directive 68/151/EEC are filed in respect of each merging company, and the number of the entry in that register;

 

(c)   an indication of the arrangements made in accordance with Article 24 for the exercise of the rights of the creditors of the company in question and the address at which complete information on those arrangements may be obtained free of charge;

 

(d)   an indication of the arrangements made in accordance with Article 24 for the exercise of the rights of minority shareholders of the company in question and the address at which complete information on those arrangements may be obtained free of charge;

 

(e)   the name and registered office proposed for the SE.

 

Article 22

 

As an alternative to experts operating on behalf of each of the merging companies, one or more independent experts as defined in Article 10 of Directive 78/855/EEC, appointed for those purposes at the joint request of the companies by a judicial or administrative authority in the Member State of one of the merging companies or of the proposed SE, may examine the draft terms of merger and draw up a single report to all the shareholders.

 

The experts shall have the right to request from each of the merging companies any information they consider necessary to enable them to complete their function.

 

Article 23

 

1.     The general meeting of each of the merging companies shall approve the draft terms of merger.

 

2.     Employee involvement in the SE shall be decided pursuant to Directive 2001/86/EC. The general meetings of each of the merging companies may reserve the right to make registration of the SE conditional upon its express ratification of the arrangements so decided.

 

Article 24

 

1.     The law of the Member State governing each merging company shall apply as in the case of a merger of public limited-liability companies, taking into account the cross-border nature of the merger, with regard to the protection of the interests of:

 

(a)   creditors of the merging companies;

 

(b)   holders of bonds of the merging companies;

 

(c)   holders of securities, other than shares, which carry special rights in the merging companies.

 

2.     A Member State may, in the case of the merging companies governed by its law, adopt provisions designed to ensure appropriate protection for minority shareholders who have opposed the merger.

 

Article 25

 

1.     The legality of a merger shall be scrutinised, as regards the part of the procedure concerning each merging company, in accordance with the law on mergers of public limited-liability companies of the Member State to which the merging company is subject.

 

2.     In each Member State concerned the court, notary or other competent authority shall issue a certificate conclusively attesting to the completion of the pre-merger acts and formalities.

 

3.     If the law of a Member State to which a merging company is subject provides for a procedure to scrutinise and amend the share-exchange ratio, or a procedure to compensate minority shareholders, without preventing the registration of the merger, such procedures shall only apply if the other merging companies situated in Member States which do not provide for such procedure explicitly accept, when approving the draft terms of the merger in accordance with Article 23(1), the possibility for the shareholders of that merging company to have recourse to such procedure. In such cases, the court, notary or other competent authorities may issue the certificate referred to in paragraph 2 even if such a procedure has been commenced. The certificate must, however, indicate that the procedure is pending. The decision in the procedure shall be binding on the acquiring company and all its shareholders.

 

Article 26

 

1.     The legality of a merger shall be scrutinised, as regards the part of the procedure concerning the completion of the merger and the formation of the SE, by the court, notary or other authority competent in the Member State of the proposed registered office of the SE to scrutinise that aspect of the legality of mergers of public limited-liability companies.

 

2.     To that end each merging company shall submit to the competent authority the certificate referred to in Article 25(2) within six months of its issue together with a copy of the draft terms of merger approved by that company.

 

3.     The authority referred to in paragraph 1 shall in particular ensure that the merging companies have approved draft terms of merger in the same terms and that arrangements for employee involvement have been determined pursuant to Directive 2001/86/EC.

 

4.     That authority shall also satisfy itself that the SE has been formed in accordance with the requirements of the law of the Member State in which it has its registered office in accordance with Article 15.

 

Article 27

 

1.     A merger and the simultaneous formation of an SE shall take effect on the date on which the SE is registered in accordance with Article 12.

 

2.     The SE may not be registered until the formalities provided for in Articles 25 and 26 have been completed.

 

Article 28

 

For each of the merging companies the completion of the merger shall be publicised as laid down by the law of each Member State in accordance with Article 3 of Directive 68/151/EEC.

 

Article 29

 

1.     A merger carried out as laid down in Article 17(2)(a) shall have the following consequences ipso jure and simultaneously:

 

(a)   all the assets and liabilities of each company being acquired are transferred to the acquiring company;

 

(b)   the shareholders of the company being acquired become shareholders of the acquiring company;

 

(c)   the company being acquired ceases to exist;

 

(d)   the acquiring company adopts the form of an SE.

 

2.     A merger carried out as laid down in Article 17(2)(b) shall have the following consequences ipso jure and simultaneously:

 

(a)   all the assets and liabilities of the merging companies are transferred to the SE;

 

(b)   the shareholders of the merging companies become shareholders of the SE;

 

(c)   the merging companies cease to exist.

 

3.     Where, in the case of a merger of public limited-liability companies, the law of a Member State requires the completion of any special formalities before the transfer of certain assets, rights and obligations by the merging companies becomes effective against third parties, those formalities shall apply and shall be carried out either by the merging companies or by the SE following its registration.

 

4.     The rights and obligations of the participating companies on terms and conditions of employment arising from national law, practice and individual employment contracts or employment relationships and existing at the date of the registration shall, by reason of such registration be transferred to the SE upon its registration.

 

Article 30

 

A merger as provided for in Article 2(1) may not be declared null and void once the SE has been registered.

 

The absence of scrutiny of the legality of the merger pursuant to Articles 25 and 26 may be included among the grounds for the winding-up of the SE.

 

Article 31

 

1.     Where a merger within the meaning of Article 17(2)(a) is carried out by a company which holds all the shares and other securities conferring the right to vote at general meetings of another company, neither Article 20(1)(b), (c) and (d), Article 29(1)(b) nor Article 22 shall apply. National law governing each merging company and mergers of public limited-liability companies in accordance with Article 24 of Directive 78/855/EEC shall nevertheless apply.

 

2.     Where a merger by acquisition is carried out by a company which holds 90 % or more but not all of the shares and other securities conferring the right to vote at general meetings of another company, reports by the management or administrative body, reports by an independent expert or experts and the documents necessary for scrutiny shall be required only to the extent that the national law governing either the acquiring company or the company being acquired so requires.

 

Member States may, however, provide that this paragraph may apply where a company holds shares conferring 90 % or more but not all of the voting rights.

 

Section 3 - Formation of a holding SE

 

Article 32

 

1.     A holding SE may be formed in accordance with Article 2(2).

 

A company promoting the formation of a holding SE in accordance with Article 2(2) shall continue to exist.

 

2.     The management or administrative organs of the companies which promote such an operation shall draw up, in the same terms, draft terms for the formation of the holding SE. The draft terms shall include a report explaining and justifying the legal and economic aspects of the formation and indicating the implications for the shareholders and for the employees of the adoption of the form of a holding SE. The draft terms shall also set out the particulars provided for in Article 20(1)(a), (b), (c), (f), (g), (h) and (i) and shall fix the minimum proportion of the shares in each of the companies promoting the operation which the shareholders must contribute to the formation of the holding SE. That proportion shall be shares conferring more than 50 % of the permanent voting rights.

 

3.     For each of the companies promoting the operation, the draft terms for the formation of the holding SE shall be publicised in the manner laid down in each Member State's national law in accordance with Article 3 of Directive 68/151/EEC at least one month before the date of the general meeting called to decide thereon.

 

4.     One or more experts independent of the companies promoting the operation, appointed or approved by a judicial or administrative authority in the Member State to which each company is subject in accordance with national provisions adopted in implementation of Directive 78/855/EEC, shall examine the draft terms of formation drawn up in accordance with paragraph 2 and draw up a written report for the shareholders of each company. By agreement between the companies promoting the operation, a single written report may be drawn up for the shareholders of all the companies by one or more independent experts, appointed or approved by a judicial or administrative authority in the Member State to which one of the companies promoting the operation or the proposed SE is subject in accordance with national provisions adopted in implementation of Directive 78/855/EEC.

 

5.     The report shall indicate any particular difficulties of valuation and state whether the proposed share-exchange ratio is fair and reasonable, indicating the methods used to arrive at it and whether such methods are adequate in the case in question.

 

6.     The general meeting of each company promoting the operation shall approve the draft terms of formation of the holding SE.

 

Employee involvement in the holding SE shall be decided pursuant to Directive 2001/86/EC. The general meetings of each company promoting the operation may reserve the right to make registration of the holding SE conditional upon its express ratification of the arrangements so decided.

 

7.     These provisions shall apply mutatis mutandis to private limited-liability companies.

 

Article 33

 

1.     The shareholders of the companies promoting such an operation shall have a period of three months in which to inform the promoting companies whether they intend to contribute their shares to the formation of the holding SE. That period shall begin on the date upon which the terms for the formation of the holding SE have been finally determined in accordance with Article 32.

 

2.     The holding SE shall be formed only if, within the period referred to in paragraph 1, the shareholders of the companies promoting the operation have assigned the minimum proportion of shares in each company in accordance with the draft terms of formation and if all the other conditions are fulfilled.

 

3.     If the conditions for the formation of the holding SE are all fulfilled in accordance with paragraph 2, that fact shall, in respect of each of the promoting companies, be publicised in the manner laid down in the national law governing each of those companies adopted in implementation of Article 3 of Directive 68/151/EEC.

 

Shareholders of the companies promoting the operation who have not indicated whether they intend to make their shares available to the promoting companies for the purpose of forming the holding SE within the period referred to in paragraph 1 shall have a further month in which to do so.

 

4.     Shareholders who have contributed their securities to the formation of the SE shall receive shares in the holding SE.

 

5.     The holding SE may not be registered until it is shown that the formalities referred to in Article 32 have been completed and that the conditions referred to in paragraph 2 have been fulfilled.

 

Article 34

 

A Member State may, in the case of companies promoting such an operation, adopt provisions designed to ensure protection for minority shareholders who oppose the operation, creditors and employees.

 

Section 4 - Formation of a subsidiary SE

 

Article 35

 

An SE may be formed in accordance with Article 2(3).

 

Article 36

 

Companies, firms and other legal entities participating in such an operation shall be subject to the provisions governing their participation in the formation of a subsidiary in the form of a public limited-liability company under national law.

 

Section 5 - Conversion of an existing public limited-liability company into an SE

 

Article 37

 

1.     An SE may be formed in accordance with Article 2(4).

 

2.     Without prejudice to Article 12 the conversion of a public limited-liability company into an SE shall not result in the winding up of the company or in the creation of a new legal person.

 

3.     The registered office may not be transferred from one Member State to another pursuant to Article 8 at the same time as the conversion is effected.

 

4.     The management or administrative organ of the company in question shall draw up draft terms of conversion and a report explaining and justifying the legal and economic aspects of the conversion and indicating the implications for the shareholders and for the employees of the adoption of the form of an SE.

 

5.     The draft terms of conversion shall be publicised in the manner laid down in each Member State's law in accordance with Article 3 of Directive 68/151/EEC at least one month before the general meeting called upon to decide thereon.

 

6.     Before the general meeting referred to in paragraph 7 one or more independent experts appointed or approved, in accordance with the national provisions adopted in implementation of Article 10 of Directive 78/855/EEC, by a judicial or administrative authority in the Member State to which the company being converted into an SE is subject shall certify in compliance with Directive 77/91/EEC[8] mutatis mutandis that the company has net assets at least equivalent to its capital plus those reserves which must not be distributed under the law or the Statutes.

 

7.     The general meeting of the company in question shall approve the draft terms of conversion together with the statutes of the SE. The decision of the general meeting shall be passed as laid down in the provisions of national law adopted in implementation of Article 7 of Directive 78/855/EEC.

 

8.     Member States may condition a conversion to a favourable vote of a qualified majority or unanimity in the organ of the company to be converted within which employee participation is organised.

 

9.     The rights and obligations of the company to be converted on terms and conditions of employment arising from national law, practice and individual employment contracts or employment relationships and existing at the date of the registration shall, by reason of such registration be transferred to the SE.

 

TITLE III

 

STRUCTURE OF THE SE

 

Article 38

 

Under the conditions laid down by this Regulation an SE shall comprise:

 

(a)   a general meeting of shareholders and

 

(b)   either a supervisory organ and a management organ (two-tier system) or an administrative organ (one-tier system) depending on the form adopted in the statutes.


Section 1 - Two-tier system

 

Article 39

 

1.     The management organ shall be responsible for managing the SE. A Member State may provide that a managing director or managing directors shall be responsible for the current management under the same conditions as for public limited-liability companies that have registered offices within that Member State's territory.

 

2.     The member or members of the management organ shall be appointed and removed by the supervisory organ.

 

A Member State may, however, require or permit the statutes to provide that the member or members of the management organ shall be appointed and removed by the general meeting under the same conditions as for public limited-liability companies that have registered offices within its territory.

 

3.     No person may at the same time be a member of both the management organ and the supervisory organ of the same SE. The supervisory organ may, however, nominate one of its members to act as a member of the management organ in the event of a vacancy. During such a period the functions of the person concerned as a member of the supervisory organ shall be suspended. A Member State may impose a time limit on such a period.

 

4.     The number of members of the management organ or the rules for determining it shall be laid down in the SE's statutes. A Member State may, however, fix a minimum and/or a maximum number.

 

5.     Where no provision is made for a two-tier system in relation to public limited-liability companies with registered offices within its territory, a Member State may adopt the appropriate measures in relation to SEs.

 

Article 40

 

1.     The supervisory organ shall supervise the work of the management organ. It may not itself exercise the power to manage the SE.

 

2.     The members of the supervisory organ shall be appointed by the general meeting. The members of the first supervisory organ may, however, be appointed by the statutes. This shall apply without prejudice to Article 47(4) or to any employee participation arrangements determined pursuant to Directive 2001/86/EC.

 

3.     The number of members of the supervisory organ or the rules for determining it shall be laid down in the statutes. A Member State may, however, stipulate the number of members of the supervisory organ for SEs registered within its territory or a minimum and/or a maximum number.

 

Article 41

 

1.     The management organ shall report to the supervisory organ at least once every three months on the progress and foreseeable development of the SE's business.

 

2.     In addition to the regular information referred to in paragraph 1, the management organ shall promptly pass the supervisory organ any information on events likely to have an appreciable effect on the SE.

 

3.     The supervisory organ may require the management organ to provide information of any kind which it needs to exercise supervision in accordance with Article 40(1). A Member State may provide that each member of the supervisory organ also be entitled to this facility.

 

4.     The supervisory organ may undertake or arrange for any investigations necessary for the performance of its duties.

 

5.     Each member of the supervisory organ shall be entitled to examine all information submitted to it.

 

Article 42

 

The supervisory organ shall elect a chairman from among its members. If half of the members are appointed by employees, only a member appointed by the general meeting of shareholders may be elected chairman.

 

Section 2 - The one-tier system

 

Article 43

 

1.     The administrative organ shall manage the SE. A Member State may provide that a managing director or managing directors shall be responsible for the day-to-day management under the same conditions as for public limited-liability companies that have registered offices within that Member State's territory.

 

2.     The number of members of the administrative organ or the rules for determining it shall be laid down in the SE's statutes. A Member State may, however, set a minimum and, where necessary, a maximum number of members.

 

The administrative organ shall, however, consist of at least three members where employee participation is regulated in accordance with Directive 2001/86/EC.

 

3.     The member or members of the administrative organ shall be appointed by the general meeting. The members of the first administrative organ may, however, be appointed by the statutes. This shall apply without prejudice to Article 47(4) or to any employee participation arrangements determined pursuant to Directive 2001/86/EC.

 

4.     Where no provision is made for a one-tier system in relation to public limited-liability companies with registered offices within its territory, a Member State may adopt the appropriate measures in relation to SEs.

 

Article 44

 

1.     The administrative organ shall meet at least once every three months at intervals laid down by the statutes to discuss the progress and foreseeable development of the SE's business.

