61974J0032

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COMPANIES WITHIN THE MEANING OF THE SECOND PARAGRAPH OF ARTICLE 58 OF THE EEC TREATY - COMPULSORY DISCLOSURE - EXTENT - PROVISIONS AS TO REPRESENTATION - APPOINTMENT OF A SINGLE DIRECTOR

( FIRST COUNCIL DIRECTIVE OF 9 MARCH 1968, ARTICLE 2 ( 1 ) ( D ), SECOND SENTENCE )

IN VIEW OF THE INTENSIFICATION OF TRADE PATTERNS FOLLOWING THE CREATION OF THE COMMON MARKET AND IN THE INTEREST OF LEGAL TRANSACTIONS BETWEEN NATIONALS OF DIFFERENT MEMBER STATES, IT IS IMPORTANT THAT ANY PERSON WISHING TO ESTABLISH AND DEVELOP TRADING RELATIONS WITH COMPANIES SITUATED IN OTHER MEMBER STATES SHOULD BE ABLE EASILY TO OBTAIN ESSENTIAL INFORMATION RELATING TO THE CONSTITUTION OF TRADING COMPANIES AND TO THE POWERS OF PERSONS AUTHORIZED TO REPRESENT THEM : THE RELEVANT INFORMATION SHOULD THEREFORE BE EXPRESSLY STATED IN OFFICIAL REGISTERS OR RECORDS, EVEN IF CERTAIN INFORMATION FOLLOWS AUTOMATICALLY FROM NATIONAL LEGISLATION OR MAY APPEAR SELF-EVIDENT .

ARTICLE 2 ( 1 ) ( D ), SECOND SENTENCE, OF THE FIRST COUNCIL DIRECTIVE OF 9 MARCH 1968 ON COORDINATION OF SAFEGUARDS WHICH, FOR THE PROTECTION OF THE INTERESTS OF MEMBERS AND OTHERS, ARE REQUIRED BY MEMBER STATES OF COMPANIES WITHIN THE MEANING OF THE SECOND PARAGRAPH OF ARTICLE 58 OF THE TREATY, WITH A VIEW TO MAKING SUCH SAFEGUARDS EQUIVALENT THROUGHOUT THE COMMUNITY, MUST BE INTERPRETED AS MEANING THAT WERE THE BODY AUTHORIZED TO REPRESENT A COMPANY MAY CONSIST OF ONE OR OF SEVERAL MEMBERS, DISCLOSURE MUST BE MADE NOT ONLY OF THE PROVISIONS AS TO REPRESENTATION APPLICABLE IN THE EVENT OF THE APPOINTMENT OF SEVERAL DIRECTORS, BUT ALSO, IN THE EVENT OF THE APPOINTMENT OF A SINGLE DIRECTOR, OF THE FACT THAT THE LATTER REPRESENTS THE COMPANY ALONE, EVEN IF HIS AUTHORITY TO DO SO CLEARLY FLOWS FROM NATIONAL LAW .

IN CASE 32/74

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE BUNDESGERICHTSHOF ( FEDERAL SUPREME COURT ) FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT IN THE MATTER OF THE ENTRY ON THE COMPANIES REGISTER OF

FRIEDRICH HAAGA GMBH, A PRIVATE LIMITED LIABILITY COMPANY, SPECIALIZING IN THE MANUFACTURE OF STERILIZING EQUIPMENT, HAVING ITS HEAD OFFICE AT STUTTGART,

ON THE INTERPRETATION OF ARTICLE 2 ( 1 ) ( D ) OF THE FIRST COUNCIL DIRECTIVE OF 9 MARCH 1968 COORDINATION OF SAFEGUARDS WHICH, FOR THE PROTECTION OF THE INTERESTS OF MEMBERS AND OTHERS, ARE REQUIRED BY MEMBER STATES OF COMPANIES WITHIN THE MEANING OF THE SECOND PARAGRAPH OF ARTICLE 58 OF THE TREATY, WITH A VIEW TO MAKING SUCH SAFEGUARDS EQUIVALENT THROUGHOUT THE COMMUNITY,

