Abstract
The European Cooperative Society (SCE) is a European Union (EU) legal form of business organization provided for by Council Regulation n. 1435/2003 of 22 July 2003 (SCE R). This chapter first discusses structure and objectives of the SCE R by dwelling upon the sources of the SCE law and their interplay. It concludes that the complexity of the SCE R has led to its non-use in practice which however does not undermine its “symbolic” value. The chapter subsequently analyzes the regulation of an SCE from the perspective of the cooperative identity. Conclusions on the present and future of the SCE R follow.
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Notes
- 1.
The SCE R may currently be found at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:207:0001:002:en:PDF; in general, EU legislation and official texts, including those cited in this chapter, are available at http://eur-lex.europa.eu/.
The acronym “SCE” derives from the Latin Societas Cooperativa Europaea and is used in the very title, as well as in the text (see art. 1, par. 1), of the SCE R to refer to the subject under regulation.
- 2.
- 3.
“SE” stands for Societas Europaea. Like the SCE R, the SE R is supplemented by Council Directive n. 2001/86/EC of 8 October 2001 on the involvement of employees.
- 4.
Chômel (2004), pp. 1ff., provides a brief history of the process leading to the approval of the SCE R.
- 5.
See SCE R, recital 6 in the preamble.
- 6.
“Each member shall have one vote”, as stipulated by art. 17, par. 1, EEIG R; however, art. 17 permits derogation by contract, provided that no one member holds a majority of the votes.
- 7.
On the SPE see COM(2008) 396/3 containing a Proposal for a Council Regulation on the Statute for a European Private Company, which is currently available at http://ec.europa.eu/internal_market/company/docs/epc/proposal_en.pdf.
As regards the European Foundation there is a recent proposal for a Council Regulation: COM(2012) 35 final, of 8 February 2012. In its opinion of 18 September 2012, the European Economic and Social Committee has recommended “that the European Parliament and the Council adopt the proposal without delay”.
The last known draft statutes for a European Association and a European Mutual Society date back to 1992. The European Parliament (EP) has recently argued anew in favor of the adoption of European statutes for mutual societies, associations and foundations: see EP Written Declaration n. 84/2010, currently available at http://www.europeanstatuteswrittendeclaration.eu/. The European Commission has manifested renewed interest in the European statutes on associations, foundations and mutual societies as possible legal forms for running a social enterprise: see COM(2011) 682 final, of 25 October 2011 on Social Business Initiative, which moreover envisages the adoption of an autonomous European statute for social enterprises.
The EP and the EC have, in addition, promoted a study on the current situation and prospects of mutual societies in Europe, submitted in November 2012 by Panteia, the results of which are currently found at http://ec.europa.eu/enterprise/policies/sme/files/mutuals/prospects_mutuals_fin_en.pdf. This study concludes substantially in favor of introducing a European Mutual by stating: “Although the study has not found conclusive evidence that a proposed Statute would overcome the principal barriers identified, the study does recognize that it could help mutual-type organizations to gain recognition, to increase the understanding concerning mutual-type organizations in the countries and to better respect mutual-type organizations interests at European level” (ivi, p. 163). To be noted that enlarging the scope of the SCE R “so that mutual-type organizations can choose this possibility to form a grouping based on mutualistic principles” is regarded in the same study as a possible way to allow the grouping of mutual-types organizations, both within a country and across borders (ivi, p. 162).
- 8.
In its Report on A Modern Regulatory Framework for Company Law in Europe (Brussels, 4 November 2002, currently available at http://ec.europa.eu/internal_market/company/docs/modern/report_en.pdf), the High Level Group of Company Law Experts had already observed: “a European form of Association and a European form of Mutual Society are not regarded by the Group as priorities for the short term and medium term. The impact of the [at-that-time] forthcoming SCE Regulation on the cooperative enterprise should be studied closely before putting further efforts into creating these other European forms” (ivi, p. 24). More recently, in its opinion on the above-mentioned proposal for a European statute on foundations (see the preceding fn. for the reference), the Republic of Lithuania puts forward the lack of unpopularity of the existing EU legal forms as an additional reason against the adoption of such a European statute (see http://www.europarl.europa.eu/committees/en/documents-search.html#sidesForm).
- 9.
On the protectionist attitude of (some) MSs and its general impact on company law, see the ample and interesting analysis by Armour and Ringe (2011).
- 10.
Thus performing the obligation imposed by art. 296, par. 2, Treaty on the Functioning of the European Union (TFUE): “Legal acts shall state the reasons on which they are based and shall refer to any proposals, initiatives, recommendations, requests or opinions required by the Treaties”.