 

2.     Each member of the administrative organ shall be entitled to examine all information submitted to it.

 

Article 45

 

The administrative organ shall elect a chairman from among its members. If half of the members are appointed by employees, only a member appointed by the general meeting of shareholders may be elected chairman.

 

Section 3 - Rules common to the one-tier and two-tier systems

 

Article 46

 

1.     Members of company organs shall be appointed for a period laid down in the statutes not exceeding six years.

 

2.     Subject to any restrictions laid down in the statutes, members may be reappointed once or more than once for the period determined in accordance with paragraph 1.

 

Article 47

 

1.     An SE's statutes may permit a company or other legal entity to be a member of one of its organs, provided that the law applicable to public limited-liability companies in the Member State in which the SE's registered office is situated does not provide otherwise.

 

That company or other legal entity shall designate a natural person to exercise its functions on the organ in question.

 

2.     No person may be a member of any SE organ or a representative of a member within the meaning of paragraph 1 who:

 

(a)   is disqualified, under the law of the Member State in which the SE's registered office is situated, from serving on the corresponding organ of a public limited-liability company governed by the law of that Member State, or

 

(b)   is disqualified from serving on the corresponding organ of a public limited-liability company governed by the law of a Member State owing to a judicial or administrative decision delivered in a Member State.

 

3.     An SE's statutes may, in accordance with the law applicable to public limited-liability companies in the Member State in which the SE's registered office is situated, lay down special conditions of eligibility for members representing the shareholders.

 

4.     This Regulation shall not affect national law permitting a minority of shareholders or other persons or authorities to appoint some of the members of a company organ.

 

Article 48

 

1.     An SE's statutes shall list the categories of transactions which require authorisation of the management organ by the supervisory organ in the two-tier system or an express decision by the administrative organ in the one-tier system.

 

A Member State may, however, provide that in the two-tier system the supervisory organ may itself make certain categories of transactions subject to authorisation.

 

2.     A Member State may determine the categories of transactions which must at least be indicated in the statutes of SEs registered within its territory.

 

Article 49

 

The members of an SE's organs shall be under a duty, even after they have ceased to hold office, not to divulge any information which they have concerning the SE the disclosure of which might be prejudicial to the company's interests, except where such disclosure is required or permitted under national law provisions applicable to public limited-liability companies or is in the public interest.

 

Article 50

 

1.     Unless otherwise provided by this Regulation or the statutes, the internal rules relating to quorums and decision-taking in SE organs shall be as follows:

 

(a)   quorum: at least half of the members must be present or represented;

 

(b)   decision-taking: a majority of the members present or represented.

 

2.     Where there is no relevant provision in the statutes, the chairman of each organ shall have a casting vote in the event of a tie. There shall be no provision to the contrary in the statutes, however, where half of the supervisory organ consists of employees' representatives.

 

3.     Where employee participation is provided for in accordance with Directive 2001/86/EC, a Member State may provide that the supervisory organ's quorum and decision-making shall, by way of derogation from the provisions referred to in paragraphs 1 and 2, be subject to the rules applicable, under the same conditions, to public limited-liability companies governed by the law of the Member State concerned.

 

Article 51

 

Members of an SE's management, supervisory and administrative organs shall be liable, in accordance with the provisions applicable to public limited-liability companies in the Member State in which the SE's registered office is situated, for loss or damage sustained by the SE following any breach on their part of the legal, statutory or other obligations inherent in their duties.

 

Section 4 - General meeting

 

Article 52

 

The general meeting shall decide on matters for which it is given sole responsibility by:

 

(a)   this Regulation or

 

(b)   the legislation of the Member State in which the SE's registered office is situated adopted in implementation of Directive 2001/86/EC.

 

Furthermore, the general meeting shall decide on matters for which responsibility is given to the general meeting of a public limited-liability company governed by the law of the Member State in which the SE's registered office is situated, either by the law of that Member State or by the SE's statutes in accordance with that law.

 

Article 53

 

Without prejudice to the rules laid down in this section, the organisation and conduct of general meetings together with voting procedures shall be governed by the law applicable to public limited-liability companies in the Member State in which the SE's registered office is situated.

 

Article 54

 

1.     An SE shall hold a general meeting at least once each calendar year, within six months of the end of its financial year, unless the law of the Member State in which the SE's registered office is situated applicable to public limited-liability companies carrying on the same type of activity as the SE provides for more frequent meetings. A Member State may, however, provide that the first general meeting may be held at any time in the 18 months following an SE's incorporation.

 

2.     General meetings may be convened at any time by the management organ, the administrative organ, the supervisory organ or any other organ or competent authority in accordance with the national law applicable to public limited-liability companies in the Member State in which the SE's registered office is situated.


Article 55

 

1.     One or more shareholders who together hold at least 10 % of an SE's subscribed capital may request the SE to convene a general meeting and draw up the agenda therefor; the SE's statutes or national legislation may provide for a smaller proportion under the same conditions as those applicable to public limited-liability companies.

 

2.     The request that a general meeting be convened shall state the items to be put on the agenda.

 

3.     If, following a request made under paragraph 1, a general meeting is not held in due time and, in any event, within two months, the competent judicial or administrative authority within the jurisdiction of which the SE's registered office is situated may order that a general meeting be convened within a given period or authorise either the shareholders who have requested it or their representatives to convene a general meeting. This shall be without prejudice to any national provisions which allow the shareholders themselves to convene general meetings.

 

Article 56

 

One or more shareholders who together hold at least 10 % of an SE's subscribed capital may request that one or more additional items be put on the agenda of any general meeting. The procedures and time limits applicable to such requests shall be laid down by the national law of the Member State in which the SE's registered office is situated or, failing that, by the SE's statutes. The above proportion may be reduced by the statutes or by the law of the Member State in which the SE's registered office is situated under the same conditions as are applicable to public limited-liability companies.

 

Article 57

 

Save where this Regulation or, failing that, the law applicable to public limited-liability companies in the Member State in which an SE's registered office is situated requires a larger majority, the general meeting's decisions shall be taken by a majority of the votes validly cast.

 

Article 58

 

The votes cast shall not include votes attaching to shares in respect of which the shareholder has not taken part in the vote or has abstained or has returned a blank or spoilt ballot paper.

 

Article 59

 

1.     Amendment of an SE's statutes shall require a decision by the general meeting taken by a majority which may not be less than two thirds of the votes cast, unless the law applicable to public limited-liability companies in the Member State in which an SE's registered office is situated requires or permits a larger majority.

 

2.     A Member State may, however, provide that where at least half of an SE's subscribed capital is represented, a simple majority of the votes referred to in paragraph 1 shall suffice.

 

3.     Amendments to an SE's statutes shall be publicised in accordance with Article 13.

 

Article 60

 

1.     Where an SE has two or more classes of shares, every decision by the general meeting shall be subject to a separate vote by each class of shareholders whose class rights are affected thereby.

 

2.     Where a decision by the general meeting requires the majority of votes specified in Article 59(1) or (2), that majority shall also be required for the separate vote by each class of shareholders whose class rights are affected by the decision.

 

TITLE IV - ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS

 

Article 61

 

Subject to Article 62 an SE shall be governed by the rules applicable to public limited-liability companies under the law of the Member State in which its registered office is situated as regards the preparation of its annual and, where appropriate, consolidated accounts including the accompanying annual report and the auditing and publication of those accounts.

 

Article 62

 

1.     An SE which is a credit or financial institution shall be governed by the rules laid down in the national law of the Member State in which its registered office is situated in implementation of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions[9] as regards the preparation of its annual and, where appropriate, consolidated accounts, including the accompanying annual report and the auditing and publication of those accounts.

 

2.     An SE which is an insurance undertaking shall be governed by the rules laid down in the national law of the Member State in which its registered office is situated in implementation of Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings[10] as regards the preparation of its annual and, where appropriate, consolidated accounts including the accompanying annual report and the auditing and publication of those accounts.

 

TITLE V - WINDING UP, LIQUIDATION, INSOLVENCY AND CESSATION OF PAYMENTS

 

Article 63

 

As regards winding up, liquidation, insolvency, cessation of payments and similar procedures, an SE shall be governed by the legal provisions which would apply to a public limited-liability company formed in accordance with the law of the Member State in which its registered office is situated, including provisions relating to decision-making by the general meeting.

 

Article 64

 

1.     When an SE no longer complies with the requirement laid down in Article 7, the Member State in which the SE's registered office is situated shall take appropriate measures to oblige the SE to regularise its position within a specified period either:

 

(a)   by re-establishing its head office in the Member State in which its registered office is situated or

 

(b)   by transferring the registered office by means of the procedure laid down in Article 8.

 

2.     The Member State in which the SE's registered office is situated shall put in place the measures necessary to ensure that an SE which fails to regularise its position in accordance with paragraph 1 is liquidated.

 

3.     The Member State in which the SE's registered office is situated shall set up a judicial remedy with regard to any established infringement of Article 7. That remedy shall have a suspensory effect on the procedures laid down in paragraphs 1 and 2.

 

4.     Where it is established on the initiative of either the authorities or any interested party that an SE has its head office within the territory of a Member State in breach of Article 7, the authorities of that Member State shall immediately inform the Member State in which the SE's registered office is situated.

 

Article 65

 

Without prejudice to provisions of national law requiring additional publication, the initiation and termination of winding up, liquidation, insolvency or cessation of payment procedures and any decision to continue operating shall be publicised in accordance with Article 13.

 

Article 66

 

1.     An SE may be converted into a public limited-liability company governed by the law of the Member State in which its registered office is situated. No decision on conversion may be taken before two years have elapsed since its registration or before the first two sets of annual accounts have been approved.

 

2.     The conversion of an SE into a public limited-liability company shall not result in the winding up of the company or in the creation of a new legal person.

 

3.     The management or administrative organ of the SE shall draw up draft terms of conversion and a report explaining and justifying the legal and economic aspects of the conversion and indicating the implications of the adoption of the public limited-liability company for the shareholders and for the employees.

 

4.     The draft terms of conversion shall be publicised in the manner laid down in each Member State's law in accordance with Article 3 of Directive 68/151/EEC at least one month before the general meeting called to decide thereon.

 

5.     Before the general meeting referred to in paragraph 6, one or more independent experts appointed or approved, in accordance with the national provisions adopted in implementation of Article 10 of Directive 78/855/EEC, by a judicial or administrative authority in the Member State to which the SE being converted into a public limited-liability company is subject shall certify that the company has assets at least equivalent to its capital.

 

6.     The general meeting of the SE shall approve the draft terms of conversion together with the statutes of the public limited-liability company. The decision of the general meeting shall be passed as laid down in the provisions of national law adopted in implementation of Article 7 of Directive 78/855/EEC.

 

TITLE VI - ADDITIONAL AND TRANSITIONAL PROVISIONS

 

Article 67

 

1.     If and so long as the third phase of economic and monetary union (EMU) does not apply to it each Member State may make SEs with registered offices within its territory subject to the same provisions as apply to public limited-liability companies covered by its legislation as regards the expression of their capital. An SE may, in any case, express its capital in euro as well. In that event the national currency/euro conversion rate shall be that for the last day of the month preceding that of the formation of the SE.

 

2.     If and so long as the third phase of EMU does not apply to the Member State in which an SE has its registered office, the SE may, however, prepare and publish its annual and, where appropriate, consolidated accounts in euro. The Member State may require that the SE's annual and, where appropriate, consolidated accounts be prepared and published in the national currency under the same conditions as those laid down for public limited-liability companies governed by the law of that Member State. This shall not prejudge the additional possibility for an SE of publishing its annual and, where appropriate, consolidated accounts in euro in accordance with Council Directive 90/604/EEC of 8 November 1990 amending Directive 78/60/EEC on annual accounts and Directive 83/349/EEC on consolidated accounts as concerns the exemptions for small and medium-sized companies and the publication of accounts in ecu[11].

 

TITLE VII - FINAL PROVISIONS

 

Article 68

 

1.     The Member States shall make such provision as is appropriate to ensure the effective application of this Regulation.

 

2.     Each Member State shall designate the competent authorities within the meaning of Articles 8, 25, 26, 54, 55 and 64. It shall inform the Commission and the other Member States accordingly.

 

Article 69

 

Five years at the latest after the entry into force of this Regulation, the Commission shall forward to the Council and the European Parliament a report on the application of the Regulation and proposals for amendments, where appropriate. The report shall, in particular, analyse the appropriateness of:

 

(a)   allowing the location of an SE's head office and registered office in different Member States;

 

(b)   broadening the concept of merger in Article 17(2) in order to admit also other types of merger than those defined in Articles 3(1) and 4(1) of Directive 78/855/EEC;

 

(c)   revising the jurisdiction clause in Article 8(16) in the light of any provision which may have been inserted in the 1968 Brussels Convention or in any text adopted by Member States or by the Council to replace such Convention;

 

(d)   allowing provisions in the statutes of an SE adopted by a Member State in execution of authorisations given to the Member States by this Regulation or laws adopted to ensure the effective application of this Regulation in respect to the SE which deviate from or are complementary to these laws, even when such provisions would not be authorised in the statutes of a public limited-liability company having its registered office in the Member State.


Article 70

 

This Regulation shall enter into force on 8 October 2004.

 

This Regulation shall be binding in its entirety and directly applicable in all Member States.

 

Done at Luxembourg, 8 October 2001.

 

For the Council

 

The President

 

L. Onkelinx


ANNEX I

 

PUBLIC LIMITED-LIABILITY COMPANIES REFERRED TO IN ARTICLE 2(1)

 

 

 

BELGIUM:

 

la société anonyme//de naamloze vennootschap

 

 

 

DENMARK:

 

aktieselskaber

 

 

 

GERMANY:

 

die Aktiengesellschaft

 

 

 

GREECE:

 

ανώνυμη εταιρία

 

 

 

SPAIN:

 

la sociedad anónima

 

 

 

FRANCE:

 

la société anonyme

 

 

 

IRELAND:

 

public companies limited by shares

 

public companies limited by guarantee having a share capital

 

 

 

ITALY:

 

società per azioni

 

 

 

LUXEMBOURG:

 

la société anonyme

 

 

 

NETHERLANDS:

 

de naamloze vennootschap

 

 

 

AUSTRIA:

 

die Aktiengesellschaft

 

 

 

PORTUGAL:

 

a sociedade anónima de responsabilidade limitada

 

 

 

FINLAND:

 

julkinen osakeyhtiö//publikt aktiebolag

 

 

 

SWEDEN:

 

publikt aktiebolag

 

 

 

UNITED KINGDOM:

 

public companies limited by shares

 

public companies limited by guarantee having a share capital


ANNEX II

 

PUBLIC AND PRIVATE LIMITED-LIABILITY COMPANIES REFERRED TO IN ARTICLE 2(2)

 

 

 

BELGIUM:

 

la société anonyme//de naamloze vennootschap,

 

la société privée à responsabilité limitée//besloten vennootschap met beperkte aansprakelijkheid

 

 

 

DENMARK:

 

aktieselskaber,

 

anpartselskaber

 

 

 

GERMANY:

 

die Aktiengesellschaft,

 

die Gesellschaft mit beschränkter Haftung

 

 

 

GREECE:

 

ανώνυμη εταιρία

 

εταιρία περιορισμένης ευθύνης

 

 

 

SPAIN:

 

la sociedad anónima,

 

la sociedad de responsabilidad limitada

 

 

 

FRANCE:

 

la société anonyme,

 

la société à responsabilité limitée

 

 

 

IRELAND:

 

public companies limited by shares,

 

public companies limited by guarantee having a share capital,

 

private companies limited by shares,

 

private companies limited by guarantee having a share capital

 

ITALY:

 

società per azioni,

 

società a responsabilità limitata

 

 

 

LUXEMBOURG:

 

la société anonyme,

 

la société à responsabilité limitée

 

 

 

NETHERLANDS:

 

de naamloze vennootschap,

 

de besloten vennootschap met beperkte aansprakelijkheid

 

 

 

AUSTRIA:

 

die Aktiengesellschaft,

 

die Gesellschaft mit beschränkter Haftung

 

 

 

PORTUGAL:

 

a sociedade anónima de responsabilidade limitada,

 

a sociedade por quotas de responsabilidade limitada

 

 

 

FINLAND:

 

osakeyhtiö

 

aktiebolag

 

 

 

SWEDEN:

 

aktiebolag

 

 

 

UNITED KINGDOM:

 

public companies limited by shares,

 

public companies limited by guarantee having a share capital,

 

private companies limited by shares,

 

private companies limited by guarantee having a share capital

 

 

 



[1]       OJ C 263, 16.10.1989, p. 41 and OJ C 176, 8.7.1991, p. 1.

