WHAT IS THE AIM OF THE REGULATION AND THE DIRECTIVE?
- The regulation on the Statute for a European Company introduces a European legal form for public limited-liability companies to be set up within the territory of the EU, known by the Latin name Societas Europaea — hence their acronym, SE. It creates a single legal framework within which companies from different EU countries are able to plan and carry out the reorganisation of their business on an EU-wide scale as well as in countries belonging to the European Economic Area (EEA).
- The directive supplements the regulation. This is to ensure that establishing an SE does not result in the disappearance or reduction of practices of employee involvement existing within the companies participating in establishing that SE, given the diverse rules and practices across EU countries as to how employees’ representatives are involved in company decision-making.
- The annexes to the regulation have been amended several times to take into account the changes in national equivalents to public limited-liability companies, as well as additional countries joining the EU. In 2020, following the outbreak of the COVID-19 pandemic, it was amended by Regulation (EU) 2020/699, which introduced temporary measures concerning the general meetings of SEs.
KEY POINTS
Regulation (EC) No 2157/2001
Combined application of the SE regulation and national law
An SE with its registered office in an EU country is governed:
- by the rules contained in the regulation; and
- for those aspects not covered by the regulation, by the national rules adopted to apply EU measures targeting the SE specifically and those that apply to public limited-liability companies — as a general rule, winding-up, liquidation, insolvency and suspension of payments are in large measure governed by the applicable national law.
Rules for establishing an SE
An SE is established with at least 2 companies originating in different EEA countries, which means that it can only be created from an existing base. It must have a minimum capital of €120,000 and can be created in the following ways.
| | |
|---|
| Merger (to establish an SE) | Public limited-liability companies | At least 2 of the companies must originate in different EEA countries |
| Establishment of a European holding company | Public or private limited-liability companies | At least 2 of the companies must originate in different EEA countries or they must have had a subsidiary or branch in another EU country for at least 2 years |
| Establishment of a European subsidiary | Companies, firms or other legal entities | At least 2 of the entities must originate in different EEA countries or must have had a subsidiary or branch in another EU country for at least 2 years |
| Conversion | Public limited-liability companies | The company must have had a subsidiary in another EEA country for at least 2 years |
An SE:
- can create 1 (or more) subsidiaries that are also SEs;
- must have its registered office in the country where it has its head office;
- can transfer its registered office within the EEA without having to dissolve the original company to form a new one.
The registration and completion of liquidation of an SE is published for information in the Official Journal of the European Union.
2 possible organisation structures
The SE’s statutes can relate to 2 different organisational systems:
- the two-tier system, where company management consists of a management board and a supervisory board; and
- the one-tier system, where company management consists of an administrative board.
Lack of tax harmonisation
The SEs are subject to taxes and charges in all EEA countries according to rules applicable in those countries.
Amending Regulation (EU) 2020/699 introduces a temporary exception to the rules governing SEs (and European cooperative societies (SCEs), created under Regulation (EC) No 1435/2003). Since COVID-19 confinement and social-distancing measures make it difficult for SEs and SCEs to organise their general meetings within 6 months of the end of their financial year, as is legally required, this temporary measure allows SEs and SCEs to hold their general meetings within 12 months of the end of the financial year, but no later than 31 December 2020.
Directive 2001/86/EC
Employee involvement in the SE
- The management and the employees' representatives must decide on the employee involvement in the SE before the SE is registered.
- This agreement must include information and consultation procedures and, where appropriate, employee involvement in the management bodies of the SE.
- This involvement is nevertheless only mandatory if the employees already benefited from it before the creation of the SE.
- Where the 2 parties are unable to reach a satisfactory arrangement, a series of standard principles listed in the annex to the directive then apply.
FROM WHEN DO THE REGULATION AND DIRECTIVE APPLY?
- The regulation has applied since 8 October 2004.
- The directive has applied since 10 November 2001 and had to become law in the EU countries by 8 October 2004.
BACKGROUND
For more information, see:
MAIN DOCUMENTS
Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European Company (SE) (OJ L 294, 10.11.2001, pp. 1-21)
Successive amendments to Regulation (EC) No 2157/2001 have been incorporated into the original text. This consolidated version is of documentary value only.
Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European Company with regard to the involvement of employees (OJ L 294, 10.11.2001, pp. 22-32)
RELATED DOCUMENTS
Council Regulation (EU) 2020/699 of 25 May 2020 on temporary measures concerning the general meetings of European companies (SEs) and of European cooperative societies (SCEs) (OJ L 165, 27.5.2020, pp. 25-26)
Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE) (OJ L 207, 18.8.2003, pp. 1-24)
See consolidated version.
Council Directive 2003/72/EC of 22 July 2003 supplementing the Statute for a European Cooperative Society with regard to the involvement of employees (OJ L 207, 18.8.2003, pp. 25-36)