- 11.
It must be noted, however, that the SCE R also applies to the European Economic Area (EEA) countries, namely, Iceland, Liechtenstein and Norway, and therefore is an optional instrument also for individuals and legal bodies of those countries.
- 12.
Only the mode of formation provided for by art. 2, par. 1, 5th indent, SCE R, could be meant as if it implied the transnational nature of the business, but in effect, also in this case, the formal existence of a foreign establishment or subsidiary is sufficient for the legal requirement to be met.
- 13.
As for the minimum number of founders, this is five in the case of formation ex novo by natural persons (art. 2, par. 1, 1st indent, SCE R), or by natural persons, companies, firms and other legal bodies (art. 2, par. 1, 2nd indent, SCE R), or by companies, firms and other legal bodies (art. 2, par. 1, 3rd indent, SCE R); two in the case of formation by merger (art. 2, par. 1, 4th indent, SCE R); while, obviously, the conversion regards one cooperative (art. 2, par. 1, 5th indent, SCE R).
- 14.
See also recital 11 in the preamble, stating that, “cross-border cooperation between cooperatives in the Community is currently hampered by legal and administrative difficulties which should be eliminated in a market without frontiers”.
- 15.
Furthermore, the EU legislature explicitly links its intervention to the United Nations’ invitation to all governments to ensure a supportive environment in which cooperatives can participate on an equal footing with other enterprise forms, as contained in the Resolution adopted by the General Assembly of the 88th plenary meeting of the United Nations, 19 December 2001 (A/RES/56/114): see recitals 6 and fn. 11 in the preamble to the SCE R.
- 16.
See recital 9 in the preamble to the SCE R, where the use of “secondary” or “second-degree” cooperative refers to a cooperative constituted of cooperatives.
- 17.
Indeed, the majority of national cooperative laws do not require any minimum capital to establish a cooperative. Where minimum capital is required, the strictest provision in this regard is 18,500 euros: see on this point, Cooperatives Europe et al. (2010), pp. 126–127, currently available at http://ec.europa.eu/enterprise/policies/sme/files/sce_final_study_part_i.pdf.
- 18.
The influence of the SE R is clear in this regard. The SE is evidently designed as a second degree company as emerges, among other things, from the rules on its formation: see for this conclusion, among others, Bianca and Zanardo (2011), p. 135.
- 19.
Indeed, individuals may establish an EEIG only if they carry on an industrial, commercial, craft or agricultural activity or provide professional or other services, that is to say, if they are entrepreneurs: see art. 4(1)(b), EEIG R; therefore, the EEIG could not serve as a substitute for worker cooperatives or user/consumer cooperatives, but only for cooperatives among enterprises or sole entrepreneurs. Individuals and sole entrepreneurs are not contemplated among the potential founders of an SE by the SE R. By contrast, the proposed SPE R includes individuals among the potential founders of an SPE: see art. 3(1)(e), COM(2008) 396/3.
- 20.
Reference is made here to past-Soviet EU countries, where cooperatives were substantially under the public control and used to implement public policies. This is recognized by the EC in its Communication on the promotion of cooperative societies in Europe, COM(2004) 18 final, of 23 February 2004, currently available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2004:0018:FIN:EN:PDF, where it is stated: “Co-operatives have faced particular problems in the former planned economies of central Europe. Although they were often the most free form of enterprise permitted under central planning, they have since suffered from their identification with the old system. In this respect the potential of new co-operative initiatives to assist the balanced development of the economies and societies of the new Member States and candidate countries must also be emphasized” (ivi, p. 7). This is also the probable reason for the emphasis given by the International Cooperative Alliance’s Statement on the Cooperative Identity (which may be currently be found at http://2012.coop/en/what-co-op/co-operative-identity-values-principles) to the voluntary character of the cooperative formation, which intends to stress the private, and not public, nature of a cooperative organization. This Statement was adopted by the International Cooperative Alliance (ICA) in 1995, replacing the former of 1966 (replacing that of 1937), and then endorsed by a resolution of the United Nations (U.N. resolution n. 56/114 adopted at the 88th Plenary meeting of the U.N. General Assembly on 19th December 2001) and fully incorporated into International Labor Organization’s Recommendation n. 193/2002 of 20 June 2002 (on which see Henrÿ (2013)).
- 21.
See Sect. 1, fn. 5.
- 22.
See COM(2004) 18 final, cit., p. 13.
- 23.