[2]       Opinion of 4 September 2001 (not yet published in the Official Journal).

[3]       OJ C 124, 21.5.1990, p. 34.

[4]       See p. 22 of this Official Journal.

[5]     OJ L 395, 30.12.1989, p. 40. Directive as last amended by the 1994 Act of Accession.

[6]       OJ L 65, 14.3.1968, p. 8. Directive as last amended by the 1994 Act of Accession.

[7]       OJ L 295, 20.10.1978, p. 36. Directive as last amended by the 1994 Act of Accession.

[8]       Second Council Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent (OJ L 26, 31.1.1977, p. 1). Directive as last amended by the 1994 Act of Accession.

[9]       OJ L 126, 26.5.2000, p. 1.

[10]     OJ L 374, 31.12.1991, p. 7.

[11]     OJ L 317, 16.11.1990, p. 57.

 

 

COUNCIL REGULATION (EC) No 1435/2003

 

of 22 July 2003

 

on the Statute for a European Cooperative Society (SCE)

 

 

 

Corrected by:

 

Corrigendum, OJ L 049, 17.2.2007, p. 35  (1435/03)

 

 

 

 


 

 

COUNCIL REGULATION (EC) No 1435/2003

 

of 22 July 2003

 

on the Statute for a European Cooperative Society (SCE)

 

 

 

THE COUNCIL OF THE EUROPEAN UNION,

 

Having regard to the Treaty establishing the European Community, and in particular Article 308 thereof,

 

 

 

Having regard to the proposal from the Commission[1],

 

 

 

Having regard to the opinion of the European Parliament[2],

 

 

 

Having regard to the opinion of the European Economic and Social Committee[3],

 

 

 

Whereas:

 

(1)        The European Parliament adopted resolutions on 13 April 1983 on cooperatives in the European Community[4], on 9 July 1987 on the contribution of cooperatives to regional development[5], on 26 May 1989 on the role of women in cooperatives and local employment initiatives[6], on 11 February 1994 on the contribution of cooperatives to regional development[7] and on 18 September 1998 on the role of cooperatives in the growth of women's employment[8].

 

 

 

(2)        The completion of the internal market and the improvement it brings about in the economic and social situation throughout the Community mean not only that barriers to trade should be removed, but also that the structures of production should be adapted to the Community dimension. For that purpose it is essential that companies of all types the business of which is not limited to satisfying purely local needs should be able to plan and carry out the reorganisation of their business on a Community scale.

 

 

 

(3)        The legal framework within which business should be carried on in the Community is still based largely on national laws and therefore does not correspond to the economic framework within which it should develop if the objectives set out in Article 18 of the Treaty are to be achieved. That situation forms a considerable obstacle to the creation of groups of companies from different Member States.

 

 

 

(4)        The Council has adopted Regulation (EC) No 2157/2001[9] establishing the legal form of the European Company (SE) according to the general principles of the public limited-liability company. This is not an instrument which is suited to the specific features of cooperatives.

 

 

 

(5)        The European Economic Interest Grouping (EEIG), as provided for in Regulation (EEC) No 2137/85[10], allows undertakings to promote certain of their activities in common, while nevertheless preserving their independence, but does not meet the specific requirements of cooperative enterprise.

 

 

 

(6)        The Community, anxious to ensure equal terms of competition and to contribute to its economic development, should provide cooperatives, which are a form of organisation generally recognised in all Member States, with adequate legal instruments capable of facilitating the development of their cross-border activities. The United Nations has encouraged all governments to ensure a supportive environment in which cooperatives can participate on an equal footing with other forms of enterprise[11].

 

 

 

(7)        Cooperatives are primarily groups of persons or legal entities with particular operating principles that are different from those of other economic agents. These include the principles of democratic structure and control and the distribution of the net profit for the financial year on an equitable basis.

 

 

 

(8)        These particular principles include notably the principle of the primacy of the individual which is reflected in the specific rules on membership, resignation and expulsion, where the ‘one man, one vote’ rule is laid down and the right to vote is vested in the individual, with the implication that members cannot exercise any rights over the assets of the cooperative.

 

 

 

(9)        Cooperatives have a share capital and their members may be either individuals or enterprises. These members may consist wholly or partly of customers, employees or suppliers. Where a cooperative is constituted of members who are themselves cooperative enterprises, it is known as a ‘secondary’ or ‘second-degree’ cooperative. In some circumstances cooperatives may also have among their members a specified proportion of investor members who do not use their services, or of third parties who benefit by their activities or carry out work on their behalf.

 

 

 

(10)   A European cooperative society (hereinafter referred to as ‘SCE’) should have as its principal object the satisfaction of its members' needs and/or the development of their economic and/or social activities, in compliance with the following principles:

 

—     its activities should be conducted for the mutual benefit of the members so that each member benefits from the activities of the SCE in accordance with his/her participation,

 

—     members of the SCE should also be customers, employees or suppliers or should be otherwise involved in the activities of the SCE,

 

—     control should be vested equally in members, although weighted voting may be allowed, in order to reflect each member's contribution to the SCE,

 

—     there should be limited interest on loan and share capital,

 

—     profits should be distributed according to business done with the SCE or retained to meet the needs of members,

 

—     there should be no artificial restrictions on membership,

 

—     net assets and reserves should be distributed on winding-up according to the principle of disinterested distribution, that is to say to another cooperative body pursuing similar aims or general interest purposes.

 

 

 

(11)      Cross-border cooperation between cooperatives in the Community is currently hampered by legal and administrative difficulties which should be eliminated in a market without frontiers.

 

 

 

(12)      The introduction of a European legal form for cooperatives, based on common principles but taking account of their specific features, should enable them to operate outside their own national borders in all or part of the territory of the Community.

 

 

 

(13)      The essential aim of this Regulation is to enable the establishment of an SCE by physical persons resident in different Member States or legal entities established under the laws of different Member States. It will also make possible the establishment of an SCE by merger of two existing cooperatives, or by conversion of a national cooperative into the new form without first being wound up, where that cooperative has its registered office and head office within one Member State and an establishment or subsidiary in another Member State.

 

 

 

(14)      In view of the specific Community character of an SCE, the ‘real seat’ arrangement adopted by this Regulation in respect of SCEs is without prejudice to Member States' laws and does not pre-empt the choices to be made for other Community texts on company law.

 

 

 

(15)      References to capital in this Regulation should comprise solely the subscribed capital. This should not affect any undistributed joint assets/equity capital in the SCE.

 

 

 

(16)      This Regulation does not cover other areas of law such as taxation, competition, intellectual property or insolvency. The provisions of the Member States' law and of Community law are therefore applicable in the above areas and in other areas not covered by this Regulation.

 

 

 

(17)      The rules on the involvement of employees in the European cooperative society are laid down in Directive 2003/72/EC[12], and those provisions thus form an indissociable complement to this Regulation and are to be applied concomitantly.

 

 

 

(18)   Work on the approximation of national company law has made substantial progress so that certain provisions adopted by the Member State where the SCE has its registered office for the purpose of implementing directives on companies may be referred to by analogy for the SCE in areas where the functioning of the cooperative does not require uniform Community rules, such provisions being appropriate to the arrangements governing the SCE, especially:

 

—     first Council Directive 68/151/EEC of 9 March 1968 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 48 of the Treaty, with a view to making such safeguards equivalent throughout the Community[13],

 

—     fourth Council Directive 78/660/EEC of 25 July 1978 on the annual accounts of certain types of companies[14],

 

—     seventh Council Directive 83/349/EEC of 13 June 1983 on consolidated accounts[15],

 

—     eighth Council Directive 84/253/EEC of 10 April 1984 on the approval of persons responsible for carrying out the statutory audits of accounting documents[16],

 

—     11th Council Directive 89/666/EEC of 21 December 1989 concerning disclosure requirements in respect of branches opened in a Member State by certain types of company governed by the law of another State[17].

 

 

 

(19)   Activities in the field of financial services in particular in so far as they concern credit establishments and insurance undertakings have been the subject of legislative measures pursuant to the following Directives:

 

—     Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions[18],

 

—     Council Directive 92/49/EEC on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance (third non-life insurance Directive)[19].

 

 

 

(20)   This form of organisation should be optional,

 

HAS ADOPTED THIS REGULATION:

 

 


CHAPTER I

 

GENERAL PROVISIONS

 

Article 1

 

Form of the SCE

 

1.      A cooperative society may be set up within the territory of the Community in the form of a European Cooperative Society (SCE) on the conditions and in the manner laid down in this Regulation.

 

2.      The subscribed capital of an SCE shall be divided into shares.

 

The number of members and the capital of an SCE shall be variable.

 

Unless otherwise provided by the statutes of the SCE when that SCE is formed, no member shall be liable for more than the amount he/she has subscribed. Where the members of the SCE have limited liability, the name of the SCE shall end in ‘limited’.

 

3.      An SCE shall have as its principal object the satisfaction of its members' needs and/or the development of their economic and social activities, in particular through the conclusion of agreements with them to supply goods or services or to execute work of the kind that the SCE carries out or commissions. An SCE may also have as its object the satisfaction of its members' needs by promoting, in the manner set forth above, their participation in economic activities, in one or more SCEs and/or national cooperatives. An SCE may conduct its activities through a subsidiary.

 

4.      An SCE may not extend the benefits of its activities to non-members or allow them to participate in its business, except where its statutes provide otherwise.

 

5.      An SCE shall have legal personality.

 

6.      Employee involvement in an SCE shall be governed by the provisions of Directive 2003/72/EC.

 

Article 2

 

Formation

 

1.      An SCE may be formed as follows:

 

—     by five or more natural persons resident in at least two Member States,

 

—     by five or more natural persons and companies and firms within the meaning of the second paragraph of Article 48 of the Treaty and other legal bodies governed by public or private law, formed under the law of a Member State, resident in, or governed by the law of, at least two different Member States,

 

—     by companies and firms within the meaning of the second paragraph of Article 48 of the Treaty and other legal bodies governed by public or private law formed under the law of a Member State which are governed by the law of at least two different Member States,

 

—     by a merger between cooperatives formed under the law of a Member State with registered offices and head offices within the Community, provided that at least two of them are governed by the law of different Member States,

 

—     by conversion of a cooperative formed under the law of a Member State, which has its registered office and head office within the Community if for at least two years it has had an establishment or subsidiary governed by the law of another Member State.

 

2.      A Member State may provide that a legal body the head office of which is not in the Community may participate in the formation of an SCE provided that legal body is formed under the law of a Member State, has its registered office in that Member State and has a real and continuous link with a Member State's economy.

 

Article 3

 

Minimum capital

 

1.      The capital of an SCE shall be expressed in the national currency. An SCE whose registered office is outside the Euro-area may also express its capital in euro.

 

2.      The subscribed capital shall not be less than EUR 30 000.

 

3.      The laws of the Member State requiring a greater subscribed capital for legal bodies carrying on certain types of activity shall apply to SCEs with registered offices in that Member State.

 

4.      The statutes shall lay down a sum below which subscribed capital may not be allowed to fall as a result of repayment of the shares of members who cease to belong to the SCE. This sum may not be less than the amount laid down in paragraph 2. The date laid down in Article 16 by which members who cease to belong to the SCE are entitled to repayment shall be suspended as long as repayment would result in subscribed capital falling below the set limit.

 

5.      The capital may be increased by successive subscriptions by members or on the admission of new members, and it may be reduced by the total or partial repayment of subscriptions, subject to paragraph 4.

 

Variations in the amount of the capital shall not require amendment of the statutes or disclosure.


Article 4

 

Capital of the SCE

 

1.      The subscribed capital of an SCE shall be represented by the members' shares, expressed in the national currency. An SCE whose registered office is outside of the Euro-area may also express its shares in euro. More than one class of shares may be issued.

 

The statutes may provide that different classes of shares shall confer different entitlements with regard to the distribution of surpluses. Shares conferring the same entitlements shall constitute one class.

 

2.      The capital may be formed only of assets capable of economic assessment. Members' shares may not be issued for an undertaking to perform work or supply services.

 

3.      Shares shall be held by named persons. The nominal value of shares in a single class shall be identical. It shall be laid down in the statutes. Shares may not be issued at a price lower than their nominal value.

 

4.      Shares issued for cash shall be paid for on the day of the subscription to not less than 25 % of their nominal value. The balance shall be paid within five years unless the statutes provide for a shorter period.

 

5.      Shares issued otherwise than for cash shall be fully paid for at the time of subscription.

 

6.      The law applicable to public limited-liability companies in the Member State where the SCE has its registered office, concerning the appointment of experts and the valuation of any consideration other than cash, shall apply by analogy to the SCE.

 

7.      The statutes shall lay down the minimum number of shares which must be subscribed for in order to qualify for membership. If they stipulate that the majority at general meetings shall be constituted by members who are natural persons and if they lay down a subscription requirement for members wishing to take part in the activities of the SCE, they may not make membership subject to subscription for more than one share.

 

8.      When it considers the accounts for the financial year, the annual general meeting shall by resolution record the amount of the capital at the end of the financial year and the variation by reference to the preceding financial year.

 

At the proposal of the administrative or management organ, the subscribed capital may be increased by the capitalisation of all or part of the reserves available for distribution, following a decision of the general meeting, in accordance with the quorum and majority requirements for an amendment of the statutes. New shares shall be awarded to members in proportion to their shares in the previous capital.

 

9.      The nominal value of shares may be increased by consolidating the shares issued. Where such an increase necessitates a call for supplementary payments from the members under provisions laid down in the statutes, the decision shall be taken by the general meeting in accordance with the quorum and majority requirements for the amendment of the statutes.

 

10.    The nominal value of shares may be reduced by subdividing the shares issued.

 

11.    In accordance with the statutes and with the agreement either of the general meeting or of the management or administrative organ, shares may be assigned or sold to a member or to anyone acquiring membership.

 

12.    An SCE may not subscribe for its own shares, purchase them or accept them as security, either directly or through a person acting in his/her own name but on behalf of the SCE.

 

An SCE's shares may, however, be accepted as security in the ordinary transactions of SCE credit institutions.

 

Article 5

 

Statutes

 

1.      For the purposes of this Regulation, ‘the statutes of an SCE’ shall mean both the instrument of incorporation and, when they are the subject of a separate document, the statutes of the SCE.

 

2.      The founder members shall draw up the statutes of the SCE in accordance with the provisions for the formation of cooperative societies laid down by the law of the Member State in which the SCE has its registered office. The statutes shall be in writing and signed by the founder members.

 

3.      The law for the precautionary supervision applicable in the Member State in which the SCE has its registered office to public limited-liability companies during the phase of the constitution shall apply by analogy to the control of the constitution of the SCE.

 

4.      The statutes of the SCE shall include at least:

 

—     the name of the SCE, preceded or followed by the abbreviation ‘SCE’ and, where appropriate, the word ‘limited’,

 

—     a statement of the objects,

 

—     the names of the natural persons and the names of the entities which are founder members of the SCE, indicating their objects and registered offices in the latter case,

 

—     the address of the SCE's registered office,

 

—     the conditions and procedures for the admission, expulsion and resignation of members,

 

—     the rights and obligations of members, and the different categories of member, if any, and the rights and obligations of members in each category,

 

—     the nominal value of the subscribed shares, the amount of the subscribed capital, and an indication that the capital is variable,

 

—     specific rules concerning the amount to be allocated from the surplus, where appropriate, to the legal reserve,

 

—     the powers and responsibilities of the members of each of the governing organs,

 

—     provisions governing the appointment and removal of the members of the governing organs,

 

—     the majority and quorum requirements,

 

—     the duration of the existence of the society, where this is of limited duration.

