EU Company Law:
Introduction and Sources
Doc dr Tatjana Jevremović Petrović
General works
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Vanessa Edwards, EC Company Law, Clarendon Press, Oxford, 1999.
Stefan Grundmann, European Company Law: Organization, Finance and Capital Markets,
Intersentia, Antwerpen – Oxford, 2007.
Еrik Werlauff, EU-Company Law: Common business law of 28 states, 2nd edition, DJØF
Publishing, Copenhagen, 2003.
Adriaan Dorresteijn, Tiago Monteiro, Christoph Teichmann, Erik Werlauff, European
Corporate Law, second edition, Kluwer Law International, Alphen aan den Rijn, 2009.
Маds Andenas, Frank Wooldridge, European Comparative Company Law, Cambridge
University Press, Cambridge, 2009.
Mathias Habersack, Europäisches Gesellschaftsrecht, 3. Auflage, Verlag C.H. Beck,
München, 2006.
Marcus Lutter, Walter Bayer, Jessica Schmidt, Europäisches Unternehmens- und
Kapitalmarktrecht: Grundlagen, Stand und Entwicklung nebst Texten und Materalien, 5.
Auflage, De Gruyter, Berlin – Boston 2012.
Guido Ferrarini, Klaus J. Hopt, Japp Winter and Eddy Wymeersch (eds.), Reforming
Company and Takeover Law in Europe, Oxford University Press, Oxford, 2004.
Introduction to the EU Law
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Founding treaties:
European Coal and Steel Community 1951-2002.
 European (Economic) Community 1958.
 European Atomic Energy Community 1958.
 Single European Act (1986)
 EU (since Maastricht Treaty 1992)
 Nice Treaty 2000
 Lisbon Treaty 2007
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Internal (Single) Market
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Main task: Establishing a Common Market, later Single and
Internal Market
Goals and tasks:
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Establishment of the economic and monetary Union
Implementation of the common policies or activities
Promotion throughout the Community of harmonious, balanced and
sustainable development of economic activities, a high level of
employment and of social protection, equality between men and
women, sustainable and noninflationary growth, a high degree of
competitiveness and convergence of economic performance, a high
level of protection and improvement of the quality of the
environment, the raising of the standard of living and quality of life,
and economic and social cohesion and solidarity among Member
States.
Internal (Single) Market
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Its activities include, among other things:
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An internal market characterised by the abolition, as between
Member States, of obstacles to the free movement of goods,
persons, services and capital;
The approximation of the laws of Member States to the
extent required for the functioning of the internal market
Company law – free movement of persons (and capital)
Capital markets and EU Securities Law
EU (Company) Law – Sources
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Primary sources
 Founding
Treaties
 Conventions between MS
 EU and third countries and International
Organizations Agreements
EU (Company) Law – Sources
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Secondary sources
Regulations
 Directives
 Decisions
 Recommendations and Opinions
 Other sources
 ECJ decisions – not official and formal, but truly
influential source of the EU Law. Important
interpretative role in company law
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Especially important for interpretation of the primary establishment
EU Company Law – Primary
sources
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(Treaty Establishing the EC) Treaty on the Functioning of the
EU
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Art. 49 (43) Right of the establishment
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Art. 50 (44), 2, g
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Free movement of companies to other MS (entering and doing business in another MS)
Council and EP acting by means of Directives
Coordination of the safeguards which, for the protection of the interests of
members and others, are required by Member States of companies or firms
with a view to making such safeguards equivalent throughout the EU
Art. 54 (48) Definitions: company, nationality of the company
Art. 293 (Conventions) – abolished
Art. 352 (308) and 114 (95) – adoptation of the measures for the
approximation of the provisions laid down by law, regulation or
administrative action in Member States which have as their object the
establishment and functioning of the internal market.
EU Company Law – Secondary
sources
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Directives
Regulations – directly applied in MS laws
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Recommendations
ECJ Decisions (Segers, Daily Mail, Centros, Uberseering, Inspire Art, Sevic,
Cartesio, Vale)
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Interpretation of Treaty provisions (most important) and secondary
sources
(Conventions) obsolete
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Creation of “european” company forms
Mutual recognition of companies
Cross-border mergers
Cross-border transfer of companies’ seat
Model rules
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European Model Company Act
EU Company Law
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There is no systematic European Company Law
Provisions concerning different issues of
Company Law
EU Company Law
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Phase 1: From 1968. to 2000.
Harmonisation
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Effects of the harmonised rules are equivalent in all MS (free
choice of form and method of implementarion)
In the begining harmonisation defined provisions for certain
issues, later basic principles introduced minimum standards
and made possible cross-border activities.