The benefits of this model are underlined in the 193/2002 ILO Recommendation, where it is stated: “a balanced society necessitates the existence of strong public and private sectors, as well as a strong cooperative, mutual and the other social and non-governmental sector”, and more recently in Stiglitz (2009), p. 348: “my research showed that one needed to find a balance between markets, government, and other institutions, including not-for-profits and cooperatives, and that the successful countries were those that had found that balance”; and in addition: “success, broadly defined, requires a more balanced economy, a plural economic system with several pillars to it. There must be a traditional private sector of the economy, but the two other pillars have not received the attention which they deserve: the public sector, and the social cooperative economy, including mutual societies and not-for-profits” (ivi, p. 356).
- 24.
As recently envisaged by the EC itself in COM (2011) 682 final of 25 October 2011: see fn. 7.
- 25.
See Court of Justice of the European Union, 8 September 2011 (C-78/08 to C-80/08), currently available at http://curia.europa.eu/juris/liste.jsf?language=en&jur=C,T,F&num=C-78/08&td=ALL.
- 26.
See EUCJ, 8 September 2011, cit., reformulating the main questions at par. 38. The tax measures at issue were provided for by art. 11, Presidential Decree n. 601/1973. On the main tax measures applicable to Italian cooperatives, see Fici (2013d).
- 27.
See EUCJ, 8 September 2011, cit., par. 82 and final ruling.
- 28.
See EUCJ, 8 September 2011, cit., par. 43.
- 29.
EUCJ, 8 September 2011, cit., paragraphs 44–47, where references to settled case law.
- 30.
EUCJ, 8 September 2011, cit., par. 49, where there is also reference to previous case law.
- 31.
To be sure, in so doing, the Court also relies on the Communication of 2004 from the EC, cit. in fn. 20.
- 32.
See EUCJ, 8 September 2011, cit., par. 56.
- 33.
See EUCJ, 8 September 2011, cit., par. 57–58.
- 34.
See EUCJ, 8 September 2011, cit., par. 57.
- 35.
See ibidem.
- 36.
See EUCJ, 8 September 2011, cit., par. 59.
- 37.
See ibidem.
- 38.
See EUCJ, 8 September 2011, cit., par. 60.
- 39.
EUCJ, 8 September 2011, cit., par. 61.
- 40.
EUCJ, 8 September 2011, cit., par. 62.
- 41.
Indeed, the EUCJ affirms: “it is for the referring court to determine, in the light of all the circumstances of the disputes on which it is required to rule whether, on the basis of the criteria set out at paragraphs 55 to 62 above, the producers’ and workers’ cooperative societies at issue in the main proceedings are in fact in a comparable situation to that of profit-making companies liable to corporation tax”: see EUCJ, 8 September 2011, cit., par. 63. In Italy, the answer would be negative, as the Italian law cooperative is clearly different from for-profit companies and substantially corresponds to the model delineated by the EUCJ.
- 42.
Inevitably—as the EUCJ case of 8 September 2011, cit., leans toward holding national measures in favor of cooperatives potentially compatible with EU law—it may be regarded as an incentive in this direction. It must also be noted that, given the difference of a cooperative, particular treatment of cooperatives would not be a “scandal”, but simple application of the principle of equal treatment being substantially interpreted as it should be, in the sense that different situations require different regulations. Moreover, public support of cooperatives would promote market pluralism.
- 43.
An additional profile of the judgment which must be mentioned is that, according to the EUCJ, tax exemptions need to be justified by the nature or general scheme of the system of which they form a part (EUCJ, 8 September 2011, cit., par. 64ff.). With regard, at least, to the Italian legal system, this justification can easily be found in many provisions of the Italian Constitution; first of all, art. 45 obliging, and not only authorizing, the Italian legislature to promote cooperatives (see Fici 2013d); secondly, art. 3, par. 2, combined with art. 53 permitting different tax treatment for different situations; thirdly, art. 2, about organizations that contribute to the development of human personality, as cooperatives are (see Fici (2011), pp. 33ff.).
- 44.
Otherwise there are, of course, no reasons for subtracting cooperatives from the ordinary, or common, regime applicable to business organizations and companies.
- 45.
See Proposal for a Council Directive on a Common Consolidated Corporate Tax Base (CCCTB), COM(2011) 121 final, of 16 March 2011, currently available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0121:FIN:EN:PDF.
- 46.
See COM(2011) 121 final, cit., art. 2 and annex 1.
- 47.
See on this point Fici (2013a).
- 48.
See on this point Fici (2013a).
- 49.
This would particularly be the case where the directive provided compulsory and not optional rules, which is an alternative not completely ignored by the EP, especially with regard to the European forms: SE and SCE (see the EP legislative resolution of 19 April 2012 at http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2012-135&language=EN&ring=A7-2012-0080).
