within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent(77/91/EEC) 3 Third Council Directive of 9 October 1978 based on Article 54 (3)(g) of the Treaty concerning mergers of public limited liability companies(78/855/EEC) 4 Fourth Council Directive of 25 July 1978 based on Article (3)(g) of the Treaty on accounts of certain types of companies(78/660/EEC) 5 Amended Proposal of 20 November 1991 for a Fifth Directive based on Article 54 of the EEC Treaty concerning the structure of public limited companies and the powers and obligations of their organs( COM(91)372 final) 6 Sixth Council Directive of 17 December 1982 based on Article 54(3)(g) of the Treaty, concerning the division of public limited liability companies(82/891/EEC) consolidated accounts( 83/349/EEC) une 1983 based on Article 54(3)(g)of the Treaty on 7 Seventh Council Directive of 13 Jr 8 Eighth Council Directive of 10 April 1984 based on Article 54(3)() of the Treaty on the approval of persons responsible for carrying out the statutory audits of accounting documents (84253/EEC)4 9 Amended predraft for a Ninth Directive on groups of companies(not published) 10 Proposal of 14 January 1985 for a Tenth Council Directive based on Article 54(3)(g) of the Treaty concerning cross-border mergers of public limited companies(COM(84)727 final) 1 1 Eleventh Council Directive of 21 December 1989 concerning disclosure requirements in respect of branches opened in a Member State by certain types of companies governed by the law of another State(89/666/EEC)* 12 Twelfth Company Law Directive of 21 December 1989 on single-member private limited liability companies(89/667/EEC)#7 38OJL26,31.1.1977,1-13 39OJL295,20.10.1978,36-43 40OJL22,14.8.1978,11-31. OJC321.30.1191.9 42OJL348.31.12.1982,47-54 43OJL193.18.7.1983.1-17 OJL126.12.5.1984.20-26 OJC23,25.1.1985, OJL395,30.12.1989,36-39 OJL395,30.12.1989,40-42 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 10 within the meaning of the second paragraph of Article 58 of the Treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent (77/91/EEC)38 3° Third Council Directive of 9 October 1978 based on Article 54 (3) (g) of the Treaty concerning mergers of public limited liability companies (78/855/EEC)39 4° Fourth Council Directive of 25 July 1978 based on Article (3) (g) of the Treaty on annual accounts of certain types of companies (78/660/EEC)40 5° Amended Proposal of 20 November 1991 for a Fifth Directive based on Article 54 of the EEC Treaty concerning the structure of public limited companies and the powers and obligations of their organs (COM (91) 372 final)41 6° Sixth Council Directive of 17 December 1982 based on Article 54 (3) (g) of the Treaty, concerning the division of public limited liability companies (82/891/EEC)42 7° Seventh Council Directive of 13 June 1983 based on Article 54 (3) (g) of the Treaty on consolidated accounts (83/349/EEC)43 8° Eighth Council Directive 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 (84/253/EEC)44 9° Amended predraft for a Ninth Directive on groups of companies (not published) 10° Proposal of 14 January 1985 for a Tenth Council Directive based on Article 54 (3) (g) of the Treaty concerning cross-border mergers of public limited companies (COM(84) 727 final)45 11° Eleventh Council Directive of 21 December 1989 concerning disclosure requirements in respect of branches opened in a Member State by certain types of companies governed by the law of another State (89/666/EEC)46 12° Twelfth Company Law Directive of 21 December 1989 on single-member private limitedliability companies (89/667/EEC)47 38 OJ L 26, 31.1.1977, 1-13. 39 OJ L 295, 20.10.1978, 36-43. 40 OJ L 222, 14.8.1978, 11-31. 41 OJ C 321, 30.11.91, 9. 42 OJ L 348, 31.12.1982, 47-54. 43 OJ L 193, 18.7.1983, 1-17. 44 OJ L 126, 12.5.1984, 20-26. 45 OJ C 23, 25.1.1985, 11-15. 46 OJ L 395, 30.12.1989, 36-39. 47 OJ L 395, 30.12.1989, 40-42
13 Amended Proposal for a Thirteenth Directive of the European Parliament and of the Council on company law, concerning take-over bids 14 Council Directive of 8 November 1990 amending Directive 78/660/EEC on annual accounts and Directive 83/349/EEC on consolidated accounts as concerns the exemptions for small and medium sized companies and the publication of accounts in ecus(90/604/EEC) 15 Council Directive of 8 November 1990 amending directive 78/660/EEC on annual accounts and Directive 83/349/EEC on consolidated accounts as regards the scope of those Directives (90605/EC0 16 Predraft for a directive on the liquidation of companies' 17 Predraft for a fourteenth directive on the transfer of the seat Other instruments 18 European Convention on the Mutual Recognition of Companies and Legal Persons 19 Council Regulation 2137/85 EEC of 25 July 1985 on the European Economic Interest grouping 20 Draft Council Regulation on the Statute for a European Company 21Draft Council Directive supplementing the Statute for a European Company with regard to the involvement of employees Capital Market Law 1 Commission Recommendation of 25 July 1977 concerning a European code of conduct relating to transactions in transferable securities(77/534/EEC)7 2 Council Directive of 5 March 1979 coordinating the