Problems of harmonisation : concept, competence
(subsidiarity), legitimacy, lack of modernisation and ability to
evolve
EU Company Law
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Phase 2: From Action plan onwards
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Harmonisation concerning company’s mobility
Simplification of rules
English law vs. Continental (German) law
Different methods introduced (Recommendation)
Model rules
Competion of national legal systems
Competitiveness vs. Protection of interests
EU Company Law
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Phase 3: Financial crisis – national protectionism and
“fortress Europe”
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Responses to financial crisis and wealth funds from non-EU
countries
National and EU intervention
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In financial sector
Targeting non EU sovereign wealth funds
(First) Company Law Directive
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Directive 2009/101/EC of the European Parliament and of the Council of 16
September 2009 on coordination of safeguards which, for the protection of
the interests of members and third parties, 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 (Text with EEA
relevance)
(OJ L 258, 1.10.2009, p. 11–19)
(First Council Directive 68/151/EEC of 9 March 1968 on co-ordination 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)
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Nullity of the companies
Disclosure and publication of certain informations and documents
Third party responsibility
(Second) Company Law Directive
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Directive 2012/30/EU of the European Parliament and of the Council of 25 October
2012 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 54 of the Treaty on the Functioning of the
European Union, 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 Text with EEA relevance
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Before: Second Council Directive 77/91/EEC of 13 December 1976 in respect of the formation of public limited liability
companies and the maintenance and alteration of their capital (modified on several occasions, most important 2006)
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Capital Directive
Minimum capital requirements
Capital modifications (increase and reduction)
Distributions to shareholders
Shares subscribed by company
Redemption of shares
Feasibility study on an alternative to the capital maintenance regime established by the
Second Company Law Directive 77/91/EEC of 13 December 1976 and an
examination of the impact on profit distribution of the new EU accounting regime,
KPMG, January 2008. http://ec.europa.eu/internal_market/company/capital/index_en.htm
(Third) Company Law Directive
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Directive 2011/35/EU of the European Parliament
and of the Council of 5 April 2011 concerning
mergers of public limited liability companies
Before: 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.
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Modifications 2007, 2009
Mergers (national)
Fourth Company Law Directive
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Fourth Council Directive 78/660/EEC of 25
July 1978 based on Article 54 (3) (g) of the
Treaty on the annual accounts of certain types
of companies
(OJ L 222, 14.8.1978, p. 11–31)
Modifications 1990, 2001, 2003, 2006
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Annual accounts
Repealed
Proposal for a Fifth Company Law
Directive
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Proposals from 1972, 1983, 1991.
Structure of public companies and powers and
obligations of their organs (internal organization
of the company)
Directive abandoned
Corporate governance – new incentives
Sixth Company Law Directive
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Sixth Council Directive 82/891/EEC of 17
December 1982 based on Article 54(3)(g) of the
Treaty, concerning the division of public limited
liability companies.
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Modifications 2007, 2009
 Divisions
Seventh Company Law Directive
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Seventh Council Directive 83/349/EEC of 13
June 1983 based on the Article 54 (3) (g) of the
Treaty on consolidated accounts
(OJ L 193, 18.7.1983, p. 1–17)
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Consolidated accounts (groups of companies)
Eight Company Law Directive
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Eighth Council Directive 84/253/EEC of 10
April 1984 based on Article 54 (3) (g) of the
Treaty on the approval of persons responsible
for carrying out the statutory audits of
accounting documents
Persons responsible for carrying out the statutory
audits of accounting documents
 Abolished 2006.
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Accounting directives
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Directive 2013/34/EU of the European
Parliament and of the Council of 26 June 2013
on the annual financial statements, consolidated
financial statements and related reports of
certain types of undertakings, amending
Directive 2006/43/EC of the European
Parliament and of the Council and repealing
Council Directives 78/660/EEC and
83/349/EEC Text with EEA relevance
Proposal for a Ninth Company Law
Directive
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Groups of Companies
Abandoned
 Exceptions:
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Consolidated accounts (7th Company Law Directive)
 Disclosure of financial and non-financial information
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Already exists for listed companies (IAS reports, disclosure
within 13the Company Law Directive, annual statements)
Coordinated group policy
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 Protection of minority shareholders and creditors
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(Tenth) Directive on cross-border
Mergers
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Directive 2005/56/EC of the European
Parliament and of the Council of 26 October
2005 on cross-border mergers of limited liability
companies [Official Journal L 310 of 25.11.2005,
p. 1].