1 BY ORDER OF 14 FEBRUARY 1974, REGISTERED AT THE COURT ON 14 MAY, THE BUNDESGERICHTSHOF, PURSUANT TO ARTICLE 177 OF THE EEC TREATY, REFERRED A QUESTION ON THE INTERPRETATION OF ARTICLE 2 ( 1 ) ( D ), SECOND SENTENCE, OF THE FIRST COUNCIL DIRECTIVE OF 9 MARCH 1968 ON COORDINATION OF SAFEGUARDS WHICH, FOR THE PROTECTION OF THE INTERESTS OF MEMBERS AND OTHERS, ARE REQUIRED BY MEMBER STATES OF COMPANIES, WITH A VIEW TO MAKING SUCH SAFEGUARDS EQUIVALENT THROUGHOUT THE COMMUNITY ( OJ L 65, P . 8 ) CONCERNING COMPULSORY DISCLOSURE OF CERTAIN INFORMATION RELATING TO BODIES AUTHORIZED TO REPRESENT THE COMPANY IN DEALINGS WITH THIRD PARTIES .

2 IT APPEARS FROM THE ORDER FOR REFERENCE THAT THIS QUESTION WAS REFERRED AS THE RESULT OF AN OBJECTION RAISED IN NON-CONTENTIOUS PROCEEDINGS AGAINST AN ORDER ISSUED BY THE REGISTRAR OF COMPANIES, REQUIRING THE PRIVATE LIMITED LIABILITY COMPANY CONCERNED TO INDICATE THE DIRECTORS' POWER OF REPRESENTATION AND, IN PARTICULAR, TO SPECIFY THAT, IN THE EVENT OF ONLY ONE DIRECTOR BEING APPOINTED, HE IS AUTHORIZED TO REPRESENT THE COMPANY ALONE . THE COMPANY OPPOSED THIS REQUIREMENT ON THE GROUND THAT THE ENTRY DEMANDED WAS SUPERFLUOUS, SINCE FROM THE WORDING OF THE ENTRIES ON THE REGISTER IT WAS ALREADY CLEAR THAT IF ONLY ONE DIRECTOR WAS APPOINTED, HE ALONE REPRESENTED THE COMPANY, ACCORDING TO THE LEGISLATION IN FORCE IN THE FEDERAL REPUBLIC OF GERMANY .

3 THE BUNDESGERICHTSHOF, TO WHICH THIS OBJECTION WAS TAKEN ON FINAL APPEAL, FACED WITH DIVERGENT INTERPRETATIONS OFFERED BY VARIOUS COURTS, CONSIDERED IT NECESSARY TO OBTAIN AN INTERPRETATION OF THE RELEVANT PROVISIONS OF THE DIRECTIVE OF 9 MARCH 1968 SO AS TO ENSURE THAT THE LAW ADOPTED FOR THE IMPLEMENTATION OF THAT DIRECTIVE BY THE FEDERAL REPUBLIC OF GERMANY SHOULD BE APPLIED IN A MANNER WHICH CONFORMED TO THE REQUIREMENTS OF COMMUNITY LAW . TO THIS END, THE BUNDESGERICHTSHOF ASKED WHETHER ARTICLE 2 ( 1 ), ( D ), SECOND SENTENCE, OF THE DIRECTIVE MUST BE INTERPRETED AS MEANING THAT IN CASES WHERE THE BODY AUTHORIZED TO REPRESENT A COMPANY MAY CONSIST OF ONE OR OF SEVERAL MEMBERS AND WHERE IN THE EVENT OF ONLY ONE MEMBER BEING APPOINTED NATIONAL LAW COMPULSORILY LAYS DOWN HIS EXCLUSIVE AUTHORITY TO REPRESENT THE COMPANY, THERE MUST BE DISCLOSURE NOT ONLY OF THE PROVISIONS AS TO THE REPRESENTATION OF THE COMPANY APPLICABLE IN THE EVENT OF THE APPOINTMENT OF SEVERAL MEMBERS, BUT ALSO OF THE FACT THAT IN THE EVENT OF THE APPOINTMENT OF A SINGLE MEMBER HE REPRESENTS THE COMPANY ALONE, OR WHETHER THE LAST-MENTIONED PARTICULARS MAY BE OMITTED, ON THE GROUND THAT THE POSSIBILITY OF ONLY ONE PERSON BEING APPOINTED TO THE BODY AUTHORIZED TO REPRESENT THE COMPANY, AS WELL AS HIS SOLE AUTHORITY TO REPRESENT THE COMPANY, FOLLOWS AUTOMATICALLY FROM THE ENTRY RELATING TO THE POWER ON THE PART OF SEVERAL PERSONS TO REPRESENT THE COMPANY, WHEN READ IN CONJUNCTION WITH THE LEGAL PROVISIONS .

