EUROPEAN COMPANY LAW Dorota Wieczorkowska Department of Business

EUROPEAN COMPANY LAW Dorota Wieczorkowska Department of Business and Commercial Law Faculty of Law, Administration and Economics University of Wrocław

LEGAL SOURCES – FOR THE CLASSES • Charter of Fundamental Rights of the European Union (2007/C 303/01), Celex number: 12007 P/TXT, (art. 16) • Treaty on the Functioning of the European Union (2012/C 326/01), Celex number: 12012 E/TXT, (Title IV, Chapter 2) • Directive (EU) 2017/1132 Of The European Parliament And Of The Council of 14 June 2017 relating to certain aspects of company law, Celex numer: 32017 L 1132; • Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European company (SE), Celex number: 32001 R 2157; • Council Regulation (EEC) No 2137/85 of 25 July 1985 on the European Economic Interest Grouping (EEIG), celex number: 31985 R 2137

METHOD OF REGULATION EU Company Law Primary law Treaties Secondary law Directives Council Regulations

TREATY ON THE FUNCTIONING OF THE EUROPEAN UNION • Article 49 • Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the settingup of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State. • Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 54, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.

TREATY ON THE FUNCTIONING OF THE EUROPEAN UNION • Article 50 • 1. In order to attain freedom of establishment as regards a particular activity, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, shall act by means of directives. • 2. The European Parliament, the Council and the Commission shall carry out the duties devolving upon them under the preceding provisions, in particular: • […] • (g) by coordinating to the necessary extent the safeguards which, for the protection of the interests of members and others, are required by Member States of companies or firms within the meaning of the second paragraph of Article 54 with a view to making such safeguards equivalent throughout the Union;

TREATY ON THE FUNCTIONING OF THE EUROPEAN UNION • Article 54 • Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States. • "Companies or firms" means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making.

CHARTER OF FUNDAMENTAL RIGHTS OF THE EUROPEAN UNION Article 16 Freedom to conduct a business • The freedom to conduct a business in accordance with Union law and national laws and practices is recognised.

MAIN OBJECTIVES OF THE EUROPEAN COMPANY LAW • to create positive EU-wide business environment in the internal market. • to promote freedom of establishment and the freedom to conduct a business, • to guarantee the right to take up and pursue activities in a self-employed capacity and to set up and manage undertakings, in particular companies or firms, • to enable businesses to be set up anywhere in the EU enjoying the freedom of movement of persons, services and capital, • to provide protection for shareholders and other parties with a particular interest in companies • to make businesses more competitive, and to encourage businesses to cooperate over borders

WHY DO WE NEED EUROPEAN COMPANY LAW? • Since the internal market implies the creation of Europe-wide companies and there around 24 million companies in the EU, of which approximately 80% are limited liability companies. While around 98 -99% of limited liability companies are SMEs, companies must be able to act throughout the EU according to a uniform legal framework.

EU COMPANY LAW - RANGE • no codified European company law as such, • harmonisation of the national rules on company law has created some minimum standards and covers areas such as: • the protection of interests of shareholders and their rights, • rules on takeover bids for public limited companies, • branch disclosure, • mergers and divisions, • minimum rules for single-member private limited liability companies, • financial reporting and accounting, • easier and faster access to information on companies, • certain disclosure requirements for companies

EU COMPANY LAW - RANGE • European legal entities apply throughout the EU and coexist with the national ones. • The European Company (SE) • European Economic Interest Grouping (EEIG) • The European Cooperative Society (SCE)