- 50.
See, in particular, recitals 2, 3, and 6. See also COM(2004) 18 final, cit., p. 11: “This heterogeneity [in the legislation governing cooperatives] may result in obstacles to efficient operation of co-operatives on a cross-border or European level as the rights and obligations of members, directors and third parties become unclear”.
- 51.
See Fici (2013b), p. 37ff.
- 52.
Art. 54, TFEU, states: (1) “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. (2) ‘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”.
- 53.
Art. 50, par. 2, TFEU, stipulates: “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”.
- 54.
It must be noted that, if art. 50, par. 2, g), TFEU, were applied to cooperatives, it would assume a broader and partially different meaning relative to its application to companies. In cooperatives relevant interests to be safeguarded would not only be those of creditors, but also those of people interested in becoming members, in light of the cooperative principle of the “open door”. Similarly, cooperative member interests are not only economic, which implies that harmonization of cooperative laws by directives, if ever envisaged, could not be confined to the financial aspects of cooperative regulation, but should take into consideration non-financial profiles as well.
- 55.
Cooperatives are only rarely dealt with in company law directives, and mainly with the view of allowing MSs to exempt cooperatives from their application: see art. 1, par. 2, of the Second Council Directive 77/91/EEC of 13 December 1976, on the formation of companies and the maintenance and alteration of their capital, last amended by Directive 2009/109/EC of 16 September 2009, where it states that “the Member States may decide not to apply this Directive to … cooperatives incorporated as one of the types of company listed in paragraph 1. In so far as the laws of the Member States make use of this option, they shall require such companies to include the words … ‘cooperative’ in all documents indicated in Article 4 of Directive 68/151/EEC”; art. 1, par. 2, of the Third Council Directive 78/855/EEC of 9 October 1978, concerning (domestic) mergers of companies, amended several times and finally repealed and replaced by the codifying Directive 2011/35/EU, stating that: “The Member States need not apply this Directive to cooperatives incorporated as one of the types of company listed in paragraph 1. In so far as the laws of the Member States make use of this option, they shall require such companies to include the word ‘cooperative’ in all the documents referred to in Article 5 of Directive 2009/101/EC”; art. 1, par. 14, and art. 3, par. 4, b), of the Eight Council Directive 84/253/EEC of 10 April 1984, on auditors, repealed and replaced by Directive 2006/43/EC of 17 May 2006, on statutory audits of annual and consolidated accounts, which thus tries to adapt audit regulation to the specificities of the cooperative movement, especially in some countries. For more references to cooperatives in EU directives, see the following fn. 59 and 62.
- 56.
See First Council Directive 68/151/EEC of 9 March 1968, dealing with compulsory disclosure of documents and particulars by companies, the validity of the obligations entered into by a company, and the nullity of the company, now repealed and substituted by the codifying Directive 2009/101/EC of 16 September 2009.
- 57.
The main arguments in favor of this ambitious program of harmonization of domestic company laws were the reduction of costs associated with cross-border activities and the concern about a “race to the bottom” which might follow from regulatory arbitrage/forum shopping compelling states to make their company laws less restrictive: see Armour and Ringe (2011).
- 58.
Then retired by COM(2001) 763 final/2 of 21 December 2001.
- 59.
See Armour and Ringe (2011), p. 4. See the Feedback Statement from the EC of 15 November 2011, providing the summary of responses to the green paper on the EU corporate governance framework, currently available at http://ec.europa.eu/internal_market/company/docs/modern/20111115-feedback-statement_en.pdf; the 13th OPA Directive 2004/25/EC of 21 April 2004, on takeover bids, which mentions cooperatives in art. 11, par. 7, explicitly excluding the application of the rules in art. 7 to cooperatives; and the 10th proposed directive retired by COM(2001) 763 final of 11 December 2001, but then cross-border mergers Directive 2005/56/EC of 26 October 2005, on cross-border mergers of limited liability companies, last amended by Directive 2012/17/EU of 13 June 2012, this last directive deals with cooperatives in art. 3, par. 2, which states: “Member States may decide not to apply this Directive to cross-border mergers involving a cooperative society even in the cases where the latter would fall within the definition of ‘limited liability company’ as laid down in Article 2(1)”.
- 60.
See COM(2003) 284 final, currently available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2003:0284:FIN:EN:PDF. The 2002 report from the High Level Group may currently be found at http://ec.europa.eu/internal_market/company/docs/modern/report_en.pdf.
- 61.
See, in these terms, Armour and Ringe (2011), p. 2.
- 62.