4 ARTICLE 2 ( 1 ) OF THE DIRECTIVE OF 9 MARCH 1968 LAYS DOWN THAT :

" MEMBER STATES SHALL TAKE THE MEASURES REQUIRED TO ENSURE COMPULSORY DISCLOSURE BY COMPANIES OF AT LEAST THE FOLLOWING DOCUMENTS AND PARTICULARS :

......

( D ) THE APPOINTMENT, TERMINATION OF OFFICE AND PARTICULARS OF THE PERSONS WHO EITHER AS A BODY CONSTITUTED PURSUANT TO LAW OR AS MEMBERS OF ANY SUCH BODY :

- ARE AUTHORIZED TO REPRESENT THE COMPANY IN DEALINGS WITH THIRD PARTIES AND IN LEGAL PROCEEDINGS;

- TAKE PART IN THE ADMINISTRATION, SUPERVISION OR CONTROL OF THE COMPANY ".

THE SECOND SENTENCE OF ARTICLE 2 ( 1 ) ( D ), THE INTERPRETATION OF WHICH IS SOUGHT, ADDS THAT " IT MUST APPEAR FROM THE DISCLOSURE WHETHER THE PERSONS AUTHORIZED TO REPRESENT THE COMPANY MAY DO SO ALONE OR MUST ACT JOINTLY ".

5 ACCORDING TO THE RULES OF LEGAL CONSTRUCTION, THE EXPRESSION " PERSONS WHO ARE AUTHORIZED TO REPRESENT THE COMPANY " MUST BE UNDERSTOOD AS BEING A GENERIC EXPRESSION, SO THAT THE GRAMMATICAL PLURAL MAY INDICATE, WITHOUT DISTINCTION, THE CASE OF A SINGLE PERSON AND THAT SEVERAL PERSONS AUTHORIZED TO REPRESENT THE COMPANY . THIS PROVISION THEREFORE IMPLIES THAT, IN THE EVENT OF A SINGLE PERSON BEING AUTHORIZED TO REPRESENT THE COMPANY, THE POWER OF REPRESENTATION OF THAT PERSON IS REQUIRED TO BE MADE KNOWN EXPRESSLY .

6 THIS INTERPRETATION IS IN CONFORMITY WITH THE OBJECTIVE OF THE DIRECTIVE, WHICH IS TO GUARANTEE LEGAL CERTAINTY IN DEALINGS BETWEEN COMPANIES AND THIRD PARTIES IN VIEW OF THE INTENSIFICATION OF TRADE BETWEEN MEMBER STATES FOLLOWING THE CREATION OF THE COMMON MARKET . IN VIEW OF THIS FACT, IT IS IMPORTANT THAT ANY PERSON WISHING TO ESTABLISH AND DEVELOP TRADING RELATIONS WITH COMPANIES SITUATED IN OTHER MEMBER STATES SHOULD BE ABLE EASILY TO OBTAIN ESSENTIAL INFORMATION RELATING TO THE CONSTITUTION OF TRADING COMPANIES AND TO THE POWERS OF PERSONS AUTHORIZED TO REPRESENT THEM . IN THE INTEREST OF LEGAL TRANSACTIONS BETWEEN NATIONALS OF DIFFERENT MEMBER STATES, IT IS THEREFORE IMPORTANT THAT ALL THE RELEVANT INFORMATION SHOULD BE EXPRESSLY STATED IN OFFICIAL REGISTERS OR RECORDS, EVEN IF CERTAIN INFORMATION FOLLOWS AUTOMATICALLY FROM NATIONAL LEGISLATION OR MAY APPEAR SELF-EVIDENT . IN FACT, THIRD PARTIES CANNOT BE EXPECTED TO HAVE A FULL KNOWLEDGE OF THE LEGISLATIONS OR CURRENT COMMERCIAL PRACTICES OF OTHER MEMBER STATES . IT THEREFORE APPEARS NECESSARY TO REQUIRE, INSOFAR, AS THE POWER OF REPRESENTATION OF DIRECTORS OF A LIMITED LIABILITY COMPANY IS CONCERNED, THAT AN ENTRY SHOULD APPEAR ON THE COMPANIES REGISTER CONVEYING THIS INFORMATION TO THIRD PARTIES, EVEN IF IT SEEMS POSSIBLE TO DEDUCE THIS INFORMATION, IN THE ABSENCE OF ANY ENTRY ON THE REGISTER, BY LOGICAL REASONING OR REFERENCE TO NATIONAL LAW .

