EU Company Law:

Introduction and
Sources
Doc dr Tatjana Jevremovi
Petrovi

General works

Vanessa Edwards, EC Company Law, Clarendon Press, Oxford, 1999.

Stefan Grundmann, European Company Law: Organization, Finance
and Capital Markets, Intersentia, Antwerpen Oxford, 2007.
rik Werlauff, EU-Company Law: Common business law of 28 states ,
2nd edition, DJF Publishing, Copenhagen, 2003.
Adriaan Dorresteijn, Tiago Monteiro, Christoph Teichmann, Erik
Werlauff, European Corporate Law, second edition, Kluwer Law
International, Alphen aan den Rijn, 2009.
ds Andenas, Frank Wooldridge, European Comparative Company
Law, Cambridge University Press, Cambridge, 2009.
Mathias Habersack, Europisches Gesellschaftsrecht, 3. Auflage,
Verlag C.H. Beck, Mnchen, 2006.
Marcus Lutter, Walter Bayer, Jessica Schmidt, Europisches
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

Founding treaties:
European Coal and Steel Community 19512002.
European (Economic) Community 1958.
European Atomic Energy Community 1958.
Single European Act (1986)
EU (since Maastricht Treaty 1992)
Nice Treaty 2000
Lisbon Treaty 2007

Internal (Single) Market

Main task: Establishing a Common Market, later

Single and Internal Market
Goals and tasks:

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

Its activities include, among other things:

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

Primary sources
Founding

Treaties
Conventions between MS
EU and third countries and
International Organizations
Agreements

EU (Company) Law
Sources

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

Especially important for interpretation of the primary

establishment

EU Company Law
Primary sources

(Treaty Establishing the EC) Treaty on the

Functioning of the EU

Art. 49 (43) Right of the establishment

Art. 50 (44), 2, g

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

Directives
Regulations directly applied in MS laws

Recommendations
ECJ Decisions (Segers, Daily Mail, Centros,
Uberseering, Inspire Art, Sevic, Cartesio, Vale)

Interpretation of Treaty provisions (most important)

and secondary sources

(Conventions) obsolete

Creation of european company forms

Mutual recognition of companies

Cross-border mergers
Cross-border transfer of companies seat

Model rules

European Model Company Act

EU Company Law

There is no systematic European

Company Law
Provisions concerning different
issues of Company Law

EU Company Law

Phase 1: From 1968. to 2000.

Harmonisation

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

Phase 2: From Action plan onwards

Harmonisation concerning companys 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

Phase 3: Financial crisis national

protectionism and fortress Europe

Responses to financial crisis and wealth funds

from non-EU countries
National and EU intervention

In financial sector
Targeting non EU sovereign wealth funds

(First) Company Law

Directive

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. 1119)
(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 )

Nullity of the companies

Disclosure and publication of certain informations and
documents
Third party responsibility

(Second) Company Law

Directive

Directive 2012/30/EU of the European Parliament and of the Council of

25October 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

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)

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

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.

Modifications 2007, 2009

Mergers (national)

Fourth Company Law

Directive

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. 1131)
Modifications 1990, 2001, 2003, 2006

Annual accounts

Repealed

Proposal for a Fifth

Company Law Directive

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

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.

Modifications 2007, 2009

Divisions

Seventh Company Law

Directive

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. 117)

Consolidated accounts (groups of

companies)

Eight Company Law

Directive

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.

Accounting directives

Directive 2013/34/EU of the European

Parliament and of the Council of 26June
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

Groups of Companies
Abandoned
Exceptions:

Consolidated accounts (7th Company Law Directive)

Disclosure of financial and non-financial information

Already exists for listed companies (IAS reports, disclosure

within 13the Company Law Directive, annual statements)

Coordinated group policy

(Prevention of abusive pyramid groups of companies)
Protection of minority shareholders and creditors

(Tenth) Directive on crossborder Mergers

Directive 2005/56/EC of the

European Parliament and of the
Council of 26 October 2005 on crossborder mergers of limited liability
companies [Official Journal L 310 of
25.11.2005, p. 1].

Modifications 2007, 2009

Cross-border mergers are possible

Eleventh Company Law

Directive

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. 3639)

Branches

Disclosure provisions

(Twelfth) Company Law

Directive

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 single-member
private limited-liability companies

Single-member companies

(Thirteenth) Directive on
take-over bids

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. 1223)

Takeover bids

Proposal for a (Fourteenth)

Company Law Directive on
transfer of the companys
seat

No official Proposal yet

Unofficial Proposal 1997
Impact Assessment with No-action Scenario
adopted

Impact assessment on the Directive on the crossborder 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_ou
t/docs/ia_2007/sec_2007_1707_en.pdf

New incentives: Report of the Reflection Group

ECJ Judgements

Shareholders rights

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. 1724)

Business registers

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

Council Regulation (EEC) No

2137/85 of 25 July 1985 on the
European Economic Interest
Grouping (EEIG).

European Company SE

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

Council Regulation (EC) No 1435/2003

of 22July 2003 on the Statute for a
European Cooperative Society (SCE)
(OJ L 207, 18.8.2003, p. 124)
Council Directive 2003/72/EC of
22July 2003 supplementing the
Statute for a European Cooperative
Society with regard to the involvement
of employees
(OJ L 207, 18.8.2003, p. 2536)

Proposal for a European

Private Company

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

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. 5559)
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. 2227)

Board of directors
structure

EC Commission Recommendation of
15 February 2005 on the role of nonexecutive 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. 5163)

Future of the EU
Company Law

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

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

Future of the EU
Company Law

Phase 2: Action plan of the Commission and ECJ decisions

Policy objectives: Strengthening shareholders rights and third

party protection vs. fostering of efficiency and competitiveness of
business
Harmonisation concerning companys mobility and new European
company forms.
Simplification of rules
Modern corporate governance:

Groups of companies

Different methods introduced (Recommendations, model rules)

Competion of national legal systems

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

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#backgro
und
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_re
port_en.pdf, 7.11.2011.
Communication from the Commission Action Plan 2012.
http://ec.europa.eu/internal_market/company/modern/index_en.htm#actionpla
n2012

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.ht
m