 

Article 6

 

Registered office

 

The registered office of an SCE shall be located within the Community, in the same Member State as its head office. A Member State may, in addition, impose on SCEs registered in its territory the obligation of locating the head office and the registered office in the same place.

 

Article 7

 

Transfer of registered office

 

1.      The registered office of an SCE may be transferred to another Member State in accordance with paragraphs 2 to 16. Such transfer shall not result in the winding-up of the SCE or in the creation of a new legal person.

 

2.      The management or administrative organ shall draw up a transfer proposal and publicise it in accordance with Article 12, without prejudice to any additional forms of publication provided for by the Member State of the registered office. That proposal shall state the current name, the registered office and number of the SCE and shall cover:

 

(a)     the proposed registered office of the SCE;

 

(b)     the proposed statutes of the SCE including, where appropriate, its new name;

 

(c)     the proposed timetable for the transfer;

 

(d)    any implication the transfer may have on employees' involvement;

 

(e)     any rights provided for the protection of members, creditors and holders of other rights.

 

3.      The management or administrative organ shall draw up a report explaining and justifying the legal and economic aspects as well as the employment effects of the transfer and explaining the implications of the transfer for members, creditors, employees and holders of other rights.

 

4.      An SCE's members, creditors and the holders of other rights, and any other body which according to national law can exercise this right, shall be entitled, at least one month before the general meeting called upon to decide on the transfer, to examine, at the SCE's registered office, the transfer proposal and the report drawn up pursuant to paragraph 3 and, on request, to obtain copies of these documents free of charge.

 

5.      Any member who opposed the transfer decision at the general meeting or at a sectorial or section meeting may tender his/her resignation within two months of the general meeting's decision. Membership shall terminate at the end of the financial year in which the resignation was tendered; the transfer shall not take effect in respect of that member. Resignation shall entitle the member to repayment of shares on the conditions laid down in Articles 3(4) and 16.

 

6.      No decision to transfer may be taken for two months after publication of the proposal. Such a decision shall be taken as laid down in Article 61(4). 

 

7.      Before the competent authority issues the certificate mentioned in paragraph 8, the SCE shall satisfy it that, in respect of any liabilities arising prior to the publication of the transfer proposal, the interests of creditors and holders of other rights in respect of the SCE (including those of public bodies) have been adequately protected in accordance with requirements laid down by the Member State where the SCE has its registered office prior to the transfer.

 

A Member State may extend the application of the first subparagraph to liabilities that arise, or may arise, prior to the transfer.

 

The first and second subparagraphs shall apply without prejudice to the application to SCEs of the national legislation of Member States concerning the satisfaction or securing of payments to public bodies.

 

8.      In the Member State in which the SCE has its registered office, the court, notary or other competent authority shall issue a certificate attesting to the completion of the acts and formalities to be accomplished before the transfer.

 

9.      The new registration may not be effected until the certificate referred to in paragraph 8 has been submitted and evidence has been produced that the formalities required for registration in the country of the new registered office have been completed.

 

10.    The transfer of an SCE's registered office and the consequent amendment of its statutes shall take effect on the date on which the SCE is registered in accordance with Article 11(1) in the register for its new registered office.

 

11.    When the SCE's new registration has been effected, the registry for its new registration shall notify the register for its old registration. Deletion of the old registration shall be effected on receipt of that notification, but not before.

 

12.    The new registration and the deletion of the old registration shall be publicised in the Member States concerned, in accordance with Article 12.

 

13.    On publication of an SCE's new registration, the new registered office may be relied on as against third parties. However, as long as the deletion of the SCE's registration from the register of its previous registered office has not been publicised, third parties may continue to rely on the previous registered office unless the SCE proves that such third parties were aware of the new registered office.

 

14.    The laws of a Member State may provide that, as regards SCEs registered in that Member State, the transfer of a registered office which would result in a change of the law applicable shall not take effect if any of that Member State's competent authorities opposes it within the two-month period referred to in paragraph 6. Such opposition may be based only on grounds of public interest.

 

Where an SCE is supervised by a national financial supervisory authority according to Community directives, the right to oppose the change of registered office applies to this authority as well.

 

Review by a judicial authority shall be possible.

 

15.  An SCE may not transfer its registered office if proceedings for winding-up, including voluntary winding-up, liquidation, insolvency or suspension of payments or other similar proceedings have been brought against it.

 

16.  An SCE which has transferred its registered office to another Member State shall be considered, in respect of any course of action arising prior to the transfer as determined in paragraph 10, as having its registered office in the Member State where the SCE was registered prior to the transfer, even if the SCE is sued after the transfer.

 

Article 8

 

Law applicable

 

1.      An SCE shall be governed:

 

(a)     by this Regulation;

 

(b)     where expressly authorised by this Regulation, by the provisions of its statutes;

 

(c)     in the case of matters not regulated by this Regulation or, where matters are partly regulated by it, of those aspects not covered by it, by:

 

(i)      the laws adopted by Member States in the implementation of Community measures relating specifically to SCEs;

 

(ii)     the laws of Member States which would apply to a cooperative formed in accordance with the law of the Member State in which the SCE has its registered office;

 

(iii)    the provisions of its statutes, in the same way as for a cooperative formed in accordance with the law of the Member State in which the SCE has its registered office.

 

2.      If national law provides for specific rules and/or restrictions related to the nature of business carried out by an SCE, or for forms of control by a supervisory authority, that law shall apply in full to the SCE.

 

Article 9

 

Principle of non-discrimination

 

Subject to this Regulation, an SCE shall be treated in every Member State as if it were a cooperative, formed in accordance with the law of the Member State in which it has its registered office.

 

Article 10

 

Particulars to be stated in the documents

 

1.      The law applicable, in the Member State where the SCE has its registered office, to public limited-liability companies regulating the content of the letters and documents sent to third parties shall apply by analogy to that SCE. The name of the SCE shall be preceded or followed by the abbreviation ‘SCE’ and, where appropriate, by the word ‘limited’.

 

2.      Only SCEs may include the acronym ‘SCE’ before or after their name in order to determine their legal form.

 

3.      Nevertheless, companies, firms and other legal entities registered in a Member State before the date of entry into force of this Regulation in the names of which the acronym ‘SCE’ appears shall not be required to alter their names.

 

Article 11

 

Registration and disclosure requirements

 

1.      Every SCE shall be registered in the Member State in which it has its registered office in a register designated by the law of that Member State in accordance with the law applicable to public limited-liability companies.

 

2.      An SCE may not be registered unless an agreement on arrangements for employee involvement pursuant to Article 4 of Directive 2003/72/EC has been concluded, or a decision pursuant to Article 3(6) of the Directive has been taken, or the period for negotiations pursuant to Article 5 of the Directive has expired without an agreement having been concluded.

 

3.      In order for an SCE established by way of merger to be registered in a Member State which has made use of the option referred to in Article 7(3) of Directive 2003/72/EC, either an agreement pursuant to Article 4 of the Directive must have been concluded on the arrangements for employee involvement, including participation, or none of the participating cooperatives must have been governed by participation rules before registration of the SCE.

 

4.      The statutes of the SCE must not conflict at any time with the arrangements for employee involvement which have been so determined. Where such new arrangements determined pursuant to Directive 2003/72/EC conflict with the existing statutes, the statutes shall be amended to the extent necessary.

 

In this case, a Member State may provide that the management organ or the administrative organ of the SCE shall be entitled to amend the statutes without any further decision from the general meeting.

 

5.      The law applicable, in the Member State where the SCE has its registered office, to public limited-liability companies concerning disclosure requirements of documents and particulars shall apply by analogy to that SCE.

 

Article 12

 

Publication of documents in the Member States

 

1.      Publication of documents and particulars concerning an SCE which must be made public under this Regulation shall be effected in the manner laid down in the laws of the Member State applicable to public limited-liability companies in which the SCE has its registered office.

 

2.      The national rules adopted pursuant to Directive 89/666/EEC shall apply to branches of an SCE opened in a Member State other than that in which it has its registered office. However, Member States may provide for derogations from the national provisions implementing that Directive to take account of the specific features of cooperatives.

 

Article 13

 

Notice in the Official Journal of the European Union

 

1.      Notice of an SCE's registration and of the deletion of such a registration shall be published for information purposes in the Official Journal of the European Union after publication in accordance with Article 12. That notice shall state the name, number, date and place of registration of the SCE, the date and place of publication and the title of publication, the registered office of the SCE and its sector of activity.

 

2.      Where the registered office of an SCE is transferred in accordance with Article 7, notice shall be published giving the information provided for in paragraph 1, together with that relating to the new registration.

 

3.      The particulars referred to in paragraph 1 shall be forwarded to the Office for Official Publications of the European Communities within one month of the publication referred to in Article 12(1).


Article 14

 

Acquisition of membership

 

1.      Without prejudice to Article 33(1)(b) the acquisition of membership of an SCE shall be subject to the approval of the management or administrative organ. Candidates refused membership may appeal to the general meeting held following the application for membership.

 

Where the laws of the Member State of the SCE's registered office so permit, the statutes may provide that persons who do not expect to use or produce the SCE's goods and services may be admitted as investor (non-user) members. The acquisition of such membership shall be subject to approval by the general meeting or any other organ delegated to give approval by the general meeting or the statutes.

 

Members who are legal bodies shall be deemed to be users by virtue of the fact that they represent their own members provided that their members who are natural persons are users.

 

Unless the statutes provide otherwise, membership of an SCE may be acquired by natural persons or legal bodies.

 

2.      The statutes may make admission subject to other conditions, in particular:

 

—     subscription of a minimum amount of capital,

 

—     conditions related to the objects of the SCE.

 

3.      Where provided for in the statutes, applications for a supplementary stake in the capital may be addressed to members.

 

4.      An alphabetical index of all members shall be kept at the registered office of the SCE, showing their addresses and the number and class, if appropriate, of the shares they hold. Any party having a direct legitimate interest may inspect the index on request, and may obtain a copy of the whole or any part at a price not exceeding the administrative cost thereof.

 

5.      Any transaction which affects the manner in which the capital is ascribed or allotted, or increased or reduced, shall be entered on the index of members provided for in paragraph 4 no later than the month following that in which the change occurs.

 

6.      The transactions referred to in paragraph 5 shall not take effect with respect to the SCE or third parties having a direct legitimate interest until they are entered on the index referred to in paragraph 4.

 

7.      Members shall on request be given a written statement certifying that the change has been entered.


Article 15

 

Loss of membership

 

1.      Membership shall be lost:

 

—     upon resignation,

 

—     upon expulsion, where the member commits a serious breach of his/her obligations or acts contrary to the interests of the SCE,

 

—     where authorised by the statutes, upon the transfer of all shares held to a member or a natural person or legal entity which has acquired membership,

 

—     upon winding-up in the case of a member that is not a natural person,

 

—     upon bankruptcy,

 

—     upon death,

 

—     in any other situation provided for in the statutes or in the legislation on cooperatives of the Member State in which the SCE has its registered office.

 

2.      Any minority member who opposed an amendment to the statutes at the general meeting whereby:

 

(i)      new obligations in respect of payments or other services were introduced; or

 

(ii)     existing obligations for members were substantially extended; or

 

(iii)    the period of notice for resignation from the SCE was extended to more than five years;

 

may tender his/her resignation within two months of the general meeting's decision.

 

Membership shall terminate at the end of the current financial year in the cases referred to in points (i) and (ii) of the first subparagraph and at the end of the period of notice which applied before the statutes were amended in the case referred to in point (iii) thereof. The amendment to the statutes shall not take effect in respect of that member. Resignation shall entitle the member to repayment of shares on the conditions laid down in Articles 3(4) and 16.

 

3.      The decision to expel a member shall be taken by the administrative or management organ, after the member has been heard. The member may appeal against such a decision to the general meeting.


Article 16

 

Financial entitlements of members in the event of resignation or expulsion

 

1.      Except where shares are transferred and subject to Article 3, loss of membership shall entitle the member to repayment of his/her part of the subscribed capital, reduced in proportion to any losses charged against the SCE's capital.

 

2.      The amounts deducted under paragraph 1 shall be calculated by reference to the balance sheet for the financial year in which the entitlement to repayment arose.

 

3.      The statutes shall lay down the procedures and conditions for exercising the right to resign and lay down the time within which repayment shall be made, which may not exceed three years. In any event, the SCE shall not be obliged to make the repayment less than six months after approval of the balance sheet issued following the loss of membership.

 

4.      Paragraphs 1, 2 and 3 shall apply also where only a part of a member's shareholding is to be repaid.

 

 

 

CHAPTER II

 

FORMATION

 

Section 1 - General

 

Article 17

 

Law applicable during formation

 

1.      Subject to this Regulation, the formation of an SCE shall be governed by the law applicable to cooperatives in the Member State in which the SCE establishes its registered office.

 

2.      The registration of an SCE shall be made public in accordance with Article 12.

 

Article 18

 

Acquisition of legal personality

 

1.      An SCE shall acquire legal personality on the day of its registration in the Member State in which it has its registered office, in the register designated by that State in accordance with Article 11(1).

 

2.      If acts are performed in an SCE's name before its registration in accordance with Article 11 and the SCE does not assume the obligations arising out of such acts after its registration, the natural persons, companies, firms or other legal entities which performed those acts shall be jointly and severally liable therefor, without limit in the absence of agreement to the contrary.

 

 

 

Section 2 - Formation by merger

 

Article 19

 

Procedures for formation by merger

 

An SCE may be formed by means of a merger carried out in accordance with:

 

—     the procedure for merger by acquisition,

 

—     the procedure for merger by the formation of a new legal person.

 

In the case of a merger by acquisition, the acquiring cooperative shall take the form of an SCE when the merger takes place. In the case of a merger by the formation of a new legal person, the latter shall take the form of an SCE.

 

Article 20

 

Law applicable in the case of merger

 

For matters not covered by this section or, where a matter is partly covered by it, for aspects not covered by it, each cooperative involved in the formation of an SCE by merger shall be governed by the provisions of the law of the Member State to which it is subject that apply to mergers of cooperatives and, failing that, the provisions applicable to internal mergers of public limited-liability companies under the law of that State.

 

Article 21

 

Grounds for opposition to a merger

 

The laws of a Member State may provide that a cooperative governed by the law of that Member State may not take part in the formation of an SCE by merger if any of that Member State's competent authorities opposes it before the issue of the certificate referred to in Article 29(2).

 

Such opposition may be based only on grounds of public interest. Review by a judicial authority shall be possible.

 

Article 22

 

Conditions of merger

 

1.      The management or administrative organ of merging cooperatives shall draw up draft terms of merger. The draft terms of merger shall include the following particulars:

 

(a)     the name and registered office of each of the merging cooperatives together with those proposed for the SCE;

 

(b)     the share-exchange ratio of the subscribed capital and the amount of any cash payment. If there are no shares, a precise division of the assets and its equivalent value in shares;

 

(c)     the terms for the allotment of shares in the SCE;

 

(d)    the date from which the holding of shares in the SCE will entitle the holders to share in surplus and any special conditions affecting that entitlement;

 

(e)     the date from which the transactions of the merging cooperatives will be treated for accounting purposes as being those of the SCE;

 

(f)     the special conditions or advantages attached to debentures or securities other than shares which, according to Article 64, do not confer the status of members;

 

(g)     the rights conferred by the SCE on the holders of shares to which special rights are attached and on the holders of securities other than shares, or the measures proposed concerning them;

 

(h)     the forms of protection of the rights of creditors of the merging cooperatives;

 

(i)      any special advantage granted to the experts who examine the draft terms of merger or to members of the administrative, management, supervisory or controlling organs of the merging cooperatives;

 

(j)      the statutes of the SCE;

 

(k)     information on the procedures by which arrangements for employee involvement are determined pursuant to Directive 2003/72/EC.

