ON 25 JUNE 2008 THE EUROPEAN COMMISSION unveiled the Small Business Act for Europe, a package of measures designed to make it easier for small and medium-sized enterprises (SMEs) to do business in Europe. The centrepiece of the package was a proposal for a Statute for a European Private Company, which will allow the creation of a new form of company, known as a 'Societas Privata Europaea' (SPE). The SPE is primarily designed for SMEs but may be used by companies of any size.
WHAT IS AN SPE?
The key features of the SPE are as follows:
- The SPE will be a private company, so its shares may not be offered to the public or publicly traded.
- The minimum capital requirement will be â¬1, which is significantly lower than that currently available in some European countries.
- It will be possible to have different classes of shares.
- Dividends to shareholders are permitted, provided that the SPE's assets fully cover its liabilities at the time the distribution is made.
- Decisions on certain issues, such as the variation of rights attaching to shares, mergers and the reduction of the share capital, must be approved by the holders of at least two-thirds of the voting rights.
- Minimum shareholders (with 5% or more of the voting rights) can request a shareholders' resolution.
As regards employee participation, the SPE will be subject to the laws of the EU member state of its registered office. The proposed statute itself does not impose any requirements in this respect, other than to ensure that, in the case of a transfer of the registered office of an SPE to a different member state, any pre-existing workers' participation rights will be protected.
The proposed statute does not cover issues such as labour law, tax law, accounting, insolvency, social security and criminal activity. These matters will remain governed by national laws applicable to private limited-liability companies in the member state where the SPE has its registered office.
CONCLUSION
The proposal must now be approved by the EU Council of Ministers and is currently scheduled for adoption in December 2008. It is likely that some details of the statute will change during the legislative process but, on the whole, the SPE in its currently proposed form should become a reality in the not-too-distant future.
By Chris Bryant, associate, and Sarah Austin, trainee solicitor, Berwin Leighton Paisner LLP.
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