conditions for the admission of securities to official stock exchange listing(79/279/EEC) 8 On June 21, 2000 a common position was adopted by the Council: downloadable from http://www.europarleu.int/commonpositions/2000/defaulten.htm,procedurenumberCod1995/0341 OJL317,16.11.1990,57-59 OJL317.16.11.1990.60-62 51 See Doc Comm(85)310,final Not officially published; ZGR, 1999, 157, ZIP, 1997 53 Commission Bulletin 2/69 54 OJL 199 of 31 July 1985 Latest version February 1, 2001 56 Latest version February 1,2001 OJL212,20.8.1977,37-43 s8OJL66,16.3.1979,21-32 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 11 13° Amended Proposal for a Thirteenth Directive of the European Parliament and of the Council on company law, concerning take-over bids48 14° Council Directive of 8 November 1990 amending Directive 78/660/EEC on annual accounts and Directive 83/349/EEC on consolidated accounts as concerns the exemptions for small and mediumsized companies and the publication of accounts in ecus (90/604/EEC)49 15° Council Directive of 8 November 1990 amending Directive 78/660/EEC on annual accounts and Directive 83/349/EEC on consolidated accounts as regards the scope of those Directives (90/605/EEC)50 16° Predraft for a directive on the liquidation of companies51 17° Predraft for a fourteenth directive on the transfer of the seat52 Other instruments 18° European Convention on the Mutual Recognition of Companies and Legal Persons53 19° Council Regulation 2137/85 EEC of 25 July 1985 on the European Economic Interest grouping 54 20° Draft Council Regulation on the Statute for a European Company55 21°Draft Council Directive supplementing the Statute for a European Company with regard to the involvement of employees56 Capital Market Law 1° Commission Recommendation of 25 July 1977 concerning a European code of conduct relating to transactions in transferable securities (77/534/EEC)57 2° Council Directive of 5 March 1979 coordinating the conditions for the admission of securities to official stock exchange listing (79/279/EEC)58 48 On June 21, 2000 a common position was adopted by the Council: downloadable from http://www.europarl.eu.int/commonpositions/2000/default_en.htm , procedure number COD 1995/0341. 49 OJ L 317, 16.11.1990, 57-59. 50 OJ L 317, 16.11.1990, 60-62. 51 See Doc. Comm. (85) 310,final. 52 Not officially published; ZGR, 1999, 157; ZIP, 1997, 53 Commission Bulletin 2/69. 54 OJ L 199 of 31 July 1985, 1 55 Latest version February 1, 2001. 56 Latest version February 1, 2001 57 OJ L 212, 20.8.1977, 37-43. 58 OJ L 66, 16.3.1979, 21-32
3 Council Directive of 17 March 1980 coordinating the requirements for the drawing up, scrutiny an distribution of the listing particulars to be published for the admission of securities to the official stock exchange listing(80/390/EEC) 4 Council Directive of 5 February 1982 on information to be published on a regular basis companies the shares of which have been admitted to official stock-exchange listing(82/121/EEC) 5 Council Directive of 3 March 1982 amending Directive 79/279/EEC coordinating the conditions for the admission of securities to official stock exchange listing and Directive 80/390/EEC coordinating the requirements for the drawing up, scrutiny an distribution of the listing particulars to be published for the admission of securities to the official stock exchange listing(82/148/EEC) 6 Council Directive of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCIS)(8561EC)2 7 Council Recommendation of 20 December 1985, concerning the second paragraph of Article 25 (1)of Directive 85/61 1/EEC (85/612/EEC) 8 Council Directive of 22 June 1987 amending Directive 80/390/EEC coordinating the requirements for the drawing up, scrutiny an distribution of the listing particulars to be published for the admission of securities to the official stock exchange listing(87/345/EEC) 9 Council Directive of 22 March 1988 amending, as regards the investment policies of certain UCITS, Directive 80/390/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS (88/220/EEC 10 Council Directive of 12 December 1988 on the information to be published when a major holding in a listed company is acquired or disposed of ( 88/627/EEC) 1 1 Council Directive of 17 April 1989 coordinating the requirements for the drawing-up, scrutiny and distribution of the prospectus to be published when transferable securities are offered to the public(89/298/EEC)T 12 Council Directive of 13 November 1989 coordinating regulations on insider dealing (89/592/EEC8 OJL100,1741980,1-26 OJL48,20.2.1982,26-26 OJL62.5.3.1982.22-33 62OJL375,31.12.1985,3-18 63OJL375,31.12.1985,19 OJL185,4.7.1987,81-83 OJL100.194.1988,31-32. 