 

2.      The merging cooperatives may include further items in the draft terms of merger.

 

3.      The law applicable to public limited-liability companies concerning the draft terms of a merger shall apply by analogy to the cross-border merger of cooperatives for the creation of an SCE.

 

Article 23

 

Explanation and justification of the terms of merger

 

The administrative or management organs of each merging cooperative shall draw up a detailed written report explaining and justifying the draft terms of merger from a legal and economic viewpoint and in particular the share-exchange ratio. The report shall also indicate any special valuation difficulties.


Article 24

 

Publication

 

1.      The law applicable to public limited-liability companies concerning the disclosure requirements of the draft terms of mergers shall apply by analogy to each of the merging cooperatives, subject to the additional requirements imposed by the Member State to which the cooperative concerned is subject.

 

2.      Publication of the draft terms of merger in the national gazette shall, however, include the following particulars for each of the merging cooperatives:

 

(a)     the type, name and registered office of each merging cooperative;

 

(b)     the address of the place or of the register in which the statutes and all other documents and particulars are filed in respect of each merging cooperative, and the number of the entry in that register;

 

(c)     an indication of the arrangements made in accordance with Article 28 for the exercise of the rights of the creditors of the cooperative in question and the address at which complete information on those arrangements may be obtained free of charge;

 

(d)    an indication of the arrangements made in accordance with Article 28 for the exercise of the rights of members of the cooperative in question and the address at which complete information on those arrangements may be obtained free of charge;

 

(e)     the name and registered office proposed for the SCE;

 

(f)     the conditions determining the date on which the merger will take effect pursuant to Article 31.

 

Article 25

 

Disclosure requirements

 

1.      Any member shall be entitled, at least one month before the date of the general meeting required to decide on the merger, to inspect at the registered office the following documents:

 

(a)     the draft terms of merger mentioned in Article 22;

 

(b)     the annual accounts and management reports of the merging cooperatives for the three preceding financial years;

 

(c)     an accounting statement drafted in accordance with the provisions applicable to the internal mergers of public limited-liability companies, to the extent that such a statement is required by these provisions;

 

(d)    the experts' report on the value of shares to be distributed in exchange for the assets for the merging cooperatives or the share exchange ratio as provided for in Article 26;

 

(e)     the report from the cooperative's administrative or management organs as provided for in Article 23.

 

2.      A full copy of the documents referred to in paragraph 1 or, if he/she so wishes, an extract, may be obtained by any member on request and free of charge.

 

Article 26

 

Report of independent experts

 

1.      For each merging cooperative, one or more independent experts, appointed by that cooperative in accordance with the provisions of Article 4(6), shall examine the draft terms of merger and draw up a written report for the members.

 

2.      A single report for all merging cooperatives may be drawn up where this is permitted by the laws of the Member States to which the cooperatives are subject.

 

3.      The law applicable to the mergers of public limited-liability companies concerning the rights and obligations of experts shall apply by analogy to the merger of cooperatives.

 

Article 27

 

Approval of the terms of merger

 

1.      The general meeting of each of the merging cooperatives shall approve the draft terms of the merger.

 

2.      Employee involvement in the SCE shall be decided upon pursuant to Directive 2003/72/EC. The general meetings of each of the merging cooperatives may reserve the right to make registration of the SCE conditional upon its express ratification of the arrangements so decided.

 

Article 28

 

Laws applicable to formation by merger

 

1.      The law of the Member State governing each merging cooperative shall apply as in the case of a merger of public limited-liability companies, taking into account the cross-border nature of the merger, with regard to the protection of the interests of:

 

—     creditors of the merging cooperatives,

 

—     holders of bonds in the merging cooperatives.

 

2.      A Member State may, in the case of the merging cooperatives governed by its law, adopt provisions designed to ensure appropriate protection for members who have opposed the merger.

 

Article 29

 

Scrutiny of merger procedure

 

1.      The legality of a merger shall be scrutinised, as regards the part of the procedure concerning each merging cooperative, in accordance with the law of the Member State to which the merging cooperative is subject that apply to mergers of cooperatives and, failing that, the provisions applicable to internal mergers of public limited companies under the law of that State.

 

2.      In each Member State concerned the court, notary or other competent authority shall issue a certificate attesting to the completion of the pre-merger acts and formalities.

 

3.      If the law of a Member State to which a merging cooperative is subject provides for a procedure to scrutinise and amend the share-exchange ratio, or a procedure to compensate minority members, without preventing the registration of the merger, such procedures shall apply only if the other merging cooperatives situated in Member States which do not provide for such procedure explicitly accept, when approving the draft terms of the merger in accordance with Article 27(1), the possibility for the members of that merging cooperative to have recourse to such procedure. In such cases, the court, notary or other competent authorities may issue the certificate referred to in paragraph 2 even if such a procedure has been started. The certificate must, however, indicate that the procedure is pending. The decision in the procedure shall be binding on the acquiring cooperative and all its members.

 

Article 30

 

Scrutiny of legality of merger

 

1.      The legality of a merger shall be scrutinised, as regards the part of the procedure concerning the completion of the merger and the formation of the SCE, by the court, notary or other competent authority in the Member State of the proposed registered office of the SCE able to scrutinise that aspect of the legality of mergers of cooperatives and, failing that, mergers of public limited-liability companies.

 

2.      To that end, each merging cooperative shall submit to the competent authority the certificate referred to in Article 29(2) within six months of its issue together with a copy of the draft terms of merger approved by that cooperative.

 

3.      The authority referred to in paragraph 1 shall in particular ensure that the merging cooperatives have approved draft terms of merger in the same terms and that arrangements for employee involvement have been determined pursuant to Directive 2003/72/EC.

 

4.      The said authority shall also satisfy itself that the SCE has been formed in accordance with the requirements of the law of the Member State in which it has its registered office.

 

Article 31

 

Registration of merger

 

1.      A merger and the simultaneous formation of an SCE shall take effect on the date on which the SCE is registered in accordance with Article 11(1).

 

2.      The SCE may not be registered until all the formalities provided for in Articles 29 and 30 have been completed.

 

Article 32

 

Publication

 

For each of the merging cooperatives the completion of the merger shall be made public as laid down by the law of the Member State concerned in accordance with the laws governing mergers of public companies limited by shares.

 

Article 33

 

Consequences of merger

 

1.      A merger carried out as laid down in the first indent of the first subparagraph of Article 19 shall have the following consequences ipso jure and simultaneously:

 

(a)     all the assets and liabilities of each cooperative being acquired are transferred to the acquiring legal person;

 

(b)     the members of each cooperative being acquired become members of the acquiring legal person;

 

(c)     the cooperatives being acquired cease to exist;

 

(d)    the acquiring legal person assumes the form of an SCE.

 

2.      A merger carried out as laid down in the second indent of the first subparagraph of Article 19 shall have the following consequences ipso jure and simultaneously:

 

(a)     all the assets and liabilities of the merging cooperatives are transferred to the SCE;

 

(b)     the members of the merging cooperatives become members of the SCE;

 

(c)     the merging cooperatives cease to exist.

 

3.      Where, in the case of a merger of cooperatives, the law of a Member State requires the completion of any special formalities before the transfer of certain assets, rights and obligations by the merging cooperatives becomes effective against third parties, those formalities shall apply and shall be carried out either by the merging cooperatives or by the SCE following its registration.

 

4.      The rights and obligations of the participating cooperatives in relation to both individual and collective terms and conditions of employment arising from national law, practice and individual employment contracts or employment relationships and existing at the date of the registration shall, by reason of such registration be transferred to the SCE.

 

The first subparagraph shall not apply to the right of workers' representatives to participate in general or section or sectorial meetings provided for in Article 59(4).

 

5.      When the merger has been registered, the SCE shall immediately inform the members of the cooperative being acquired of the fact that they have been entered in the register of members and of the number of their shares.

 

Article 34

 

Legality of the merger

 

1.      A merger as provided for in the fourth indent of Article 2(1) may not be declared null and void once the SCE has been registered.

 

2.      The absence of scrutiny of the legality of the merger pursuant to Articles 29 and 30 shall constitute one of the grounds for the winding-up of the SCE, in accordance with the provisions of Article 73.

 

Section 3 - Conversion of an existing cooperative into an SCE

 

Article 35

 

Procedures for formation by conversion

 

1.      Without prejudice to Article 11, the conversion of a cooperative into an SCE shall not result in the winding-up of the cooperative or in the creation of a new legal person.

 

2.      The registered office may not be transferred from one Member State to another pursuant to Article 7 at the same time as the conversion is effected.

 

3.      The administrative or management organ of the cooperative in question shall draw up draft terms of conversion and a report explaining and justifying the legal and economic aspects as well as the employment effects of the conversion and indicating the implications for members and employees of the adoption of the form of an SCE.

 

4.      The draft terms of conversion shall be made public in the manner laid down in each Member State's law at least one month before the general meeting called upon to decide thereon.

 

5.      Before the general meeting referred to in paragraph 6, one or more independent experts appointed or approved, in accordance with the national provisions, by a judicial or administrative authority in the Member State to which the cooperative being converted into an SCE is subject shall certify mutatis mutandis that the rules of Article 22(1)(b) are respected.

 

6.      The general meeting of the cooperative in question shall approve the draft terms of conversion together with the statutes of the SCE.

 

7.      Member States may make a conversion conditional on a favourable vote of a qualified majority or unanimity in the controlling organ of the cooperative to be converted within which employee participation is organised.

 

8.      The rights and obligations of the cooperative to be converted on both individual and collective terms and conditions of employment arising from national law, practice and individual employment contracts or employment relationships and existing at the date of the registration shall, by reason of such registration, be transferred to the SCE.

 

 

 

CHAPTER III

 

STRUCTURE OF THE SCE

 

Article 36

 

Structure of organs

 

Under the conditions laid down by this Regulation an SCE shall comprise:

 

(a)     a general meeting; and

 

(b)     either a supervisory organ and a management organ (two-tier system) or an administrative organ (one-tier system) depending on the form adopted in the statutes.

 

Section 1 - Two-tier system

 

Article 37

 

Functions of the management organ; appointment of members

 

1.      The management organ shall be responsible for managing the SCE and shall represent it in dealings with third parties and in legal proceedings. A Member State may provide that a managing director is responsible for the current management under the same conditions as for cooperatives that have registered offices within that Member State's territory.

 

2.      The member or members of the management organ shall be appointed and removed by the supervisory organ.

 

However, a Member State may require or permit the statutes to provide that the member or members of the management organ are appointed and removed by the general meeting under the same conditions as for cooperatives that have registered offices within its territory.

 

3.      No person may at the same time be a member of the management organ and of the supervisory organ of an SCE. The supervisory organ may, however, nominate one of its members to exercise the function of member of the management organ in the event of a vacancy. During such period, the functions of the person concerned as member of the supervisory organ shall be suspended. A Member State may impose a time limit on such a period.

 

4.      The number of members of the management organ or the rules for determining it shall be laid down in the SCE's statutes. However, a Member State may fix a minimum and/or maximum number.

 

5.      Where no provision is made for a two-tier system in relation to cooperatives with registered offices within its territory, a Member State may adopt the appropriate measures in relation to SCEs.

 

Article 38

 

Chairmanship and the calling of meetings of the management organ

 

1.      The management organ shall elect a chairman from among its members, in accordance with the statutes.

 

2.      The chairman shall call a meeting of the management organ under the conditions laid down in the statutes, either on his own initiative or at the request of any member. Any such request shall indicate the reasons for calling the meeting. If no action has been taken in respect of such a request within 15 days, the meeting of the management organ may be called by the member(s) who made the request.

 

Article 39

 

Functions of the supervisory organ; appointment of members

 

1.      The supervisory organ shall supervise the duties performed by the management organ. It may not itself exercise the power to manage the SCE. The supervisory organ may not represent the SCE in dealings with third parties. It shall represent the SCE in dealings with the management organ, or its members, in respect of litigation or the conclusion of contracts.

 

2.      The members of the supervisory organ shall be appointed and removed by the general meeting. The members of the first supervisory organ may, however, be appointed in the statutes. This shall apply without prejudice to any employee participation arrangements determined pursuant to Directive 2003/72/EC.

 

3.      Of the members of the supervisory organ, not more than one quarter of the posts available may be filled by non-user members.

 

4.      The statutes shall lay down the number of members of the supervisory organ or the rules for determining it. A Member State may, however, stipulate the number of members or the composition of the supervisory organ for SCEs having their registered office in its territory or a minimum and/or a maximum number.

 

Article 40

 

Right to information

 

1.      The management organ shall report to the supervisory organ at least once every three months on the progress and foreseeable developments of the SCE's business, taking account of any information relating to undertakings controlled by the SCE that may significantly affect the progress of the SCE's business.

 

2.      In addition to the regular information referred to in paragraph 1, the management organ shall promptly communicate to the supervisory organ any information on events likely to have an appreciable effect on the SCE.

 

3.      The supervisory organ may require the management organ to provide information of any kind, which it needs to exercise supervision in accordance with Article 39(1). A Member State may provide that each member of the supervisory organ also be entitled to this facility.

 

4.      The supervisory organ may undertake or arrange for any investigations necessary for the performance of its duties.

 

5.      Each member of the supervisory organ shall be entitled to examine all information submitted to it.

 

Article 41

 

Chairmanship and the calling of meetings of the supervisory organ

 

1.      The supervisory organ shall elect a chairman from among its members. If half of the members are appointed by employees, only a member appointed by the general meeting may be elected chairman.

 

2.      The chairman shall call a meeting of the supervisory organ under the conditions laid down in the statutes, either on his/her own initiative, or at the request of at least one third of its members, or at the request of the management organ. The request shall indicate the reasons for calling the meeting. If no action has been taken in respect of such a request within 15 days, the meeting of the supervisory organ may be called by those who made the request.


Section 2 - The one-tier system

 

Article 42

 

Functions of the administrative organ; appointment of members

 

1.      The administrative organ shall manage the SCE and shall represent it in dealings with third parties and in legal proceedings. A Member State may provide that a managing director shall be responsible for the current management under the same conditions as for cooperatives that have registered offices within that Member State's territory.

 

2.      The number of members of the administrative organ or the rules for determining it shall be laid down in the statutes of the SCE. However, a Member State may set a minimum and, where necessary, a maximum number of members. Of the members of the administrative organ, not more than one quarter of the posts available may be filled by non-user members.

 

The administrative organ shall, however, consist of at least three members where employee participation is regulated in accordance with Directive 2003/72/EC.

 

3.      The members of the administrative organ, and, where the statutes so provide, their alternate members, shall be appointed by the general meeting. The members of the first administrative organ may, however, be appointed by the statutes. This shall apply without prejudice to any employee participation arrangements determined pursuant to Directive 2003/72/EC.

 

4.      Where no provision is made for a one-tier system in relation to cooperatives with registered offices within its territory, a Member State may adopt the appropriate measures in relation to SCEs.

 

Article 43

 

Intervals between meetings and the right to information

 

1.      The administrative organ shall meet at least once every three months, at intervals laid down in the statutes, to discuss the progress of and foreseeable development of the SCE's business, taking account, where appropriate, of any information relating to undertakings controlled by the SCE that may significantly affect the progress of the SCE's business.

 

2.      Each member of the administrative organ shall be entitled to examine all reports, documents and information submitted to it.

 

Article 44

 

Chairmanship and the calling of meetings of the administrative organ

 

1.      The administrative organ shall elect a chairman from among its members. If half of the members are appointed by employees, only a member appointed by the general meeting may be elected chairman.

