The European Commission has launched an in-depth consultation on the future of European company law. Europe needs a company law framework that is adapted to the needs of the society of today and to the evolution of the economic environment. EU company law has played a central part in building the single market. The Commission says it is now time to see whether today’s needs are still met by the existing legal framework. An on-line public consultation paper has been launched to collect comments from all stakeholders. The deadline for sending contributions is 14 May 2012.
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1. Why an initiative on Company law?
European company law provides a common set of rules that offer equivalent protection to shareholders, creditors and other stakeholders across the European Union. It also makes it easier for companies to offer services and products to all customers in the Union.
European industry today is seeing an increasing amount of cross-border trade and e-commerce. This growth in cross-border activities means that we need to adjust the European legal framework to match the times. That is why the Commission has initiated an in-depth reflection on the future of European company law.
2. Why conduct a public consultation?
It has been very difficult to reach agreement at European level on proposals in the field of company law, with the notable exception of the interconnection of business registers. The latest complicated and unfinished negotiations are those on the Private Company Statute. The Commission therefore wants to check the pulse of stakeholder opinion on the purpose of EU company law, and on its future.
3. Who can contribute to it?
All interested parties, stakeholders and individuals are invited to give their views.
4. Is this consultation a stand-alone exercise?
No. This is part of a larger reflection process that the Commission initiated in autumn 2010 by setting up an ad-hoc expert group to look at the future of European company law. The group produced a report containing a number of recommendations for action. The report was followed by a public conference on “European Company Law: the way forward” held in Brussels on 16 and 17 May 2011.
In 2011, the European Commission also carried out a similar exercise looking at the EU framework on corporate governance. Both policy fields are interrelated, as some corporate governance rules are enshrined in company law, and company law deals to a large extent with corporate governance issues. The two consultations are complementary.
5. What is currently covered in European company law?
The legislation on company law includes a large number of Directives and regulations, which cover:
- the constitution and maintenance of public limited-liability companies’ capital;
- rules to be followed in takeover situations;
- disclosure regarding branches established in other Member States;
- mergers and divisions;
- minimum rules for private limited-liability companies with a single-member;
- the protection of shareholders’ rights; and
- related policy, such as financial reporting and accounting.
It also includes different European legal forms such as the European Company (SE), the European Economic Interest Grouping (EEIG) and the European Cooperative Society (SCE).
6. Which aspects of company law are being examined in this consultation, and why?
This consultation is asking people to look at the general orientation of European company law, more specifically to consider what initiatives could be envisaged in the future. The questions have been grouped into six chapters:
- the objectives of European company law;
- the scope of European company law;
- the codification of European company law;
- the future of company legal forms at European level;
- cross-border mobility for companies, groups of companies; and
- the capital regime for European companies.
These topics were chosen as a result of the reflection process which started at the end of 2010.
7. How can stakeholders take part in the consultation in practice? What is the deadline for sending input?
The consultation will be carried out online. It is available in 22 languages
The consultation will run until 14 May 2012.
8. Will the Commission propose initiatives in all the areas covered by the consultation?
The consultation covers a wide selection of areas in order to allow interested parties to express their views on them. This does not mean that the Commission’s upcoming initiatives will automatically cover all these items.
9. What are the next steps?
The responses received will be thoroughly analysed. Following this analysis, the European Commission will publish a feedback statement summarising the results in mid-2012. Possible follow-up initiatives would then be announced. They would form a coherent package with any follow-up measures resulting from the reflection on the European corporate governance framework.
Consultation on the future of European Company Law
Source: European Commission
