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European Company Law Beyond the 2003 Action Plan

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Abstract

This paper describes the current state of implementation of the European Commission’s 2003 Action Plan on Modernising Company Law and Enhancing Corporate Governance, as well as how the new Commission revisited and adjusted the Action Plan after it entered office in November 2004. In addition, the paper sketches the outlook for the future development of European company law and corporate governance. It presents the methods and goals of the Commission and, to the extent possible, describes the contours of the concrete measures that are in the works.

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References

  1. ‘Report of the High Level Group of Company Law Experts on a Modern Regulatory Framework for Company Law in Europe’, available at: http://ec.europa.eu/internal_market/company/docs/modern/report_en.pdf.

  2. The UK documents are available at: http://www.dti.gov.uk/bbf/co-act-2006/clr-review/page22794.html.

  3. See the Report of the German Government Panel on Corporate Governance, Bericht der Regierungskommission ‘Corporate Governance’. Unternehmensführung — Unternehmenskontrolle — Modernisierung des Aktienrechts, German Parliament Document 14/7515. Published in German by Theodor Baums, ed., Bericht der Regierungskommission Corporate Governance (Cologne, Otto Schmidt 2001).

  4. Communication from the Commission to the Council and the European Parliament, ‘Modernising Company Law and Enhancing Corporate Governance in the European Union — A Plan to Move Forward’, 21 May 2003, COM (2003) 284 final.

  5. Commission Decision of 15 October 2004 establishing a European Corporate Governance Forum (2004/706/EC). The agendas and minutes of the Forum’s meetings are available at: http://ec.europa.eu/internal_market/company /ecgforum/index_en.htm.

  6. Commission Decision of 28 April 2005 establishing a group of non-governmental experts on corporate governance and company law (2005/380/EC). The minutes of the Forum’s meetings are available at: http://ec.europa.eu/internal_market/company/advisory/index_en.htm.

  7. Proposal for a Directive of the European Parliament and of the Council on the exercise of voting rights by shareholders of companies having their registered office in a Member State and whose shares are admitted to trading on a regulated market and amending Directive 2004/109/EC, 5 January 2006, COM (2005) 685 final.

  8. See also, e. g., Corinna Ullrich, ‘Die geplante Richtlinie zu den grenzüberschreitenden Aktionärsrechten’, lecture given at the Centre for European Commercial Law at Bonn University on 20 November 2006, available at: http://www.zew.uni-bonn.de.

  9. ‘Proportionality between ownership and control in EU listed companies: external study’, EU — Doc. 2006/S 74-076808. The commission has been given to Institutional Shareholder Services (ISS) Europe S.A., Brussels.

  10. Commission Recommendation of 14 December 2004 fostering an appropriate regime for the remuneration of directors of listed companies (2004/913/EC), OJ 2004 L 385/55.

  11. Commission Recommendation of 15 February 2005 on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board (2005/162/EC), OJ 2005 L 51/51.

  12. Directive 2006/46/EC of the European Parliament and of the Council of 14 June 2006 amending Council Directives 78/660/EEC on the annual accounts of certain types of companies, 83/349/EEC on consolidated accounts, 86/635/EEC on the annual accounts and consolidated accounts of banks and other financial institutions and 91/674/EEC on the annual accounts and consolidated accounts of insurance undertakings, OJ 2006 L 224/1.

  13. Eighth Council Directive 84/253/EEC of 10 April 1984 based on Article 54(3)(g) of the Treaty on the approval of persons responsible for carrying out the statutory audits of accounting documents, OJ 1984 L 126/20.

  14. Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC, OJ 2006 L 157/87.

  15. See Recommendations by the Company Law Slim Working Group on the simplification of the First and Second Company Law Directives, available at: http://ec.europa.eu/internal_market/company/official/index_en.htm. See also the Winter Report, loc. cit. n. 1, at p. 84 et seq.

  16. Directive 2006/68/EC of the European Parliament and of the Council of 6 September 2006 amending Council Directive 77/91/EEC as regards the formation of public limited liability companies and the maintenance and alteration of their capital, OJ 2006 L 264/32.

  17. See Art. 39(a) and (b) of the Proposal for a Directive of the European Parliament and of the Council amending Council Directive 77/91/EEC, as regards the formation of public limited liability companies and the maintenance and alteration of their capital, 21 September 2004, COM (2004) final, available at: http://ec.europa.eu/internal_market/company/docs/capital/2004-proposal/proposal_en.pdf.

  18. Feasibility study on alternative to capital maintenance regime as established by the Second Company Law Directive 77/91/EEC of 13 December 1976 and the examination of the implications of the new EU accounting regime on profit distribution, EU Doc. 2006/S 203-215305. The commission for the study was awarded in October 2006 to KPMG Deutsche Treuhand-Gesellschaft AG.

  19. Proposal for a Tenth Directive of the Council on cross-border mergers of companies with share capital, 14 January 1985, COM (84) 727 final, OJ 1985 C 23; see also Draft Convention on the international merger of sociétés anonymes; Report on Draft Convention on the international merger of sociétés anonymes, 29 June 1973, EC Bull. Supp. 13/1973.