 

2.      The chairman shall call a meeting of the administrative organ under the conditions laid down in the statutes, either on his/her own initiative or at the request of at least one third of its members. The request must indicate the reasons for calling the meeting. If no action has been taken in respect of such a request within 15 days, the meeting of the administrative organ may be called by those who made the request.

 

Section 3 - Rules common to the one-tier and two-tier systems

 

Article 45

 

Term of office

 

1.      Members of SCE organs shall be appointed for a period laid down in the statutes not exceeding six years.

 

2.      Subject to any restrictions laid down in the statutes, members may be re-appointed once or more than once for the period determined in accordance with paragraph 1.

 

Article 46

 

Conditions of membership

 

1.      An SCE's statutes may permit a company within the meaning of Article 48 of the Treaty to be a member of one of its organs, provided that the law applicable to cooperatives in the Member State in which the SCE's registered office is situated does not provide otherwise.

 

That company shall designate a natural person as its representative to exercise its functions on the organ in question. The representative shall be subject to the same conditions and obligations as if he/she were personally a member of the organ.

 

2.      No person may be a member of any SCE organ or a representative of a member within the meaning of paragraph 1 who:

 

—     is disqualified, under the law of the Member State in which the SCE's registered office is situated, from serving on the corresponding organ of a cooperative governed by the law of that State, or

 

—     is disqualified from serving on the corresponding organ of a cooperative governed by the law of a Member State owing to a judicial or administrative decision delivered in a Member State.

 

3.      An SCE's statutes may, in accordance with the law applicable to cooperatives in the Member State, lay down special conditions of eligibility for members representing the administrative organ.


Article 47

 

Power of representation and liability of the SCE

 

1.      Where the authority to represent the SCE in dealings with third parties, in accordance with Articles 37(1) and 42(1), is conferred on two or more members, those members shall exercise that authority collectively, unless the law of the Member State in which the SCE's registered office is situated allows the statutes to provide otherwise, in which case such a clause may be relied upon against third parties where it has been disclosed in accordance with Articles 11(5) and 12.

 

2.      Acts performed by an SCE's organs shall bind the SCE vis-à-vis third parties, even where the acts in question are not in accordance with the objects of the SCE, providing they do not exceed the powers conferred on them by the law of the Member State in which the SCE has its registered office or which that law allows to be conferred on them.

 

Member States may, however, provide that the SCE shall not be bound where such acts are outside the objects of the SCE, if it proves that the third party knew that the act was outside those objects or could not in the circumstances have been unaware of it; disclosure of the statutes shall not of itself be sufficient proof thereof.

 

3.      The limits on the powers of the organs of the SCE, arising under the statutes or from a decision of the competent organs, may never be relied on as against third parties, even if they have been disclosed.

 

4.      A Member State may stipulate that the power to represent the SCE may be conferred by the statutes on a single person or on several persons acting jointly. Such legislation may stipulate that this provision of the statutes may be relied on as against third parties provided that it concerns the general power of representation. Whether or not such a provision may be relied on as against third parties shall be governed by the provisions of Article 12.

 

Article 48

 

Operations requiring authorisation

 

1.      An SCE's statutes shall list the categories of transactions requiring:

 

—     under the two-tier system, authorisation from the supervisory organ or the general meeting to the management organ,

 

—     under the one-tier system, an express decision adopted by the administrative organ or authorisation from the general meeting.

 

2.      Paragraph 1 shall apply without prejudice to Article 47.

 

3.      However, a Member State may determine the minimum categories of transactions and the organ which shall give the authorisation which must feature in the statutes of SCEs registered in its territory and/or provide that, under the two-tier system, the supervisory organ may itself determine which categories of transactions are to be subject to authorisation.

 

Article 49

 

Confidentiality

 

The members of an SCE's organs shall be under a duty, even after they have ceased to hold office, not to divulge any information which they have concerning the SCE the disclosure of which might be prejudicial to the cooperative's interests or those of its members, except where such disclosure is required or permitted under national law provisions applicable to cooperatives or companies or is in the public interest.

 

Article 50

 

Conduct of the business of organs

 

1.      Unless otherwise provided by this Regulation or the statutes, the internal rules relating to quorums and decision-taking in SCE organs shall be as follows:

 

(a)     quorum: at least half of the members with voting rights must be present or represented;

 

(b)     decision-taking: a majority of the members with voting rights present or represented.

 

Members who are absent may take part in decisions by authorising another member of the organ or the alternate members who were appointed at the same time to represent them.

 

2.      Where there is no relevant provision in the statutes, the chairman of each organ shall have a casting vote in the event of a tie. There shall be no provision to the contrary in the statutes, however, where half of the supervisory organ consists of employees' representatives.

 

3.      Where employee participation is provided for in accordance with Directive 2003/72/EC, a Member State may provide that the supervisory organ's quorum and decision-making shall, by way of derogation from the provisions referred to in paragraphs 1 and 2, be subject to the rules applicable, under the same conditions, to cooperatives governed by the law of the Member State concerned.

 

Article 51

 

Civil liability

 

Members of management, supervisory and administrative organs shall be liable, in accordance with the provisions applicable to cooperatives in the Member State in which the SCE's registered office is situated, for loss or damage sustained by the SCE following any breach on their part of the legal, statutory or other obligations inherent in their duties.

 

 

 

Section 4 - General meeting

 

Article 52

 

Competence

 

The general meeting shall decide on matters for which it is given sole responsibility by:

 

(a)     this Regulation; or

 

(b)     the legislation of the Member State in which the SCE's registered office is situated, adopted under Directive 2003/72/EC.

 

Furthermore, the general meeting shall decide on matters for which responsibility is given to the general meeting of a cooperative governed by the law of the Member State in which the SCE's registered office is situated, either by the law of that Member State or by the SCE's statutes in accordance with that law.

 

Article 53

 

Conduct of general meetings

 

Without prejudice to the rules laid down in this section, the organisation and conduct of general meetings together with voting procedures shall be governed by the law applicable to cooperatives in the Member State in which the SCE's registered office is situated.

 

Article 54

 

Holding of general meetings

 

1.      An SCE shall hold a general meeting at least once each calendar year, within six months of the end of its financial year, unless the law of the Member State in which the SCE's registered office is situated applicable to cooperatives carrying on the same type of activity as the SCE provides for more frequent meetings. A Member State may, however, provide that the first general meeting may be held at any time in the 18 months following an SCE's incorporation.

 

2.      General meetings may be convened at any time by the management organ or the administrative organ, the supervisory organ or any other organ or competent authority in accordance with the national law applicable to cooperatives in the Member State in which the SCE's registered office is situated. The management organ shall be bound to convene a general meeting at the request of the supervisory organ.

 

3.      The agenda for the general meeting held after the end of the financial year shall include at least the approval of the annual accounts and the allocation of profits.

 

4.      The general meeting may in the course of a meeting decide that a further meeting be convened and set the date and the agenda.

 

Article 55

 

Meeting called by a minority of members

 

Members of the SCE who together number more than 5 000, or who have at least 10 % of the total number of the votes, may require the SCE to convene a general meeting and may draw up its agenda. The above proportions may be reduced by the statutes.

 

Article 56

 

Notice of meeting

 

1.      A general meeting shall be convened by a notice in writing sent by any available means to every person entitled to attend the SCE's general meeting in accordance with Article 58(1) and (2) and the provisions of the statutes. That notice may be given by publication in the official internal publication of the SCE.

 

2.      The notice calling a general meeting shall give at least the following particulars:

 

—     the name and registered office of the SCE,

 

—     the venue, date and time of the meeting,

 

—     where appropriate, the type of general meeting,

 

—     the agenda, indicating the subjects to be discussed and the proposals for decisions.

 

3.      The period between the date of dispatch of the notice referred to in paragraph 1 and the date of the opening of the general meeting shall be at least 30 days. It may, however, be reduced to 15 days in urgent cases. Where Article 61(4) is applied, relating to quorum requirements, the time between a first and second meeting convened to consider the same agenda may be reduced according to the law of the Member State in which the SCE has its registered office.

 

Article 57

 

Additions to the agenda

 

Members of the SCE who together number more than 5 000, or who have at least 10 % of the total number of the votes, may require that one or more additional items be put on the agenda of any general meeting. The above proportions may be reduced by the statutes.

 

Article 58

 

Attendance and proxies

 

1.      Every member shall be entitled to speak and vote at general meetings on the points that are included in the agenda.

 

2.      Members of the SCE's organs and holders of securities other than shares and debentures within the meaning of Article 64 and, if the statutes allow, any other person entitled to do so under the law of the State in which the SCE's registered office is situated may attend a general meeting without voting rights.

 

3.      A person entitled to vote shall be entitled to appoint a proxy to represent him/her at a general meeting in accordance with procedures laid down in the statutes.

 

The statutes shall lay down the maximum number of persons for whom a proxy may act.

 

4.      The statutes may permit postal voting or electronic voting, in which case they shall lay down the necessary procedures.

 

Article 59

 

Voting rights

 

1.      Each member of an SCE shall have one vote, regardless of the number of shares he holds.

 

2.      If the law of the Member State in which the SCE has its registered office so permits, the statutes may provide for a member to have a number of votes determined by his/her participation in the cooperative activity other than by way of capital contribution. This attribution shall not exceed five votes per member or 30 % of total voting rights, whichever is the lower.

 

If the law of the Member State in which the SCE has its registered office so permits, SCEs involved in financial or insurance activities may provide in their statutes for the number of votes to be determined by the members' participation in the cooperative activity including participation in the capital of the SCE. This attribution shall not exceed five votes per member or 20 % of total voting rights, whichever is the lower.

 

In SCEs the majority of members of which are cooperatives, if the law of the Member State in which the SCE has its registered office so permits, the statutes may provide for the number of votes to be determined in accordance with the members' participation in the cooperative activity including participation in the capital of the SCE and/or by the number of members of each comprising entity.

 

3.      As regards voting rights which the statutes may allocate to non-user (investor) members, the SCE shall be governed by the law of the Member State in which the SCE has its registered office. Nevertheless, non-user (investor) members may not together have voting rights amounting to more than 25 % of total voting rights.

 

4.      If, on the entry into force of this Regulation, the law of the Member State where an SCE has its registered office so permits, the statutes of that SCE may provide for the participation of employees' representatives in the general meetings or in the section or sectorial meetings, provided that the employees' representatives do not together control more than 15 % of total voting rights. Such rights shall cease to apply as soon as the registered office of the SCE is transferred to a Member State whose law does not provide for such participation.

 

Article 60

 

Right to information

 

1.      Every member who so requests at a general meeting shall be entitled to obtain information from the management or administrative organ on the affairs of the SCE arising from items on which the general meeting may take a decision in accordance with Article 61(1). In so far as possible, information shall be provided at the general meeting in question.

 

2.      The management or administrative organ may refuse to supply such information only where:

 

—     it would be likely to be seriously prejudicial to the SCE,

 

—     its disclosure would be incompatible with a legal obligation of confidentiality.

 

3.      A member refused information may require that his/her question and the grounds for refusal be entered in the minutes of the general meeting.

 

4.      Within the 10 days preceding the general meeting required to decide on the end of the financial year, members may examine the balance sheet, the profit-and-loss account and the notes thereon, the management report, the conclusion of the audit of the accounts by the person responsible and, where a parent company within the meaning of Directive 83/349/EEC is concerned, the consolidated accounts.

 

Article 61

 

Decisions

 

1.      A general meeting may pass resolutions on items on its agenda. A general meeting may also deliberate and pass resolutions concerning items placed on the agenda of the meeting by a minority of members in accordance with Article 57.

 

2.      A general meeting shall act by majority of the votes validly cast by the members present or represented.

 

3.      The statutes shall lay down the quorum and majority requirements which are to apply to general meetings.

 

Where the statutes provide for the possibility of an SCE to admit investor (non-user) members, or to allocate votes according to capital contribution in SCEs involved in financial or insurance activities, the statutes shall also lay down special quorum requirements with relation to members other than investor (non-user) members or members that have voting rights according to capital contribution in SCEs involved in financial or insurance activities. Member States shall be free to set the minimum level of such special quorum requirements for those SCEs having their registered office in their territory.

 

4.      A general meeting may amend the statutes the first time it is convened only if the members present or represented make up at least half of the total number of members on the date the general meeting is convened, and the second time it is convened on the same agenda no quorum shall be necessary.

 

In the cases referred to in the first subparagraph, at least two thirds of the votes cast validly must be cast in favour, unless the law applicable to cooperatives in the Member State in which the SCE's registered office is situated requires a greater majority.

 

Article 62

 

Minutes

 

1.      Minutes shall be drawn up for every general meeting. The minutes shall include at least the following particulars:

 

—     the venue and date of the meeting,

 

—     the resolutions passed,

 

—     the result of the voting.

 

2.      The attendance list, the documents relating to the convening of the general meeting and the reports submitted to the members on the items on the agenda shall be annexed to the minutes.

 

3.      The minutes and the documents annexed thereto shall be preserved for at least five years. A copy of the minutes and the documents annexed thereto may be obtained by any member upon request against defrayal of the administrative cost.

 

4.      The minutes shall be signed by the chairman of the meeting.

 

Article 63

 

Sectorial or section meetings

 

1.      Where the SCE undertakes different activities or activities in more than one territorial unit, or has several establishments or more than 500 members, its statutes may provide for sectorial or section meetings, if permitted by the relevant Member State legislation. The statutes shall establish the division in sectors or sections and the number of delegates thereof.

 

2.      The sectorial or section meetings shall elect their delegates for a maximum period of four years, unless early revocation takes place. Delegates so elected shall constitute the general meeting of the SCE and shall represent therein their sector or section to which they shall report on the outcome of the general meeting. The provisions of Section 4 of Chapter III shall be applied to the workings of the sectorial and section meetings.

 

 

 

CHAPTER IV

 

ISSUE OF SHARES CONFERRING SPECIAL ADVANTAGE

 

Article 64

 

Securities other than shares and debentures conferring special advantages

 

1.      An SCE's statutes may provide for the issue of securities other than shares, or debentures the holders of which are to have no voting rights. These may be subscribed for by members or by non-members. Their acquisition does not confer the status of member. The statutes shall also lay down the procedure for redemption.

 

2.      Holders of securities or debentures referred to in paragraph 1 may be given special advantages in accordance with the statutes or the conditions laid down when they are issued.

 

3.      The total nominal value of securities or debentures referred to in paragraph 1 held may not exceed the figure laid down in the statutes.

 

4.      Without prejudice to the right to attend the general meeting provided for in Article 58(2), the statutes may provide for special meetings of holders of securities or debentures referred to in paragraph 1. Before any decision of the general meeting is taken relating to the rights and interests of such holders, a special meeting may state its opinion, which shall be brought to the attention of the general meeting by the representatives which the special meeting appoints.

 

The opinion referred to in the first subparagraph shall be recorded in the minutes of the general meeting.

 

 

 

CHAPTER V

 

ALLOCATION OF PROFITS

 

Article 65

 

Legal reserve

 

1.      Without prejudice to mandatory provisions of national laws, the statutes shall lay down rules for the allocation of the surplus for each financial year.

 

2.      Where there is such a surplus, the statutes shall require the establishment of a legal reserve funded out of the surplus before any other allocation.

 

Until such time as the legal reserve is equal to the capital referred to in Article 3(2), the amount allocated to it may not be less than 15 % of the surplus for the financial year after deduction of any losses carried over.

 

3.      Members leaving the SCE shall have no claim against the sums thus allocated to the legal reserve.

 

Article 66

 

Dividend

 

The statutes may provide for the payment of a dividend to members in proportion to their business with the SCE, or the services they have performed for it.

 

Article 67

 

Allocation of available surplus

 

1.      The balance of the surplus after deduction of the allocation to the legal reserve, of any sums paid out in dividends and of any losses carried over, with the addition of any surpluses carried over and of any sums drawn from the reserves, shall constitute the profits available for distribution.