6OJL348.1712.1988.62-65 67OJL124.5.5.19898-1 OJL334.18.11.1989.30-32 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 12 3° Council Directive of 17 March 1980 coordinating the requirements for the drawing up, scrutiny an distribution of the listing particulars to be published for the admission of securities to the official stock exchange listing (80/390/EEC)59 4° Council Directive of 5 February 1982 on information to be published on a regular basis by companies the shares of which have been admitted to official stock-exchange listing (82/121/EEC)60 5° Council Directive of 3 March 1982 amending Directive 79/279/EEC coordinating the conditions for the admission of securities to official stock exchange listing and Directive 80/390/EEC coordinating the requirements for the drawing up, scrutiny an distribution of the listing particulars to be published for the admission of securities to the official stock exchange listing (82/148/EEC)61 6° Council Directive of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (85/611/EEC)62 7° Council Recommendation of 20 December 1985, concerning the second paragraph of Article 25 (1) of Directive 85/611/EEC (85/612/EEC)63 8° Council Directive of 22 June 1987 amending Directive 80/390/EEC coordinating the requirements for the drawing up, scrutiny an distribution of the listing particulars to be published for the admission of securities to the official stock exchange listing (87/345/EEC)64 9° Council Directive of 22 March 1988 amending, as regards the investment policies of certain UCITS, Directive 80/390/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (88/220/EEC)65 10° Council Directive of 12 December 1988 on the information to be published when a major holding in a listed company is acquired or disposed of (88/627/EEC)66 11° Council Directive of 17 April 1989 coordinating the requirements for the drawing-up, scrutiny and distribution of the prospectus to be published when transferable securities are offered to the public (89/298/EEC)67 12° Council Directive of 13 November 1989 coordinating regulations on insider dealing (89/592/EEC)68 59 OJ L 100, 17.4.1980, 1-26. 60 OJ L 48, 20.2.1982, 26-26. 61 OJ L 62, 5.3.1982, 22-33. 62 OJ L 375, 31.12.1985, 3-18. 63 OJ L 375, 31.12.1985, 19. 64 OJ L 185, 4.7.1987, 81-83. 65 OJ L 100, 19.4.1988, 31-32. 66 OJ L 348, 17.12.1988, 62-65. 67 OJ L 124, 5.5.1989, 8-15. 68 OJ L 334, 18.11.1989, 30-32
13 Council Directive of 23 April 1990 amending Directive 80/390/EEC in respect of the mutual recognition of public-offer prospectuses as stock exchanges listing particulars(90/200/EEC)9 4 Council Directive of 30 May 1994 amending Directive 80/390/EEC coordinating the requirements for the drawing up, scrutiny an distribution of the listing particulars to be published for the admission of securities to the official stock exchange listing with regard to the obligation to publish listing particulars(94/18/EEC) 15 Council Directive 98/26 of 19 May 1998 on settlement finality in payment and securities settlement systems 10. Apart from directives, the other European regulatory tools have rarely been used. As Iready mentioned the experience with international treaties has been disappointin Recommendations on company law have not been published, differently from the securities field. 2 The regulation deserves special mention. According to art. 249, the regulation is binding in its entirety and directly applicable in all Member States. It constitutes a much more heavy-handed intervention in the States legal order; Therefore the Community has been careful not to use this instrument in traditional company law, but only in fields where new legal instruments have been introduced. The European Economic Interest Grouping, a new form of " company", was introduced by regulation". The same is planned for the European Company or SE, the corpus of which will be the subject of a regulation while the specific rules on co-determination will be introduced by way of a directive"4. By using the regulation, the Community also ensures that these new company forms will have to be recognised in all members states, and that its characteristics and rights and privileges are and remain beyond the scope of the State's intervention a private proposal has been published to introduce a specific type of private company limited, a"societe privee europeenne"by way of a regulation 69OJL112,3.5.1990,2425 10OJL135,31.5.1994,1-4 OJL166,11.6.1998,45-50. 72 The 1977 Commission Recommendation 77/534/EEC of 25 July 1977 concerning a European Code of Conduct relating to Transactions in transferable securities, OJEC, L 212, of 20.8. 1977; this recommendation has been mentioned in national case law to interpret some of the general obligations to which directors of companies are held: see Trib. Bruxelles, 24 July 1978, T.B.H., 1979, 386 See Council regulation 2137/85/EEC of 25 July 1985, on the European Economic Interest Grouping(EEIG), OJEC,L 199, of 31 July 1985. Whether the group is a company or not has been left to the decision of the member states: Belgium e. g; has, after some hesitation, decided for incorporation of the ElG in its national company law. One could argue that this qualification also applies to the EEIG, on the basis of art. 2, L. 12 July 1989, as modified by L. 7 May 1999 74 For more details see infra nr 42 es 75 See Gazette du Palais, numero special, nr. 17, 24 September 1998; CCIP/CNPF, Societe Privee Europeenne September 1998, TIMMERMAN, L. Een plan voor een Europese BV, Ondernemingsrecht 1999, 159 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 13 13° Council Directive of 23 April 1990 amending Directive 80/390/EEC in respect of the mutual recognition of public-offer prospectuses