As examples of this approach see Directive 2007/36/EC of 11 July 2007, on certain shareholder rights in listed companies; this directive deals with cooperatives in art. 1, par. 3, c), stating that MSs may exempt cooperative societies from this directive; and Directive 2012/17/EU of 13 June 2012, on the interconnection of central, commercial and companies registers.
- 63.
This was favored by the EUCJ case law on freedom of establishment (beginning with Centros in 1999). Armour and Ringe (2011), pp. 6–16, provides a useful and complete review of the most important decisions of the EUCJ on the company freedom of establishment, from Daily Mail in 1988 to Cartesio in 2008. Now in Vale (EUCJ, 12 July 2012, C-378/2010), the EUCJ affirms: “Articles 49 TFEU and 54 TFEU are to be interpreted as precluding national legislation which enables companies established under national law to convert, but does not allow, in a general manner, companies governed by the law of another Member State to convert to companies governed by national law by incorporating such a company”. Is it the end of history for the corporate mobility issue? Can this determine the uselessness of the provisions on the transferability of the registered office in the SE and the SCE Rs, which moreover are cumbersome regulations?
- 64.
See the EC’s feedback statement “Summary of responses to the public consultation on the future of European company law”, currently available at http://ec.europa.eu/internal_market/consultations/docs/2012/companylaw/feedback_statement_en.pdf. And the subsequent Action Plan: European Company Law and Corporate Governance, COM(2012) 740 final, of 12 December 2012, currently available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0740:FIN:EN:PDF.
- 65.
On all these aspects, see Fici (2013b).
- 66.
This justifies the fact that the SCE R is based on art. 352 TFEU, instead of art. 114 TFEU: see EUCJ, 2 May 2006 (C-436/03), where the Court argues that the Regulation “aims to introduce a new legal form in addition to the national forms of cooperative societies” (point 40); “leaves unchanged the different national laws already in existence” (point 44); and therefore “cannot be regarded as aiming to approximate the laws of the Member States applicable to cooperative societies, but has as its purpose the creation of a new form of cooperative society in addition to the national forms” (point 44). Moreover, according to the Court, this “finding is not affected by the fact that the contested regulation does not lay down exhaustively all of the rules applicable to European cooperative societies and that, for certain matters, it refers to the law of the Member State in the territory of which the European cooperative society has its registered office, since … that referral is of a subsidiary nature” (point 45).
- 67.
According to Bonfante (2006), p. 4, “In reality, the adoption of the SCE R represents a sort of falling back in front of the impossibility to pass a directive for the harmonization of national cooperative laws: Impossibility which has its roots in the profound divergences among the typologies of European models of cooperative” [translation by author].
- 68.
See COM(2004) 18 final, cit., p. 15: “it is expected that the Regulation has an indirect and gradual harmonizing effect, as it becomes a reference for future legislation, particularly in the new and candidate countries”. According to the High Level Group of Company Law Experts, in its 2002 report cit. in fn. 8, pp. 121–122: “It will be interesting to see how the SCE relates to the national forms of co-operatives. Will the SCE indeed be used for transnational restructurings and joint ventures? If so, this may enhance the competitiveness of co-operatives. But it might well be that the SCE will result in a de facto harmonization, given the fact that the national forms are still subject to mainly national rules. In other words, the SCE will compete with national forms in being the most effective instrument to organize a business activity. This could also lead, potentially, to a lack of balance between national legal forms of cooperatives and the SCE”.
- 69.
Which raises the questions: May horizontal competition occur without vertical competition? Is vertical competition (EU law vs national law) a precondition for horizontal competition to take place? This point has not been fully developed by scholars who write on this topic, and would deserve greater consideration.
- 70.
- 71.
As provided for by art. 6 SCE R, the registered office of an SCE shall be located within the Community in the same MS as its head office (“real seat” theory: see recital 14 in the preamble to the SCE R). In addition, a MS—by exercising an “option”: see later in the text—may impose on SCEs registered in its territory the obligation of locating the head office and the registered office in the same place. Article 11, par. 1, SCE R requires an SCE to be registered in the MS where it has the registered office in a register designated by the law of the MS in accordance with the law applicable to public limited-liability company. In effect, contrary to this provision, the MSs in which there is a specific register for cooperatives, have designated the register of cooperatives as register for the SCEs: see Cooperatives Europe et al. (2010), part I, pp. 76–77.
- 72.
See art. 5, par. 1, SCE R, according to which the word “statutes” means both the instrument of incorporation and, when they are subject to a separate document, the statutes of the SCE.
- 73.
More precisely, 31 SCEs, given that, as already observed, the SCE R also applies to EEA countries: see fn. 11.
- 74.