 

2.      The general meeting which considers the accounts for the financial year may allocate the surplus in the order and proportions laid down in the statutes, and in particular:

 

—     carry them forward,

 

—     appropriate them to any legal or statutory reserve fund,

 

—     provide a return on paid-up capital and quasi-equity, payment being made in cash or shares.

 

3.      The statutes may also prohibit any distribution.

 

 

 

CHAPTER VI

 

ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS

 

Article 68

 

Preparation of annual accounts and consolidated accounts

 

1.      For the purposes of drawing up its annual accounts and its consolidated accounts if any, including the annual report accompanying them and their auditing and publication, an SCE shall be subject to the legal provisions adopted in the Member State in which it has its registered office in implementation of Directives 78/660/EEC and 83/349/EEC. However, Member States may provide for amendments to the national provisions implementing those Directives to take account of the specific features of cooperatives.

 

2.      Where an SCE is not subject, under the law of the Member State in which the SCE has its registered office, to a publication requirement such as provided for in Article 3 of Directive 68/151/EEC, the SCE must at least make the documents relating to annual accounts available to the public at its registered office. Copies of those documents must be obtainable on request. The price charged for such copies shall not exceed their administrative cost.

 

3.      An SCE must draw up its annual accounts and its consolidated accounts if any in the national currency. An SCE whose registered office is outside the euro area may also express its annual accounts and, where appropriate, consolidated accounts, in euro. In that event, the bases of conversion used to express in euro those items included in the accounts which are or were originally expressed in another currency shall be disclosed in the notes on the accounts.

 

Article 69

 

Accounts of SCEs with credit or financial activities

 

1.      An SCE which is a credit or financial institution shall be governed by the rules laid down in the national law of the Member State in which its registered office is situated under directives relating to the taking up and pursuit of the business of credit institutions as regards the preparation of its annual and, where appropriate, consolidated accounts, including the accompanying annual report and the auditing and publication of those accounts.

 

2.      An SCE which is an insurance undertaking shall be governed by the rules laid down in the national law of the Member State in which its registered office is situated under directives as regards the preparation of its annual and, where appropriate, consolidated accounts including the accompanying annual report and the auditing and publication of those accounts.

 

Article 70

 

Auditing

 

The statutory audit of an SCE's annual accounts and its consolidated accounts if any shall be carried out by one or more persons authorised to do so in the Member State in which the SCE has its registered office in accordance with the measures adopted in that State pursuant to Directives 84/253/EEC and 89/48/EEC.

 

Article 71

 

System of auditing

 

Where the law of a Member State requires all cooperatives, or a certain type of them, covered by the law of that State to join a legally authorised external body and to submit to a specific system of auditing carried out by that body, the arrangements shall automatically apply to an SCE with its registered office in that Member State provided that this body meets the requirements of Directive 84/253/EEC.

 

 

 

CHAPTER VII

 

WINDING UP; LIQUIDATION; INSOLVENCY AND CESSATION OF PAYMENTS

 

Article 72

 

Winding-up, insolvency and similar procedures

 

As regards winding-up, liquidation, insolvency, cessation of payments and similar procedures, an SCE shall be governed by the legal provisions which would apply to a cooperative formed in accordance with the law of the Member State in which its registered office is situated, including provisions relating to decision-making by the general meeting.

 

Article 73

 

Winding-up by the court or other competent authority of the Member State where the SCE has its registered office

 

1.      On an application by any person with a legitimate interest or any competent authority, the court or any competent administrative authority of the Member State where the SCE has its registered office shall order the SCE to be wound up where it finds that there has been a breach of Article 2(1) and/or Article 3(2) and in the cases covered by Article 34.

 

The court or the competent administrative authority may allow the SCE time to rectify the situation. If it fails to do so within the time allowed, the court or the competent administrative authority shall order it to be wound up.

 

2.      When an SCE no longer complies with the requirement laid down in Article 6, the Member State in which the SCE's registered office is situated shall take appropriate measures to oblige the SCE to regularise its situation within a specified period either:

 

—     by re-establishing its head office in the Member State in which its registered office is situated, or

 

—     by transferring the registered office by means of the procedure laid down in Article 7.

 

3.      The Member State in which the SCE's registered office is situated shall put in place the measures necessary to ensure that an SCE which fails to regularise its position in accordance with paragraph 2 is liquidated.

 

4.      The Member State in which the SCE's registered office is situated shall set up a judicial or other appropriate remedy with regard to any established infringement of Article 6. That remedy shall have suspensory effect on the procedures laid down in paragraphs 2 and 3.

 

5.      Where it is established on the initiative of either the authorities or any interested party that an SCE has its head office within the territory of a Member State in breach of Article 6, the authorities of that Member State shall immediately inform the Member State in which the SCE's registered office is situated.

 

Article 74

 

Publication of winding-up

 

Without prejudice to provisions of national law requiring additional publication, the initiation and termination of winding-up including voluntary winding-up, liquidation, insolvency or suspension of payment procedures and any decision to continue operating shall be publicised in accordance with Article 12.

 

Article 75

 

Distribution

 

Net assets shall be distributed in accordance with the principle of disinterested distribution, or, where permitted by the law of the Member State in which the SCE has its registered office, in accordance with an alternative arrangement set out in the statutes of the SCE. For the purposes of this Article, net assets shall comprise residual assets after payment of all amounts due to creditors and reimbursement of members' capital contributions.

 

Article 76

 

Conversion into a cooperative

 

1.      An SCE may be converted into a cooperative governed by the law of the Member State in which its registered office is situated. No decision on conversion may be taken before two years have elapsed since its registration or before the first two sets of annual accounts have been approved.

 

2.      The conversion of an SCE into a cooperative shall not result in winding-up or in the creation of a new legal person.

 

3.      The management or administrative organ of the SCE shall draw up draft terms of conversion and a report explaining and justifying the legal and economic aspects as well as the employment effects of the conversion and indicating the implications of the adoption of the cooperative form for members and holders of shares referred to in Article 14 and for employees.

 

4.      The draft terms of conversion shall be made public in the manner laid down in each Member State's law at least one month before the general meeting called to decide on conversion.

 

5.      Before the general meeting referred to in paragraph 6, one or more independent experts appointed or approved, in accordance with the national provisions, by a judicial or administrative authority in the Member State to which the SCE being converted into a cooperative is subject, shall certify that the latter has assets at least equivalent to its capital.

 

6.      The general meeting of the SCE shall approve the draft terms of conversion together with the statutes of the cooperative. The decision of the general meeting shall be passed as laid down in the provisions of national law.

 

CHAPTER VIII

 

ADDITIONAL AND TRANSITIONAL PROVISIONS

 

Article 77

 

Economic and monetary union

 

1.      If and so long as the third phase of EMU does not apply to it, each Member State may make SCEs with registered offices within its territory subject to the same provisions as apply to cooperatives or public limited-liability companies covered by its legislation as regards the expression of their capital. An SCE may, in any case, express its capital in euro as well. In that event the national currency/euro conversion rate shall be that for the last day of the month preceding that of the formation of the SCE.

 

2.      If and so long as the third phase of EMU does not apply to the Member State in which an SCE has its registered office, the SCE may, however, prepare and publish its annual and, where appropriate, consolidated accounts in euro. The Member State may require that the SCE's annual and, where appropriate, consolidated accounts be prepared and published in the national currency under the same conditions as those laid down for cooperatives and public limited-liability companies governed by the law of that Member State. This shall not prejudge the additional possibility for an SCE of publishing its annual and, where appropriate, consolidated accounts in euro in accordance with Council Directive 90/604/EEC of 8 November 1990 amending Directive 78/660/EEC on annual accounts and Directive 83/349/EEC on consolidated accounts as concerns the exemptions for small and medium-sized companies and the publication of accounts in ecu[20].

 

 

 

CHAPTER IX

 

FINAL PROVISIONS

 

Article 78

 

National implementing rules

 

1.      Member States shall make such provision as is appropriate to ensure the effective application of this Regulation.

 

2.      Each Member State shall designate the competent authorities within the meaning of Articles 7, 21, 29, 30, 54 and 73. It shall inform the Commission and the other Member States accordingly.


Article 79

 

Review of the Regulation

 

Five years at the latest after the entry into force of this Regulation, the Commission shall forward to the European Parliament and to the Council a report on the application of the Regulation and proposals for amendments, where appropriate. The report shall, in particular, analyse the appropriateness of:

 

(a)     allowing the location of an SCE's head office and registered office in different Member States;

 

(b)     allowing provisions in the statutes of an SCE adopted by a Member State in execution of authorisations given to the Member States by this Regulation or laws adopted to ensure the effective application of this Regulation with regard to the SCE which deviate from, or are complementary to, these laws, even when such provisions would not be authorised in the statutes of a cooperative having its registered office in the Member State;

 

(c)     allowing provisions which enable the SCE to split into two or more national cooperatives;

 

(d)    allowing for specific legal remedies in the case of fraud or error during the registration of an SCE established by way of merger.

 

Article 80

 

Entry into force

 

This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Union.

 

It shall apply from 18 August 2006.

 

This Regulation shall be binding in its entirety and directly applicable in all Member States.

 

 

 

 

 



[1]       OJ C 99, 21.4.1992, p. 17 and OJ C 236, 31.8.1993, p. 17.

[2]       OJ C 42, 15.2.1993, p. 75 and opinion delivered on 14 May 2003 (not yet published in the Official Journal).

[3]       OJ C 223, 31.8.1992, p. 42.

[4]       OJ C 128, 16.5.1983, p. 51.

[5]       OJ C 246, 14.9.1987, p. 94.

[6]       OJ C 158, 26.6.1989, p. 380.

[7]       OJ C 61, 28.2.1994, p. 231.

[8]       OJ C 313, 12.10.1998, p. 234.

[9]       OJ L 294, 10.11.2001, p. 1.

[10]     OJ L 199, 31.7.1985, p. 1.

[11]     Resolution adopted by the General Assembly of the 88th plenary meeting of the United Nations, 19 December 2001 (A/RES/56/114).

[12]     See page 25 of this Official Journal.

[13]     OJ L 65, 14.3.1968, p. 8; Directive as last amended by the 1994 Act of Accession.

[14]     OJ L 222, 14.8.1978, p. 11; Directive as last amended by Directive 2001/65/EC (OJ L 283, 27.10.2001, p. 28).

[15]     OJ L 193, 18.7.1983, p. 1; Directive as last amended by Directive 2001/65/EC.

[16]     OJ L 126, 12.5.1984, p. 20.

[17]     OJ L 395, 30.12.1989, p. 36.

[18]     OJ L 372, 31.12.1986; Directive as last amended by Directive 2001/65/EC.

[19]     OJ L 228, 11.8.1992, p. 1; Directive as last amended by Directive 2002/13/EC (OJ L 77, 20.3.2002, p. 17).

[20]     OJ L 317, 16.11.1990, p. 57.

 

 

Avis juridique important

 

|

 

Commission notice on the application of the State aid rules to measures relating to direct business taxation

 

(98/C 384/03)

 

(Text with EEA relevance)

 

 

 

Introduction

 

1.    On 1 December 1997, following a wide-ranging discussion on the need for coordinated action at Community level to tackle harmful tax competition, the Council (Ecofin) adopted a series of conclusions and agreed a resolution on a code of conduct for business taxation (hereinafter 'code of conduct`)[1]. On that occasion, the Commission undertook to draw up guidelines on the application of Articles 92 and 93 of the Treaty to measures relating to direct business taxation and committed itself 'to the strict application of the aid rules concerned`. The code of conduct aims to improve transparency in the tax area through a system of information exchanges between Member States and of assessment of any tax measures that may be covered by it. For their part, the State aid provisions of the Treaty will also contribute through their own mechanism to the objective of tackling harmful tax competition.

 

2.    The Commission's undertaking regarding State aid in the form of tax measures forms part of the wider objective of clarifying and reinforcing the application of the State aid rules in order to reduce distortions of competition in the single market. The principle of incompatibility with the common market and the derogations from that principle apply to aid 'in any form whatsoever`, including certain tax measures. However, the question whether a tax measure can be qualified as aid under Article 92(1) of the Treaty calls for clarification which this notice proposes to provide. Such clarification is particularly important in view of the procedural requirements that stem from designation as aid and of the consequences where Member States fail to comply with such requirements.

 

3.    Following the completion of the single market and the liberalisation of capital movements, it has also become apparent that there is a need to examine the particular effects of aid granted in the form of tax measures and to spell out the consequences as regards assessment of the aid's compatibility with the common market[2]. The establishment of economic and monetary union and the consolidation of national budgets which it entails will make it even more essential to have strict control of State aid in whatever form it may take. Similarly, account must also be taken, in the common interest, of the major repercussions which some aid granted through tax systems may have on the revenue of other Member States.

 

4.    In addition to the objective of ensuring that Commission decisions are transparent and predictable, this notice also aims to ensure consistency and equality of treatment between Member States. The Commission intends, as the code of conduct notes, to examine or re-examine case by case, on the basis of this notice, the tax arrangements in force in the Member States.

 

A. Community powers of action

 

5.    The Treaty empowers the Community to take measures to eliminate various types of distortion that harm the proper functioning of the common market. It is thus essential to distinguish between the different types of distortion.

 

6.    Some general tax measures may impede the proper functioning of the internal market. In the case of such measures, the Treaty provides, on the one hand, for the possibility of harmonising Member States' tax provisions on the basis of Article 100 (Council directives, adopted unanimously). On the other, some disparities between planned or existing general provisions in Member States may distort competition and create distortions that need to be eliminated on the basis of Articles 101 and 102 (consultation of the relevant Member States by the Commission; if necessary, Council directives adopted by a qualified majority).

 

7.    The distortions of competition deriving from State aid fall under a system of prior Commission authorisation, subject to review by the Community judicature. Pursuant to Article 93(3), State aid measures must be notified to the Commission. Member States may not put their proposed aid measures into effect until the Commission has approved them. The Commission examines the compatibility of aid not in terms of the form which it may take, but in terms of its effect. It may decide that the Member State must amend or abolish aid which the Commission finds to be incompatible with the common market. Where aid has already been implemented in breach of the procedural rules, the Member State must in principle recover it from the recipient(s).

 

 

 

B. Application of Article 92(1) of the EC Treaty to tax measures

 

8.    Article 92(1) states that 'any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market`. In applying the Community rules on State aid, it is irrelevant whether the measure is a tax measure, since Article 92 applies to aid measures 'in any form whatsoever`. To be termed aid, within the meaning of Article 92, a measure must meet the cumulative criteria described below.

 

9.    Firstly, the measure must confer on recipients an advantage which relieves them of charges that are normally borne from their budgets. The advantage may be provided through a reduction in the firm's tax burden in various ways, including:

 

-      a reduction in the tax base (such as special deductions, special or accelerated depreciation arrangements or the entering of reserves on the balance sheet),

 

-      a total or partial reduction in the amount of tax (such as exemption or a tax credit),

 

-      deferment, cancellation or even special rescheduling of tax debt.

 

10.   Secondly, the advantage must be granted by the State or through State resources. A loss of tax revenue is equivalent to consumption of State resources in the form of fiscal expenditure. This criterion also applies to aid granted by regional or local bodies in the Member States[3]. Furthermore, State support may be provided just as much through tax provisions of a legislative, regulatory or administrative nature as through the practices of the tax authorities.

 

11.   Thirdly, the measure must affect competition and trade between Member States. This criterion presupposes that the beneficiary of the measure exercises an economic activity, regardless of the beneficiary's legal status or means of financing. Under settled case-law, for the purposes of this provision, the criterion of trade being affected is met if the recipient firm carries on an economic activity involving trade between Member States. The mere fact that the aid strengthens the firm's position compared with that of other firms which are competitors in intra-Community trade is enough to allow the conclusion to be drawn that intra-Community trade is affected. Neither the fact that aid is relatively small in amount[4], nor the fact that the recipient is moderate in size or its share of the Community market very small[5], nor indeed the fact that the recipient does not carry out exports[6] or exports virtually all its production outside the Community[7] do anything to alter this conclusion.