7 THE ANSWER TO THE QUESTION REFERRED SHOULD THEREFORE BE THAT ARTICLE 2 ( 1 ) ( D ), SECOND SENTENCE, OF THE FIRST COUNCIL DIRECTIVE OF 9 MARCH 1968 ON COORDINATION OF COMPANY LAW MUST BE INTERPRETED AS MEANING THAT WHERE THE BODY AUTHORIZED TO REPRESENT A COMPANY MAY CONSIST OF ONE OR OF SEVERAL MEMBERS, DISCLOSURE MUST BE MADE NOT ONLY OF THE PROVISIONS AS TO REPRESENTATION APPLICABLE IN THE EVENT OF THE APPOINTMENT OF SEVERAL DIRECTORS, BUT ALSO, IN THE EVENT OF THE APPOINTMENT OF A SINGLE DIRECTOR, OF THE FACT THAT THE LATTER REPRESENTS THE COMPANY ALONE, EVEN IF HIS AUTHORITY TO DO SO CLEARLY FLOWS FROM NATIONAL LAW .

8 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES, WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE, AND AS THESE ( PROCEEDINGS ARE IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE BUNDESGERICHTSHOF, COSTS ARE A MATTER FOR THAT COURT .

ON THOSE GROUNDS,

THE COURT

IN ANSWER TO THE QUESTION REFERRED TO IT BY THE SECOND CIVIL SENATE OF THE BUNDESGERICHTSHOF BY ORDER OF 14 FEBRUARY 1974 HEREBY RULES :

ARTICLE 2 ( 1 ) ( D ), SECOND SENTENCE, OF THE FIRST COUNCIL DIRECTIVE OF 9 MARCH 1968 ON COORDINATION OF SAFEGUARDS WHICH, FOR THE PROTECTION OF THE INTERESTS OF MEMBERS AND OTHERS, ARE REQUIRED BY MEMBER STATES OF COMPANIES WITHIN THE MEANING OF THE SECOND PARAGRAPH OF ARTICLE 58 OF THE TREATY, WITH A VIEW TO MAKING SUCH SAFEGUARDS EQUIVALENT THROUGHOUT THE COMMUNITY, MUST BE INTERPRETED AS MEANING THAT WHERE THE BODY AUTHORIZED TO REPRESENT A COMPANY MAY CONSIST OF ONE OR OF SEVERAL MEMBERS, DISCLOSURE MUST BE MADE NOT ONLY OF THE PROVISIONS AS TO REPRESENTATION APPLICABLE IN THE EVENT OF THE APPOINTMENT OF SEVERAL DIRECTORS, BUT ALSO, IN THE EVENT OF THE APPOINTMENT OF A SINGLE DIRECTOR, OF THE FACT THAT THE LATTER REPRESENTS THE COMPANY ALONE, EVEN IF HIS AUTHORITY TO DO SO CLEARLY FLOWS FROM NATIONAL LAW .