101 specific references were counted by Cooperatives Europe et al. (2010), part I, p. 55.
- 75.
Art. 54, par. 1, SCE R states: “An SCE shall hold a general meeting at least once each calendar year, within six months of the end of its financial year, unless the law of the Member State in which the SCE’s registered office is situated applicable to cooperatives carrying on the same type of activity as the SCE provides for more frequent meetings”.
- 76.
And, it must be added, to the extent that investor members are permitted by national law.
- 77.
“An SCE’s statutes may permit a company within the meaning of Article 48 of the Treaty to be a member of one of its organs, provided that the law applicable to cooperatives in the Member State in which the SCE’s registered office is situated does not provide otherwise”.
- 78.
Art. 65, par. 1, SCE R states: “Without prejudice to mandatory provisions of national laws, the statutes shall lay down rules for the allocation of the surplus for each financial year”.
- 79.
Another example is provided by art. 46, par. 3, according to which “An SCE’s statutes may, in accordance with the law applicable to cooperatives in the Member State, lay down special conditions of eligibility for members representing the administrative organ”.
- 80.
Cooperatives Europe et al. (2010), part I, pp. 59ff., presents the state of option implementation by MSs and EEA countries, also in comparison with SE R option implementation as resulting from the Ernst & Young’s Study on the operation and the impacts of the Statute for a European Society (SE) of 2009.
- 81.
“The registered office of an SCE shall be located within the Community, in the same Member State as its head office. A Member State may, in addition, impose on SCEs registered in its territory the obligation of locating the head office and the registered office in the same place”. See also, among the others, articles 37, par. 4, and 39, par. 4. Cooperatives Europe et al. (2010), part I, p. 59, identifies 30 options in total; in this study one can also find a classification of these options according to their object (ivi, pp. 58–59).
- 82.
Regardless of whether the national law gives the same permission to national law cooperatives, as art. 9 SCE R on non-discrimination must be interpreted in the sense that a worse treatment but not a better treatment of SCEs relative to national cooperatives is prohibited.
- 83.
See for example art. 8 of the Dutch SCE implementation Act of 14 September 2006, which states: “the statutes of a European Cooperative Society with registered office in the Netherlands may provide that the membership is available for non-using members, as referred to in article 14, paragraph 1, of the Regulation”. The same could happen with regard, for example, to art. 59, par. 2, on voting power.
- 84.
For example, in Lithuanian Law X-696 on SCEs, there is a provision (art. 1, par. 3) according to which “the European cooperative societies which have their registered office in the Republic of Lithuania shall be governed mutatis mutandis by the legal norms of the Republic of Lithuania regulating cooperative societies (cooperatives) and public limited liability companies to the extent that the Regulation permits and the Regulation, this Law and other legal acts regulating European cooperative societies do not establish otherwise”.
- 85.
This is particularly the case with Italy and Malta.
- 86.
At least, those that are prevalently mutual cooperatives: see Fici (2013d). The communication cited in the text is that of 30 June 2006, n. 2903 from the Ministry of the Economic Development, in Gazzetta Ufficiale n. 171 of 25 July 2006.
- 87.
A counterargument could be, however, that when MSs have designated the competent authority within the meaning of art. 7, par. 14(1), the designation is functionally equivalent to the exercise of the pertinent option. In Italy, this designation was made by the communication of the Ministry of the Economic Development of 26 March 2007, n. 57, in Gazzetta Ufficiale n. 82 of 7 April 2007.
- 88.
The SCE R itself identifies these criteria at times: see, for example, art. 50, par. 3, which mentions the same conditions applicable to cooperatives governed by the law of the MS concerned.
- 89.
An outline of the acts and measures adopted by MSs, updated as of May 2010, may be found in Cooperatives Europe et al. (2010), part I, pp. 46–47. EU regulations are European legislative acts which in principle, unlike directives, do not need to be implemented by MSs. In fact, an EU regulation “shall be binding in its entirety and directly applicable in all Member States” (art. 288, par. 2, TFEU). Yet, also with regard to regulations, MSs are obligated to adopt “all measures of national law necessary to implement legally binding Union acts” (art. 291, par. 1, TFEU). This obligation exists both in the case in which EU regulations do not expressly require a national implementing law, but this law turns out to be necessary in fact, and in the case in which they expressly require such a law, which is exactly the case of the SCE R in virtue of its art. 78, par. 1.
- 90.
A list of the competent authorities designated by the MSs in accordance with the cited provision may be found in Cooperatives Europe et al. (2010), part I, pp. 231ff.
- 91.
See Sect. 4.2 above.
- 92.