 

12.   Lastly, the measure must be specific or selective in that it favours 'certain undertakings or the production of certain goods`. The selective advantage involved here may derive from an exception to the tax provisions of a legislative, regulatory or administrative nature or from a discretionary practice on the part of the tax authorities. However, the selective nature of a measure may be justified by 'the nature or general scheme of the system`[8]. If so, the measure is not considered to be aid within the meaning of Article 92(1) of the Treaty. These various aspects are looked at below.

 

Distinction between State aid and general measures

 

13.   Tax measures which are open to all economic agents operating within a Member State are in principle general measures. They must be effectively open to all firms on an equal access basis, and they may not de facto be reduced in scope through, for example, the discretionary power of the State to grant them or through other factors that restrict their practical effect. However, this condition does not restrict the power of Member States to decide on the economic policy which they consider most appropriate and, in particular, to spread the tax burden as they see fit across the different factors of production. Provided that they apply without distinction to all firms and to the production of all goods, the following measures do not constitute State aid:

 

-      tax measures of a purely technical nature (for example, setting the rate of taxation, depreciation rules and rules on loss carry-overs; provisions to prevent double taxation or tax avoidance),

 

-      measures pursuing general economic policy objectives through a reduction of the tax burden related to certain production costs (research and development (R& D), the environment, training, employment).

 

14.   The fact that some firms or some sectors benefit more than others from some of these tax measures does not necessarily mean that they are caught by the competition rules governing State aid. Thus, measures designed to reduce the taxation of labour for all firms have a relatively greater effect on labour-intensive industries than on capital-intensive industries, without necessarily constituting State aid. Similarly, tax incentives for environmental, R& D or training investment favour only the firms which undertake such investment, but again do not necessarily constitute State aid.

 

15.   In a judgment delivered in 1974[9], the Court of Justice held that any measure intended partially or wholly to exempt firms in a particular sector from the charges arising from the normal application of the general system 'without there being any justification for this exemption on the basis of the nature or general scheme of this system` constituted State aid. The judgment also states that 'Article 92 does not distinguish between the measures of State intervention concerned by reference to their causes or aims but defines them in relation to their effects`. The judgment also points out that the fact that the measure brings charges in the relevant sector more into line with those of its competitors in other Member States does not alter the fact that it is aid. Such divergences between tax systems, which, as pointed out above, are covered by Articles 100 to 102, cannot be corrected by unilateral measures that target the firms which are most affected by the disparities between tax systems.

 

16.   The main criterion in applying Article 92(1) to a tax measure is therefore that the measure provides in favour of certain undertakings in the Member State an exception to the application of the tax system. The common system applicable should thus first be determined. It must then be examined whether the exception to the system or differentiations within that system are justified 'by the nature or general scheme` of the tax system, that is to say, whether they derive directly from the basic or guiding principles of the tax system in the Member State concerned. If this is not the case, then State aid is involved.

 

The selectivity or specificity criterion

 

17.   The Commission's decision-making practice so far shows that only measures whose scope extends to the entire territory of the State escape the specificity criterion laid down in Article 92(1). Measures which are regional or local in scope may favour certain undertakings, subject to the principles outlined in paragraph 16. The Treaty itself qualifies as aid measures which are intended to promote the economic development of a region. Article 92(3)(a) and (c) explicitly provides, in the case of this type of aid, for possible derogations from the general principle of incompatibility laid down in Article 92(1).

 

18.   The Treaty clearly provides that a measure which is sectorally specific is caught by Article 92(1). Article 92(1) expressly includes the phrase 'the production of certain goods` among the criteria determining whether there is aid that is subject to Commission monitoring. According to well-established practice and case-law, a tax measure whose main effect is to promote one or more sectors of activity constitutes aid. The same applies to a measure that favours only national products which are exported[10]. Furthermore, the Commission has taken the view that a measure which targets all of the sectors that are subject to international competition constitutes aid[11]. A derogation from the base rate of corporation tax for an entire section of the economy therefore constitutes, except for certain cases[12], State aid, as the Commission decided for a measure concerning the whole of the manufacturing sector[13].

 

19.   In several Member States, different tax rules apply depending on the status of the undertakings. Some public undertakings, for example, are exempt from local taxes or from company taxes. Such rules, which accord preferential treatment to undertakings having the legal status of public undertaking and carrying out an economic activity, may constitute State aid within the meaning of Article 92 of the Treaty.

 

20.   Some tax benefits are on occasion restricted to certain types of undertaking, to some of their functions (intra-group services, intermediation or coordination) or to the production of certain goods. In so far as they favour certain undertakings or the production of certain goods, they may constitute State aid as referred to in Article 92(1).

 

Discretionary administrative practices

 

21.   The discretionary practices of some tax authorities may also give rise to measures that are caught by Article 92. The Court of Justice acknowledges that treating economic agents on a discretionary basis may mean that the individual application of a general measure takes on the features of a selective measure, in particular where exercise of the discretionary power goes beyond the simple management of tax revenue by reference to objective criteria[14].

 

22.   If in daily practice tax rules need to be interpreted, they cannot leave room for a discretionary treatment of undertakings. Every decision of the administration that departs from the general tax rules to the benefit of individual undertakings in principle leads to a presumption of State aid and must be analysed in detail. As far as administrative rulings merely contain an interpretation of general rules, they do not give rise to a presumption of aid. However, the opacity of the decisions taken by the authorities and the room for manoeuvre which they sometimes enjoy support the presumption that such is at any rate their effect in some instances. This does not make Member States any less able to provide their taxpayers with legal certainty and predictability on the application of general tax rules.

 

Justification of a derogation by 'the nature or general scheme of the system`

 

23.   The differential nature of some measures does not necessarily mean that they must be considered to be State aid. This is the case with measures whose economic rationale makes them necessary to the functioning and effectiveness of the tax system[15]. However, it is up to the Member State to provide such justification.

 

24.   The progressive nature of an income tax scale or profit tax scale is justified by the redistributive purpose of the tax. Calculation of asset depreciation and stock valuation methods vary from one Member State to another, but such methods may be inherent in the tax systems to which they belong. In the same way, the arrangements for the collection of fiscal debts can differ from one Member State to the other. Lastly, some conditions may be justified by objective differences between taxpayers. However, if the tax authority has discretionary freedom to set different depreciation periods or different valuation methods, firm by firm, sector by sector, there is a presumption of aid. Such a presumption also exists when the fiscal administration handles fiscal debts on a case by case basis with an objective different from the objective of optimising the recovery of tax debts from the enterprise concerned.

 

25.   Obviously, profit tax cannot be levied if no profit is earned. It may thus be justified by the nature of the tax system that non-profit-making undertakings, such as foundations or associations, are specifically exempt from the taxes on profits if they cannot actually earn any profits. Furthermore, it may also be justified by the nature of the tax system that cooperatives which distribute all their profits to their members are not taxed at the level of the cooperative when tax is levied at the level of their members.

 

26.   A distinction must be made between, on the one hand, the external objectives assigned to a particular tax scheme (in particular, social or regional objectives) and, on the other, the objectives which are inherent in the tax system itself. The whole purpose of the tax system is to collect revenue to finance State expenditure. Each firm is supposed to pay tax once only. It is therefore inherent in the logic of the tax system that taxes paid in the State in which the firm is resident for tax purposes should be taken into account. Certain exceptions to the tax rules are, however, difficult to justify by the logic of a tax system. This is, for example, the case if non-resident companies are treated more favourably than resident ones or if tax benefits are granted to head offices or to firms providing certain services (for example, financial services) within a group.

 

27.   Specific provisions that do not contain discretionary elements, allowing for example tax to be determined on a fixed basis (for example, in the agriculture or fisheries sectors), may be justified by the nature and general scheme of the system where, for example, they take account of specific accounting requirements or of the importance of land in assets which are specific to certain sectors; such provisions do not therefore constitute State aid. Lastly, the logic underlying certain specific provisions on the taxation of small and medium-sized enterprises (including small agricultural enterprises[16]) is comparable to that underlying the progressiveness of a tax scale.

 

 

 

C. Compatibility with the common market of State aid in the form of tax measures

 

28.   If a tax measure constitutes aid that is caught by Article 92(1), it can nevertheless, like aid granted in other forms, qualify for one of the derogations from the principle of incompatibility with the common market provided for in Article 92(2) and (3). Furthermore, where the recipient, whether a private or public undertaking, has been entrusted by the State with the operation of services of general economic interest, the aid may also qualify for application of the provisions of Article 90 of the Treaty[17].

 

29.   The Commission could not, however, authorise aid which proved to be in breach both of the rules laid down in the Treaty, particularly those relating to the ban on discrimination and to the right of establishment, and of the provisions of secondary law on taxation[18]. Such aspects may, in parallel, be the object of a separate procedure on the basis of Article 169. As is clear from case-law, those aspects of aid which are indissolubly linked to the object of the aid and which contravene specific provisions of the Treaty other than Articles 92 and 93 must however be examined in the light of the procedure under Article 93 as part of an overall examination of the compatibility or the incompatibility of the aid.

 

30.   The qualification of a tax measure as harmful under the code of conduct does not affect its possible qualification as a State aid. However the assessment of the compatibility of fiscal aid with the common market will have to be made, taking into account, inter alia, the effects of aid that are brought to light in the application of the code of conduct.

 

31.   Where a fiscal aid is granted in order to provide an incentive for firms to embark on certain specific projects (investment in particular) and where its intensity is limited with respect to the costs of carrying out the project, it is no different from a subsidy and may be accorded the same treatment. Nevertheless, such arrangements must lay down sufficiently transparent rules to enable the benefit conferred to be quantified.

 

32.   In most cases, however, tax relief provisions are general in nature: they are not linked to the carrying-out of specific projects and reduce a firm's current expenditure without it being possible to assess the precise volume involved when the Commission carries out its ex ante examination. Such measures constitute 'operating aid`. Operating aid is in principle prohibited. The Commission authorises it at present only in exceptional cases and subject to certain conditions, for example in shipbuilding, certain types of environmental protection aid[19] and in regions, including ultra-peripheral regions, covered by the Article 92(3)(a) aid derogation provided that they are duly justified and their level is proportional to the handicaps they are intended to offset[20]. It must in principle (with the exception of the two categories of aid mentioned below) be degressive and limited in time. At present, operating aid can also be authorised in the form of transport aid in ultra-peripheral regions and in certain Nordic regions that are sparsely populated and are seriously handicapped in terms of accessibility. Operating aid may not be authorised where it represents aid for exports between Member States. As for State aid in favour of the maritime transport sector the specific rules for that sector apply[21].

 

33.   If it is to be considered by the Commission to be compatible with the common market, State aid intended to promote the economic development of particular areas must be 'in proportion to, and targeted at, the aims sought`. For the examination of regional aid the criteria allow account to be taken of other possible effects, in particular of certain effects brought to light by the code of conduct. Where a derogation is granted on the basis of regional criteria, the Commission must ensure in particular that the relevant measures:

 

-      contribute to regional development and relate to activities having a local impact. The establishment of off-shore activities does not, to the extent that their externalities on the local economy are low, normally provide satisfactory support for the local economy,

 

-      relate to real regional handicaps. It is open to question whether there are any real regional handicaps for activities for which the additional costs have little incidence, such as for example the transport costs for financing activities, which lend themselves to tax avoidance,

 

-      are examined in a Community context[22]. The Commission must in this respect take account of any negative effects which such measures may have on other Member States.

 

 


D. Procedures

 

34.   Article 93(3) requires Member States to notify the Commission of all their 'plans to grant or alter aid` and provides that any proposed measures may not be put into effect without the Commission's prior approval. This procedure applies to all aid, including tax aid.

 

35.   If the Commission finds that State aid which has been put into effect in breach of this rule does not qualify for any of the exemptions provided for in the Treaty and is therefore incompatible with the common market, it requires the Member State to recover it, except where that would be contrary to a general principle of Community law, in particular legitimate expectations to which the Commission's behaviour can give rise. In the case of State aid in the form of tax measures, the amount to be covered is calculated on the basis of a comparison between the tax actually paid and the amount which should have been paid if the generally applicable rule had been applied. Interest is added to this basic amount. The interest rate to be applied is equivalent to the reference rate used to calculate the grant equivalent of regional aid.

 

36.   Article 93(1) states that the Commission 'shall in cooperation with Member States, keep under constant review all systems of aid existing in those States`. Such review extends to State aid in the form of tax measures. So as to allow such review to be carried out, the Member States are required to submit to the Commission every year reports on their existing State aid systems. In the case of tax relief or full or partial tax exemption, the reports must provide an estimate of budgetary revenue lost. Following its review, the Commission may, if it considers that the scheme is not or is no longer compatible with the common market, propose that the Member State amend or abolish it.

 

E. Implementation

 

37.   The Commission will, on the basis of the guidelines set out in this notice and as from the time of its publication, examine the plans for tax aid notified to it and tax aid illegally implemented in the Member States and will review existing systems. This notice is published for guidance purposes and is not exhaustive. The Commission will take account of all the specific circumstances in each individual case.

 

38.   The Commission will review the application of this notice two years after its publication.

 



[1]       OJ C 2, 6.1.1998, p. 1.

[2]       See action plan for the single market, CSE(97) 1, 4 June 1997, strategic target 2, action 1.

[3]       Judgment of the Court of Justice in Case 248/84 Germany v. Commission [1987] ECR 4013.

[4]       With the exception, however, of aid meeting the tests of the de minimis rule. See the Commission notice published in OJ C 68, 6.3.1996, p. 9.

[5]       Joined Cases C-278/92, C-279/92 and C-280/92 Spain v. Commission [1994] ECR I-4103.

[6]       Case 102/87 France v. Commission [1998] ECR 4067.

[7]       Case C-142/87 Belgium v. Commission [1990] ECR I-959.

[8]       Case 173/73 Italy v. Commission [1974] ECR 709.

[9]       See footnote 8.

[10]     Joined Cases 6 and 11/69 Commission v. France [1969] ECR 561.

[11]     Commission Decision 97/239/EC of 4 December 1996 in the 'Maribel bis/ter` case (OJ L 95, 10.4.1997, p. 25) (currently sub judice, Case C-75/97).

[12]     In particular, agriculture and fisheries, see paragraph 27.

[13]     Commission decision of 22 July 1998 in the 'Irish corporation tax` case (SG(98) D/7209) not yet published.

[14]     Case C-241/94 France v. Commission (Kimberly Clark Sopalin) [1996] ECR I-4551.

[15]     Commission decision 96/369/EC of 13 March 1996 concerning fiscal aid given to German airlines in the form of a depreciation facility (OJ L 146, 20.6.1996, p. 42).

[16]     Operators in the agricultural sector with no more than 10 annual work units.

[17]     Judgment of the Court of First Instance in Case T-106/95 FFSA and others v. Commission [1997] ECR II-229. Order of the Court of Justice in Case C-174/97 P [1998] I-1303.

[18]     Case 74/76 Iannelli v. Meroni [1977] ECR 557. See also Cases 73/79 'Sovraprezzo` [1980] ECR 1533, T-49/93 'SIDE` [1995] ECR II-2501 and Joined Cases C 142 and 143/80 'Salengo` [1981] ECR 1413.

[19]     Community guidelines on State aid for environmental protection (OJ C 72, 10.3.1994, p. 3).

[20]     Guidelines on national regional aid (OJ C 74, 10.3.1998, p. 9).

[21]     Community guidelines on State aid to maritime transport (OJ C 205, 5.7.1997, p. 5).

[22]     Case 730/79 Philip Morris v. Commission [1980] ECR 2671.

 

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