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Modifications 2007, 2009
 Cross-border mergers are possible
Eleventh Company Law Directive
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Eleventh 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
(OJ L 395, 30.12.1989, p. 36–39)
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Branches
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Disclosure provisions
(Twelfth) Company Law
Directive
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Directive 2009/102/EC of the European
Parliament and of the Council of 16 September
2009 in the area of company law on single-member
private limited liability companies (Text with EEA
relevance)
Before: Twelfth Council Company Law Directive
89/667/EEC of 21 December 1989 on singlemember private limited-liability companies
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Single-member companies
(Thirteenth) Directive on take-over
bids
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Directive 2004/25/EC of the European
Parliament and of the Council of 21 April 2004
on takeover bids (Text with EEA relevance)
(OJ L 142, 30.4.2004, p. 12–23)
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Takeover bids
Proposal for a (Fourteenth)
Company Law Directive on transfer
of the company’s seat
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No official Proposal yet
Unofficial Proposal 1997
Impact Assessment with No-action Scenario adopted
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Impact assessment on the Directive on the cross-border
transfer of registered office, Commission Staff Working
Document, Commission of the European Communities,
SEC(2007) 1707, Brussels 12.12.2007;
http://ec.europa.eu/governance/impact/ia_carried_out/docs/ia_2007
/sec_2007_1707_en.pdf
New incentives: Report of the Reflection Group
ECJ Judgements
Shareholders rights
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Directive 2007/36/EC of the European
Parliament and of the Council of 11 July 2007
on the exercise of certain rights of shareholders
in listed companies
(OJ L 184, 14.7.2007, p. 17–24)
Business registers
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Directive 2012/17/EU of the European
Parliament and of the Council of 13 June 2012
amending Council Directive 89/666/EEC and
Directives 2005/56/EC and 2009/101/EC of
the European Parliament and of the Council as
regards the interconnection of central,
commercial and companies registers Text with
EEA relevance.
EEIG
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Council Regulation (EEC) No 2137/85 of 25
July 1985 on the European Economic Interest
Grouping (EEIG).
European Company – SE
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Council Regulation (EC) No 2157/2001 of 8
October 2001 on the Statute for a European
company
Council Directive 2001/86/EC of 8 October
2001 supplementing the Statute for a European
company with regard to the involvement of
employees [Official Journal L 294, 10.11.2001].
European Cooperative Society
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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, p. 1–24)
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, p. 25–36)
Proposal for a European Private
Company
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Proposal for a Council Regulation of 25 June
2008 on the Statute for a European Private
Company (SPE)
Proposal for a Council Regulation on the Statute
for a European Foundation (FE) 2012
Remuneration of Directors
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2004/913/EC: Commission Recommendation of 14 December
2004 fostering an appropriate regime for the remuneration of
directors of listed companies Text with EEA relevance
(OJ L 385, 29.12.2004, p. 55–59)
Commission recommendation complementing
Recommendations 2004/913/EC and 2005/162/EC as regards
the regime for the remuneration of directors of listed companies,
2009
Commission Recommendation of 30 April 2009 on
remuneration policies in the financial services sector (Text with
EEA relevance)
(OJ L 120, 15.5.2009, p. 22–27)
Board of directors structure
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EC Commission Recommendation of 15
February 2005 on the role of non-executive or
supervisory directors of listed companies and on
the committees of the (supervisory) board (Text
with EEA relevance)
(OJ L 52, 25.2.2005, p. 51–63)
Future of the EU Company Law
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Final Report of the High Level Group of Company
Law Experts chaired by Jaap Winter, presented on 4
November 2002
21.05.2003 Communication from the Commission to
the Council and the European Parliament –
Modernising Company Law and Enhancing Corporate
Governance in the European Union – A Plan to Move
Forward (Action Plan 2003)
Report of the Reflection Group On the Future of EU
Company Law, 5 April 2011
Communication from the Commission – Action Plan
2012.
Future of the EU Company Law
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Report of the High Level group:
Facilitating efficient and competitive business in
Europe
 Modern Company Law making
 Disclosure of information as a regulatory tool
 Distinguishing types of companies
 Increased flexibility vs. tightening of rules
 Modern technology
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Future of the EU Company Law
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Phase 2: Action plan of the Commission and ECJ decisions
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Policy objectives: Strengthening shareholders rights and third party protection
vs. fostering of efficiency and competitiveness of business
Harmonisation concerning company’s mobility and new European company
forms.
Simplification of rules
Modern corporate governance:
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Groups of companies
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Different methods introduced (Recommendations, model rules)
Competion of national legal systems
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Disclosure,
Strenghtening shareholders’ rights,
Board of directors (disqualification, remuneration)
Capital rules (modernisation) and creditor protection
Similar goals underlined in the Report of the Reflection Group (2011)
Further reading
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Report of the High Level Group of Company Law Experts on a Modern Regulatory Framework for
Company Law in Europe, Brussels, 4 November 2002.
http://ec.europa.eu/internal_market/company/modern/index_en.htm#background
Communication from the Commission to the Council and the European Parliament: Modernising Company
Law and Enhancing Corporate Governance in the European Union – A Plan to Move Forward,
Commission of the European Communities, Brussels, 21.5.2003., COM (2003) 284 final.
http://ec.europa.eu/internal_market/company/modern/index_en.htm
Report of the Reflection Group On the Future of EU Company Law, Brussels, 5 April 2011,
http://ec.europa.eu/internal_market/company/docs/modern/reflectiongroup_report_en.pdf, 7.11.2011.
Communication from the Commission – Action Plan 2012.
http://ec.europa.eu/internal_market/company/modern/index_en.htm#actionplan2012
European Commission – Internal market – Company Law – Modernisation
of Company Law and Enhancement of Corporate Governance
http://ec.europa.eu/internal_market/company/modern/index_en.htm