See, for references, Cooperatives Europe et al. (2010), part I, pp. 45ff. To the author’s knowledge, Greece, Italy, Luxembourg and Malta remain the only MSs which have not passed a truly SCE R implementation law. In contrast, according to the EC, as of December 2011, only three MSs have not yet taken the necessary step to ensure the effective application of the SCE R: see COM(2012) 72 final, of 23 February 2012, The application of Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE), p. 5. In any event, Croatia is now to be added to this list.
- 93.
This is the example of Belgium, Bulgaria and France, among others.
- 94.
Of course, being the principle of non-discrimination in art. 9 “subject to this Regulation”, a diverse and less favorable treatment of SCEs as compared to national cooperatives is possible only as far as this unequal treatment is determined by the SCE R itself.
- 95.
Therefore, a MS could not declare generally applicable to SCEs its national law on public limited-liability companies if its legal system embodies a particular law on cooperatives. Of course, when the national law on cooperatives provides for the residual application to cooperatives of company law (as in Italy, for example), company law would also apply to SCEs in virtue of this reference.
- 96.
On the contrary, there are specific provisions in the SCE R, like art. 37, par. 1 (see the formula “under the same conditions as for cooperatives” therein), which may be interpreted a contrario as if, when the SCE R does not specifically impose equal treatment (as in art. 37, par. 1), better treatment of SCEs relative to national cooperatives is possible. In contrast, worse treatment, as stated in the text, would be prohibited by art. 9.
- 97.
Moreover, in some cases, it is explicitly stated that national public limited-liability company law applies “by analogy”: see, e.g., articles 4, par. 6, and 5 par. 3, SCE R.
- 98.
But with regard to this provision, see following Sect. 4.3.4, on the interpretation of art. 8, par. 1, c), and the concept of partial regulation and aspects not covered therein. Other relevant examples are offered by art. 1, par. 2(3) and art. 45, par. 1, SCE R.
- 99.
See Sect. 4.3.1. above, and in particular points ii) and iii) therein.
- 100.
See Sect. 4.3.3.
- 101.
It is worth recalling that the SCE R only provides the substantive (or organizational) law of an SCE. See SCE R, recital 16 in the preamble: “This Regulation does not cover other areas of law such as taxation, competition, intellectual property or insolvency. The provisions of the Member States law and of Community law are therefore applicable in the above areas and in other areas not covered by this Regulation”.
- 102.
Art. 1, par. 3, continues as follows: “An SCE may also have as its object the satisfaction of its members’ needs by promoting, in the manner set forth above, their participation in economic activities, in one or more SCEs and/or national cooperatives. An SCE may conduct its activities through a subsidiary”.
- 103.
See also recital 10, 1st and 2nd indents, in the preamble to the SCE R. On the exact meaning and content of the “mutual” character, see Fici (2013a).
- 104.
See again Fici (2013a).
- 105.
The SCE R does not establish whether and to what extent user-members are obligated to transact with the SCE: this is a matter to be regulated by SCE statutes (art. 5, par. 4, 6th indent).
- 106.
- 107.
Since art. 1, par. 4, SCE R, also refers to the “extension of the benefits to non-members”, this is a provision which would also regard social SCEs, as mentioned above in the text. If art. 1, par. 3, SCE R, applies with the effects just described in the text, social SCEs could not be fully “altruistic”, as benefits should prevalently be directed towards members.
- 108.
Recital 9 in the preamble to the SCE R makes a reference to a “specified proportion of investor members”, which, however, is not specified in the text of the SCE R. The proportion in art. 59, par. 2(3) only refers to voting rights, although however contributes to limiting the influence of the investor members in the governance of an SCE.
- 109.
See Fici (2013a).
- 110.
See recital 10, 1st and 5th indents.
- 111.
The only reference is in art. 75, which however is not a compulsory provision as the chapter will soon highlight.
- 112.
Consequently, “no member shall be liable for more than the amount he/she has subscribed”, as stipulated by art. 1, par. 2(3), SCE R, which however admits a different provision in the SCE statutes. Legal personality is acquired upon registration in the MS in the register designated by the MS (art. 18, par. 1, SCE R).
- 113.
Unless the laws of the MS require a greater subscribed capital for legal bodies carrying on certain types of activity (art. 3, par. 3, SCE R), which is consistent with what has been provided for, in general, by art. 8, par. 2, SCE R.
- 114.
See Sect. 4.2.2 above.
- 115.