  20. Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with regard to the involvement of employees, OJ 2001 L 294/22.

  21. Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of limited liability companies, OJ 2005 L 310/1.

  22. Details on this procedure can be found in Commission Staff Working Document, Annex to the Proposal for a Directive of the European Parliament and the Council on the exercise of voting rights by shareholders, Impact assessment, 17 February 2006, COM/2005/685 final, p. 5 et seq., available at: http://ec.europa.eu/internal_market/company/docs/shareholders/comm_native_sec_2006_0181_en.pdf.

  23. See COM (2005) 685 final, loc. cit. n. 7.

  24. See the points listed in the consultation paper of the Internal Market and Services Directorate, ‘Consultation on Future Priorities for the Action Plan on Modernising Company Law and Enhancing Corporate Governance in the European Union’, 20 December 2005, at p. 3 et seq., available at: http://ec.europa.eu/internal_market/company/docs/consultation/consultation_en.pdf.

  25. Communication from the Commission to the Council and the European Parliament: Common Actions for Growth and Employment: The Community Lisbon Programme, COM (2005) 330 final.

  26. Communication of the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — ‘Implementing the Community Lisbon programme: A strategy for the simplification of the regulatory environment’, 25 October 2005, COM (2005) 535 final.

  27. See infra section 4.1.

  28. Amended Proposal for a Council Regulation (EEC) on a statute for a European association, OJ 1993 C 236/1, earlier version: 1991/386/COD.

  29. Amended Proposal for a Council Regulation (EEC) on a statute for a European mutual society, OJ 1993 C 236/40, earlier version: 1991/390/COD.

  30. Proposal for a Council Directive supplementing the Statute for a European association with regard to the involvement of employees, OJ 1992 C 99/14; Proposal for a Council Directive supplementing the Statute for a European mutual society with regard to the involvement of employees, OJ 1992 C 99/57.

  31. See the consultation paper cited in n. 24 supra.

  32. Hearing on Future Priorities for the Action Plan for Company Law and Corporate Governance, 3 May 2006, available at: http://ec.europa.eu/internal_market/company/docs/consultation/programme_en.pdf.

  33. Directorate General for Internal Market and Services, ‘Consultation and Hearing on Future Priorities for the Action Plan for Company Law and Corporate Governance in the European Union: Summary Report’, available at: http://ec.europa.eu/internal_market/company//consultation/final_report_en.pdf.

  34. European Parliament resolution on recent developments and prospects in relation to company law (2006/2051 (INI)), available at: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2006-0295+0+DOC+XML+V0//EN&language=EN; preparatory document from the Committee on Legal Affairs, Report on recent developments and prospects in relation to company law, 26 June 2006, European Parliament, Final A6-0229/2006 (Rapporteur: Andrzej Jan Szejna).

  35. See ‘Charlie McCreevy speaks to the European Parliament JURI Committee’, European Parliament JURI Committee (Committee on Legal Affairs), Brussels, 21 November 2006, available at: http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/06/720&format?=H&format=H.

  36. See supra section 3 and the text accompanying nn. 28–30.

  37. See COM (2005) 535 final, loc. cit. n. 26, Annex 2; see also ‘First progress report on the strategy for the simplification of the regulatory environment’, 14 November 2006, COM (2006) 690 final.

  38. See Commissioner McCreevy’s speech, loc. cit. n. 35.

  39. European Commission, Impact Assessment Guidelines, 15 June 2005, SEC/2005/791, and also http://ec.europa.eu/governance/impact/index_en.htm.

  40. See First progress report, loc. cit. n. 37, at p. 13.

  41. References are available at: http://ec.europa.eu/enterprise/regulation/better_regulation/index_en.htm.

  42. See Commissioner McCreevy’s speech, loc. cit. n. 35.

  43. See supra section 2.2.1.

  44. See supra section 2.2.2.

  45. See supra section 2.2.5.

  46. On this point, see most recently H.J Sonnenberger and F. Bauer, ‘Vorschlag des Deutschen Rates für IPR für eine Regelung des internationalen Gesellschaftsrechts auf europäischer/nationaler Ebene’, 52 Recht der Internationalen Wirtschaft (RIW) (2006) Supp. 1 to Vol. 4, pp. 1–24.

  47. See Entwurf eines Gesetzes zur Modernisierung des GmbH-Rechts und zur Bekämpfung von Mißbräuchen (MoMiG) [Draft Law to Modernise the Limited Company Law and Combat Misuse] of 29 May 2006, Art. 1 § 4a GmbHG, and Art. 5 § 5 AktG, available at: http://www.bmj.bund.de/media/archive/1236.pdf.

  48. Proposal for a Fourteenth European Parliament and Council Directive on the transfer of the registered office of a company from one Member State to another with a change of applicable law, 20 April 1997, Doc. XV D2/6002/97, en-Rev 2.

  49. 2003 Action Plan, loc. cit. n. 4, at p. 29.

