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Sociedad Limitada Europea

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European Private Company (SPE)
The SPE or European Private Company statute should provide a legal form for SMEs. A feasibility study was presented to the public on 13 December 2005. The study found that there was great interest in this legal form. The same conclusion could be drawn from a resolution of the European Parliament of February 2007 on this subject. In 2007 the Commission conducted a public consultation on a possible statute for an SPE. At the end of June 2008 the Commission launched its Proposal for a Council Regulation on the Statute for a European Private Company (document: COM(2008) 396/3). On 10 March 2009 the European Parliament adopted a report on the European Private Company (SPE) to complement the Commission’s proposal.

In the context of the SPE, employee participation is an important subject. First of all, it is important to safeguard existing board-level participation rights. Moreover, a special SPE works council must be established along the lines of the SE directive. In its summary report on the last consultation the Commission noted, in the context of employees’ participation rights: ‘Respondents to this question support in equal numbers a uniform EU standard on employee participation and a reference to the national legislation of the law of the Member State in which the SPE has its seat’. The Commission Proposal followed another route. It foresees that the general principle for board-level participation will be that the SPE is subject to the rules of the Member State in which it has its registered office. This feature virtually invites circumvention strategies in relation to board-level participation.

Furthermore, a number of other provisions give rise to problems. This is closely linked to the fact that the SPE draft statute will borrow its main features from the UK limited company (Ltd). For example, the minimum capital required will be only €1. Moreover, the shareholders of SPEs are likely to enjoy a large degree of freedom in determining company organisation. There will also be – in contrast to the SE – no restrictions on how an SPE may be created. It will therefore be possible to set up an SPE ‘ex nihilo’. Furthermore, SPEs may be set up with their registered office and central administration or principal place of business in different Member States. From the standpoint of the subsidiarity principle (Art. 5 II EC) it is problematic that the SPE does not foresee a cross-border (European) element. This might give rise to a breach of primary EC law.

On 10 March 2009 the European Parliament adopted a report on the European Private Company (SPE) to complement the Commission’s proposal. The European Parliament’s report, adopted by a huge majority (578 votes in favour), contained a number of improvements, such as an obligation for the SPE to demonstrate a cross-border component, the creation of a European central register and an obligation to produce a solvency certificate. Another significant improvement compared with the Commission’s proposal were the provisions regarding workers’ board-level participation. While the Commission proposal virtually ignored workers’ participation rights, the Parliament’s report was more focused on ensuring that such rights are not undermined, but still contained shortcomings. Although difficult to follow in detail the broad majority in favour of the compromise in the EP plenary brought workers’ participation back onto the European political agenda; it had previously been considered as something primarily of technical interest.

At the Competition Council session on 4 December 2009 the Swedish presidency presented a new compromise proposal (Council document: 16115/09 DRS 71 SOC 711 ADD1) regarding the Council Regulation on a European Private Company (SPE). In the Council’s discussions, the German representative made it clear that the Swedish proposal is unacceptable, for three reasons: (i) the lack of a minimum capital requirement of €8000 for all SPEs; (ii) the possible separation of the statutory seat and the de facto head office of the SPE and (iii) the inadequate board-level participation rules. After this clear statement, the Swedish presidency broke up the discussion. As unanimity in the Council is required, Sweden did not press for a decision on the SPE. Besides Germany, other member states – such as Austria, Hungary and the Netherlands – also did not agree with the proposal’s lax board-level participation rules. This shows that it is unlikely that EU Member States will agree to legislation which might undermine national board-level participation standards.In 2010, the SPE dossier will again be subject to negotiation under the Spanish presidency.

From a trade union perspective, it must be hoped that a new proposal will improve the defects of the recent proposal, especially with regard to the board-level participation rules. The core points for improvement should be:

1.a substantial cross-border element (as is the case in Art. 2 SCE Regulation),
2.obligatory provisions regulating the corporate governance structure adopted in the SE,
3.a general clause on the duties of directors, which includes taking into account the interests of all stakeholders (including employees) and
4.the duty to conduct negotiations on worker involvement – which also includes issues of transnational information and consultation – in each instance of founding an SPE (as is the case in the SE).
In particular, ignoring the condition of a sustainable cross-border element for the SPE entails the risk, based on the Treaty of Lisbon, that national parliaments will initiate subsidiarity proceedings before the European Court of Justice, which could lead to the nullification of a future SPE Regulation (Art. 5 III Treaty on the European Union, together with Art. 263 Treaty on the Functioning of the European Union and Art. 8, Protocol No.2 on the Application of the Principle of Subsidiarity and Proportionality). In the German Bundestag, for example, a quarter of its members is enough to initiate a subsidiarity procedure of this kind.

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