as stock exchanges listing particulars (90/200/EEC)69 14° Council Directive of 30 May 1994 amending Directive 80/390/EEC coordinating the requirements for the drawing up, scrutiny an distribution of the listing particulars to be published for the admission of securities to the official stock exchange listing with regard to the obligation to publish listing particulars (94/18/EEC)70 15° Council Directive 98/26 of 19 May 1998 on settlement finality in payment and securities settlement systems71 10. Apart from directives, the other European regulatory tools have rarely been used. As already mentioned the experience with international treaties has been disappointing. Recommendations on company law have not been published, differently from the securities field.72 The regulation deserves special mention. According to art. 249, the regulation is binding in its entirety and directly applicable in all Member States. It constitutes a much more heavy-handed intervention in the States' legal order; Therefore the Community has been careful not to use this instrument in traditional company law, but only in fields where new legal instruments have been introduced. The European Economic Interest Grouping, a new form of “company”, was introduced by regulation73. The same is planned for the European Company or SE, the corpus of which will be the subject of a regulation while the specific rules on co-determination will be introduced by way of a directive74. By using the regulation, the Community also ensures that these new company forms will have to be recognised in all members states, and that its characteristics and rights and privileges are and remain beyond the scope of the State's intervention. A private proposal has been published to introduce a specific type of private company limited, a "société privée européenne" by way of a regulation75. 69 OJ L 112, 3.5.1990, 24-25. 70 OJ L 135, 31.5.1994, 1-4. 71 OJ.L 166, 11.6. 1998, 45- 50. 72 The 1977 Commission Recommendation 77/534/EEC of 25 July 1977 concerning a European Code of Conduct relating to Transactions in transferable securities, OJEC, L 212, of 20.8.1977; this recommendation has been mentioned in national case law to interpret some of the general obligations to which directors of companies are held: see Trib. Bruxelles, 24 July 1978, T.B.H., 1979, 386. 73 See Council regulation 2137/85/EEC of 25 July 1985, on the European Economic Interest Grouping (EEIG), OJEC, L 199, of 31 July 1985. Whether the group is a company or not has been left to the decision of the member states: Belgium e.g; has, after some hesitation, decided for incorporation of the EIG in its national company law. One could argue that this qualification also applies to the EEIG, on the basis of art.2, L. 12 July 1989, as modified by L. 7 May 1999. 74 For more details see infra nr. 42 e.s. 75 See Gazette du Palais, numéro spécial, nr. 17, 24 September 1998; CCIP/CNPF, Société Privée Européenne, September 1998; TIMMERMAN, L. ‘Een plan voor een Europese BV’, Ondernemingsrecht 1999, 159
4. The role of the european directives in the community 's policies 11. Looking at the directives -both adopted and proposed -from the angle of the policies of the Community, one could first analyse them on the basis of the articles of the treaty pursuant to which they have been enacted Art 44 3)(g) being part of the rules on freedom of establishment, the directives could be expected to first aim for the liberalisation of cross border establishment of companies in Europe Article 95(ex 100 A)broadens the perspective to the"approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market In the first mentioned provision, the powers conferred are more clearly geared to that art. 44(3)(g) does not confer the power to co-ordinate all provisions of company a oo %i liberalisation in the sense that cross border establishment, transactions and relationships will more directly affected. Being part of the Treaty rules on freedom of establishment, one could argue ross the board, but only those matters that impact on the establishment of companies and firms, and structure of the corporation, corporate governance issues, the relationship between shareholders, or between shareholders and directors, and other similar matters, would be beyond the scope of this provision. This is also the reason why this provision could not offer the legal basis for an all- encompassing harmonisation of the company law of the member states. The Community could not intervene except to the extent that such intervention is useful to the liberalisation of cross border establishment The second Treaty, in art. 100 and 100 A(now art. 94-95), confers considerably broader powers as it allows the Community to adopt directives in all matters- and not only in company law provided these are related or contribute to the functioning of the internal market. On that basis one could argue that a more intensive harmonisation of company law belongs to the objectives pursued by these provisions. If, as was ably stated by Marcus Lutter/, Europe is on the way of creating a common body of ideas, concepts, principles, and even rules that are common to each of the member states, this