The European Commission has launched a public consultation on the future of European Company Law.
European company law comprises a large body of legislation on issues such as public limited liability companies' capital, takeovers, branch disclosures, shareholder rights, financial reporting and accounting, and single-member private limited liability companies' governance.
What is the consultation about?
The consultation seeks views from stakeholders on the following areas:
- Objectives and scope of European company law - what should be the main objectives of European company law? Are the current rules fit for today's challenges? In which areas is there need for further evolution? What is the relationship between company law and corporate governance?
- Codification of Europan company law - should the existing company law Directives be merged in a single instrument in order to make the regulatory framework more accessible and user-friendly?
- The future of company legal forms at European level - What are the advantages and shortcomings of European company forms? Do existing company forms need to be reviewed? Should alternative instruments be explored?
- Cross-border mobility for companies - What can be done to facilitate the cross-border transfer of a company's seat? What if a company splits into different entities cross border? Should the rules on cross border mergers be reviewed?
- Groups of companies - i.e. a set of companies under a single management or source of control - Is there need for EU policy action in this field?
- Capital regime for European companies - Should the existing minimum legal capital requirements and rules on capital maintenance be modified and updated?
Specifically the consultation paper asks whether the objective of EU company law should be improving the environment in which European companies operate and their mobility within the EU; facilitating the creation of companies in Europe; setting the right framework for regulatory competition allowing for a high level of flexibility and choice; better protection of employees or better protection of creditors, shareholders and members.
The consultation paper also seeks opinion on whether the EU's priority should be to improve the existing harmonised legal framework (on, for example, take-over bids, cross border mergers, shareholders' rights etc) or to explore new areas for harmonisation, or both.
The paper asks whether the focus of EU company law should move away from the distinction between public/private towards listed/unlisted in order to ensure adequate protection to shareholders.
The paper asks specific questions about the future of the proposed European private company or societas privata europaea which has been debated for more than three years without an outcome or agreement on a regime. There is also a section on cross-border transfers of a company's registered office and how this should be best achieved.
Timetable and further details
- The consultation is being carried out online and it is open until 14 May 2012.
- Following an analysis of the feedback, the European Commission will publish a feedback statement summarising the findings in mid-2012.
- Any initiatives proposed will form a coherent package with follow-up measures resulting from the review on the European corporate governance framework.
European Commission Press Release