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European Company framework now in place in UK


New rules setting out a framework for a new type of company – the European Company, or "Societas Europaea" – were laid before the UK Parliament on Monday. The rules come into effect from 8th October this year.

It took 30 years before European Member States were able to agree on the controversial European Company Statute, which is intended to give companies operating in more than one Member State the option of being established as a single company under Community law and so able to operate throughout the EU with one set of rules and a unified management and reporting system.

The UK's version of the rules comes in the form of the European Public Limited-Liability Company Regulations 2004, laid before Parliament on Monday.

The regulations provide for a European public limited liability company registered in any one of the Member States. It will have a minimum share capital of €120,000, a separate and distinct legal personality and will be available to commercial bodies with operations in more than one Member State. Its use will be entirely voluntary.

Under the rules, the name of an SE will be preceded or followed by "SE" and only SEs will be permitted to include the abbreviation SE in their name. Once an SE has been formed it may transfer its registered office from one Member State to another without the winding up of the SE or the creation of a new legal person.

According to the Department of Trade and Industry, the SE might appeal to UK companies wishing to take over a company from another Member State, or wishing to establish a joint venture with a company in another Member State.

The DTI suggests that the new form of company might also appeal to UK businesses wishing to operate in several Member States simultaneously.

The final Regulations are not yet available on-line but details of the DTI's earlier consultation on the European Company, and responses to it, can be found at: www.dti.gov.uk/cld/published.htm

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