If national law provides for a higher percentage or does not set a limit to the amount of the legal reserve above which surplus allocation becomes optional (as in the Italian example: see Fici (2013d)), these provisions of national law are certainly applicable in light of the reference in art. 65, par. 1, SCE R, to “mandatory provisions of national law” (see in this sense also Cusa (2008)). It is not clear, in contrast, whether less restrictive national law rules would prevail over the SCE R provisions, especially when these less restrictive provisions are found in a legal framework which provides for further compulsory allocations, e.g., to educational or promotional funds, to the benefit of the community, etc. This must be seen as another example of the complexity of the interplay of EU and national sources in the regulation of an SCE.
- 116.
See Fici (2013a).
- 117.
This last provision could be very important in the perspective of the establishment and functioning of social SCEs. According to Cusa (2008), p. 16, this clause does not contrast with the mutual aim of an SCE as laid down by art. 1, par. 3, SCE R.
- 118.
This, notwithstanding the statements in the preamble to the SCE R (“there should be limited interest on loan and share capital”: so recital 10, 4th indent; and also recital 7, where reference is made to the distribution of the net profit “on an equitable basis”), which however should be used to complete said gap in the SCE R.
- 119.
To be sure, there are also legal scholars who are convinced that the SCE R does not offer any normative element to distinguish surplus and profit: see Cusa (2008), pp. 6ff.
- 120.
Residual assets are net assets after payment of all amounts due to creditors and reimbursement of members’ capital contributions (art. 75 SCE R).
- 121.
SCE statutes could also provide for the distribution of part of the annual profits to the cooperative movement or the community: art. 67 does not impede that (see Cusa (2008), pp. 36–37).
- 122.
See Fici (2013a).
- 123.
See recital 10, 6th indent.
- 124.
This last option is given to SCEs that undertake different activities or activities in more than one territorial unit, or have several establishments or more than 500 members, and if permitted by the applicable national law.
- 125.
Unless a MS exercises the option granted by art. 37, par. 2(2), SCE R, so as to require or permit the SCE statutes to provide that the members of the management organ are appointed and removed by the general meeting.
- 126.
See COM (2012) 740 final, cit., p. 14.
- 127.
See Cooperatives Europe et al. (2010), part I, pp. 151ff.
- 128.
The study is Cooperatives Europe et al. (2010), part I and part II. Information on the activities done during this process may be found in the relevant EC’s webpage dealing with the SCE R.
- 129.
Indeed, the EC has recently announced that it does not plan to revise the SCE R (as well as the SE R) in the short term: see COM(2012) 740 final, cit., p. 14.
- 130.
Such a campaign has been envisaged in the recent Action Plan on European Company Law from the EC: see COM(2012) 740 final, cit., p. 14.
- 131.
The project regarding this new type of European company does indeed include individuals among the potential founders of an SPE: see art. 3(1)(e), COM(2008) 396/3. The EUCJ’s case-law on the company freedom of establishment, and in particular the recent Vale decision (see fn. 63 for reference), do indeed reduce the advantage of the SCE (as well as of the SE) from the point of view of the free transfer of the registered office (see fn. 63).
- 132.
See Stiglitz (2009), pp. 345ff.
- 133.
It may suffice to mention here articles 2 and 3 of the Treaty on European Union and in particular art. 3, par. 3(1), stipulating: “The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance”.
- 134.
See in this vein Fajardo et al. (2012), pp. 609ff.
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Further Reading
Avsec F (2009) Die Europäische Genossenschaft innerhalb des Europäischen Wirtschaftsraumes [The European cooperative society within the European economic area]. Institut für Genossenschaftswesen, Marburg
Hopt K-J (2008) Comparative company Law. In: Reimann M, Zimmermann R (eds.) The Oxford handbook of comparative law (paperback edition). OUP, Oxford, pp 1161ff
Fici A (2013) Pan-European Cooperative Law: where do we stand? Euricse Working Paper no. 47/13, 2013. in www.ssrn.com
Fici A, Galletti D (eds) (2006) La società cooperativa europea [The European Cooperative Society]. Università degli Studi di Trento, Trento
Friebel J (2010) Die Vorgesellschaft zu einer SCE [The pre-SCE]. Nomos, Baden-Baden
Parleani G (2008) La société coopérative européenne “française” après la loi du 3 juillet 2008 [The “French” European cooperative society after the Law 3 July 2008]. Revue des sociétés 531ff
Sánchez RA (ed) (2008) La Sociedad Cooperativa Europea Domiciliada en España [The European cooperative society registered in Spain]. Thomson Aranzadi, Cizur Menor
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Fici, A. (2013). The European Cooperative Society Regulation. In: Cracogna, D., Fici, A., Henrÿ, H. (eds) International Handbook of Cooperative Law. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-30129-2_4
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