EU Company Law

The right to propose new European legislation or changes to existing legislation lies with the European Commission. Legislation then has to be agreed, usually by the Council and the Parliament in the so-called co-decision procedure. EU action in the area of company law, however, does not always take the form of legally binding measures such as Directives or Regulations. It can also be non-binding measures such as Recommendations or Opinions.

Information on existing company law and on current initiatives can be found at the European Commission website using the link on the right of this page.

Current EU initiatives 

The main current EU initiatives on company law are:

Proposed European Private Company Statute

On 25th June 2008 The European Commission presented a proposal for a Statute on a European Private Company ('SPE'). This new company form will enable small- and medium-sized enterprises (SMEs) to do business throughout the EU, with the aim of cutting costs and encouraging growth in this area.

Full details of the proposal and the Small Business Act which the European Private Company is part of can be found from the external links on the right hand side of the page.

A formal consultation with UK stakeholders will take place over the Autumn this year.

 

  • A Communication on proposals for the simplification of existing company law (“simplifying the business environment for companies”).  The Department issued a note on the Communication,which asked for comments by 13 October 2007. 
European Commission consultation on the simplification of EU company law and accounting and audit regulation Word document (82KB)

.[1]

  • A study on shareholder democracy in the EU (“shareholder rights: proportionality between ownership and control”).
  • A questionnaire on a possible proposal for a European Private Company,on which the Commission asked for responses by 31 October 2007.
  • A recently closed consultation on a possible Commission Recommendation to supplement 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 (“shareholder rights: cross-border exercise of shareholder rights”)

Details of these initiatives can be found on the Commission website under “Modernisation of Company Law and Enhancement of Corporate Governance.

 

 

UK Approach to EU Company Law and Corporate Governance

The UK supports EU action in the area of company law if it is focused on cross-border issues and trying to achieve objectives that could not be reached with action at national level alone. We believe, however, that any EU action should be based on clear economic objectives, should reflect market needs and should resort to legislation only when all other alternatives have been fully considered.

The UK approach to EU company law has been set out in more detail in a DTI publication, ”The UK approach to EU company law and corporate governance”   (which can be viewed by clicking on the link on the right of the screen) which was launched on 20 July 2005.  It encourages UK stakeholders to get actively engaged in shaping the future EU agenda in this area and provides information on how stakeholders can get involved. 

[1] European Commission Consultation On The Simplification Of EU Company Law And Accounting And Audit Regulation  -  Note and Request for Views by the Department for Business, Enterprise and Regulatory Reform

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