evolution towards a common core of company law rule would be the further, but not the ultimate step to company law harmonisation in Europe. Although this evolution would go a long way towards creating a"uniform" company law, uniform rules could only be achieved as consequence of a long-term evolution. In the meantime the principal stepping-stones have been laid Lutter has stated his views in graphic terms characteristic of his writing style "the European enterprise law is developing from separate parts, from sandbanks and dunes, which will more and more grow together to islands which will already seek access to the firm shores of the mainland" 12. These two approaches are essentially different, but not contradictory. While the first focuses on a policy of liberalisation, of removing barriers to cross border relations, transactions, or establishment, and therefore would be focusing more on an item by item harmonisation, the second starts from an overall approach and attempts to harmonise company law in general, by slicing the subject in sub-items, where the rules are regrouped not according to their cross border features, but according to their function in company law in general. Sub-items that are very likely to affect cross border relations are not dealt with if they belong to a chapter in which harmonisation, for some 76 LUTTER, fn. 20, ZGR 2000, 1, comparing the present status of harmonisation to a"torso" e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 14 4. The role of the European directives in the Community's Policies 11. Looking at the directives - both adopted and proposed - from the angle of the policies of the Community, one could first analyse them on the basis of the articles of the Treaty pursuant to which they have been enacted. Art. 44 (3)(g) being part of the rules on freedom of establishment, the directives could be expected to first aim for the liberalisation of cross border establishment of companies in Europe. Article 95 (ex 100 A) broadens the perspective to the "approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market". In the first mentioned provision, the powers conferred are more clearly geared to liberalisation in the sense that cross border establishment, transactions and relationships will be more directly affected. Being part of the Treaty rules on freedom of establishment, one could argue that art. 44 (3) (g) does not confer the power to co-ordinate all provisions of company law, across the board, but only those matters that impact on the establishment of companies and firms, and therefore are more related to cross border subjects. Purely internal matters such as the internal structure of the corporation, corporate governance issues, the relationship between shareholders, or between shareholders and directors, and other similar matters, would be beyond the scope of this provision. This is also the reason why this provision could not offer the legal basis for an allencompassing harmonisation of the company law of the member states. The Community could not intervene except to the extent that such intervention is useful to the liberalisation of cross border establishment. The second Treaty, in art. 100 and 100 A (now art. 94-95), confers considerably broader powers as it allows the Community to adopt directives in all matters - and not only in company law - provided these are related or contribute to the functioning of the internal market. On that basis one could argue that a more intensive harmonisation of company law belongs to the objectives pursued by these provisions. If, as was ably stated by Marcus Lutter76, Europe is on the way of creating a common body of ideas, concepts, principles, and even rules that are common to each of the member states, this evolution towards a common core of company law rule would be the further, but not the ultimate step to company law harmonisation in Europe. Although this evolution would go a long way towards creating a “uniform” company law, uniform rules could only be achieved as a consequence of a long-term evolution. In the meantime the principal stepping-stones have been laid. Lutter has stated his views in graphic terms characteristic of his writing style “the European enterprise law is developing from separate parts, from sandbanks and dunes, which will more and more grow together to islands which will already seek access to the firm shores of the mainland”.77 12. These two approaches are essentially different, but not contradictory. While the first focuses on a policy of liberalisation, of removing barriers to cross border relations, transactions, or establishment, and therefore would be focusing more on an item by item harmonisation, the second starts from an overall approach and attempts to harmonise company law in general, by slicing the subject in sub-items, where the rules are regrouped not according to their cross border features, but according to their function in company law in general. Sub-items that are very likely to affect cross border relations are not dealt with if they belong to a chapter in which harmonisation, for some 76 LUTTER, fn. 20, ZGR 2000, 1, comparing the present status of harmonisation to a “torso