  50. See Summary Report, loc. cit. n. 33, at pp. 16–18.

  51. See Council Regulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for a European company (SE), OJ 2001 L 294/1.

  52. See European Parliament resolution, loc. cit. n. 34, at Nos. 32 and 33.

  53. See Commissioner McCreevy’s speech, loc. cit. n. 35.

  54. See 2003 Action Plan, loc. cit. n. 4, at p. 29.

  55. For information on the study, see http://ec.europa.eu/enterprise/entrepreneurship/craft/index.htm and the executive summary of the findings, ‘Feasibility Study of a European Statute for SMEs’, available at: http://ec.europa.eu/enterprise/entrepreneurship/craft/craft-priorities/doc/en_resume_rapport_final.pdf.

  56. See Summary Report, loc. cit. n. 33, at pp. 24–26.

  57. See European Parliament resolution, loc. cit. n. 34, at No. 28.

  58. European Parliament, Committee on Legal Affairs, Report with recommendations to the Commission on the European private company statute (2006/2013(INI)), 29 November 2006 (Rapporteur: Klaus-Heiner Lehne).

  59. See Commissioner McCreevy’s speech, loc. cit. n. 35.

  60. See Action Plan, loc. cit. n. 4, at p. 30.

  61. Summary Report, loc. cit. n. 33, at p. 26.

  62. European Parliament resolution, loc. cit. n. 34, at No. 34.

  63. See Commissioner McCreevy’s speech, loc. cit. n. 35.

  64. On this point, see supra nn. 7, 8.

  65. This is addressed in detail in the Summary Report, loc. cit. n. 33, at p. 10 et seq. (right to appoint a special auditor; election and removal of directors; communication between shareholders; competence of the general meeting; right to demand entry in the shareholders’ register and the rights consequent upon such entry; rights protecting minorities and rights affecting the exercise of voting, such as securities lending, recognition of shareholder associations, disclosure of shareholder identity and the information duties of institutional investors vis-à-vis investors and beneficiaries).

  66. Proposal for a Directive, loc. cit. n. 7, at p. 3.

  67. See the Impact Assessment on the Shareholders’ Voting Rights Directive, loc. cit. n. 22, point 6.3 ‘Secondary Issues’, at p. 34 et seq.

  68. See High Level Report loc. cit. n. 1, at p. 73 et seq.

  69. See Summary Report, loc. cit. n. 33, at p. 13 et seq.; Parliament Resolution, loc. cit. n. 34, at No. 20.

  70. On this point, see supra section 2.2.5.

  71. See Action Plan, loc. cit. n. 4, at p. 16.

  72. See Summary Report, loc. cit. n. 33, at p. 14 et seq.; for information on a number of jurisdictions regarding impediments to appointment as a sanction for evasion, see European Parliament resolution, loc. cit. n. 34, at No. 19.

  73. See Action Plan, loc. cit. n. 4, at p. 29.

  74. See Summary Report, loc. cit. n. 33, at p. 18 et seq.

  75. See European Parliament resolution, loc. cit. n. 34, at No. 26.

  76. See supra section 2.2.3.

  77. See the country reports in K.J. Hopt and C. Voigt, eds., Prospekt- und Kapitalmarktinformationshaftung (Tübingen, Mohr Siebeck 2005).

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  78. Details are available at: http://ec.europa.eu/internal_market/auditing/liability/index_en.htm.

  79. London Economics and R. Ewert, ‘Study on the Economic Impact of Auditors’ Liability Regimes. Final report to EC-DG Internal Market and Services’, MARKT/2005/24/F (2006), available at: http://ec.europa.eu/intemal_market/auditing/docs/liability/auditors-final-report_en.pdf.

  80. On this point, see Commissioner McCreevy’s speech, loc. cit. n. 35.

  81. See Action Plan, loc. cit. n. 4, at p. 19, and the Parliament decision, loc. cit. n. 30, at No. 35.

  82. See Action Plan, loc. cit. n. 4, at p. 20.

  83. See Action Plan, loc. cit. n. 4, at p. 22, n. 25.

  84. See Summary Report, loc. cit. n. 33, at p. 15 et seq. and p. 22.

  85. See Directive 2006/46/EC, loc. cit. n. 12.

  86. For Germany, see § 21 et seq. of the Securities Trading Act, as to be amended by way of the Act to Implement the Transparency Directive, available at: http://www.bundesfmanz_ministerium.de/lang_de/DE/Geld_und_Kredit/Aktuelle_Gesetze/003,templateld=raw,property=publicationFile.pdf.

  87. ‘BRITE’ stands for ‘Business Register Interoperability Throughout Europe’. On this project, see: http://www.briteproject.net/uploads/brite_sweg_2006.pdf/uploads/brite_sweg_2006.pdf.

  88. See Directive 2006/46/EC, loc. cit. n. 12.

  89. See Action Plan, loc. cit. n. 4, at p. 25.

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Baums, T. European Company Law Beyond the 2003 Action Plan. Eur Bus Org Law Rev 8, 143–160 (2007). https://doi.org/10.1017/S1566752907001437

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