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Certain aspects of company law concerning limited liability companies

Certain aspects of company law concerning limited liability companies

 

SUMMARY OF:

Directive (EU) 2017/1132 – codification of certain aspects of company law concerning limited liability companies

WHAT IS THE AIM OF THE DIRECTIVE?

In the interest of legal clarity and certainty, the directive codifies a series of previous directives on certain aspects of European company law. These directives concerned key areas of European company law, such as:

  • disclosure of information on companies in the business registers;
  • capital maintenance;
  • divisions of companies;
  • mergers within one country; as well as
  • cross-border mergers.

In these areas, in order to allow companies to exercise their freedom of establishment in the EU’s single market, the codified directives harmonised in particular the safeguards required of limited liability companies* across the EU for the protection of the interests of their shareholders and others, including third parties.

It repeals these directives and replaces them without changingtheir content.

KEY POINTS

The directive codifies and replaces the following six directives:

  • Directive 82/891/EEC concerning the division of public limited liability companies*;
  • Directive 89/666/EEC concerning disclosure requirements for branches opened in an EU country by certain types of company governed by the law of another country;
  • Directive 2005/56/EC on cross-border mergers of limited liability companies;
  • Directive 2009/101/EC on coordination of safeguards which are required by EU countries of companies within the meaning of the second paragraph of Article 48 of the Treaty on the Functioning of the European Union, with a view to making such safeguards equivalent;
  • Directive 2011/35/EU concerning mergers of public limited liability companies;
  • Directive 2012/30/EU on coordination of safeguards which are required by EU countries of companies within the meaning of the second paragraph of Article 54 of the Treaty on the Functioning of the European Union, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital.

The directive lays down measures in order to have equivalent safeguards required by EU countries, for the protection of the interests of their shareholders and third parties, in respect of the following:

  • establishing public limited liability companies and maintaining and modifying their capital;
  • disclosure requirements for public and private limited liability companies in general and for branches opened in an EU country by public and private limited liability companies governed by the law of a country in the EU or by equivalent non-EU companies;
  • mergers of public limited liability companies within one EU country (different types of mergers, procedure and documents necessary for a merger);
  • mergers of limited liability companies based in different EU countries (conditions applicable, procedure and documents necessary for a cross-border merger, taking effect and consequences of a cross-border merger, etc.);
  • divisions of public limited liability companies within one EU country (different types of divisions, procedure and documents necessary for a division, etc.).

FROM WHEN DOES THE DIRECTIVE APPLY?

It has applied since 20 July 2017. Because it codifies existing legislation, there is no deadline by which EU countries have to incorporate it into national law. The time limits by which the repealed directives had to be incorporated into national law are recalled in its Annex III.

BACKGROUND

Codification is the process of bringing together a legislative act — or two or more related acts — and all related amendments in a single new act without introducing any real changes. In the area of company law, where the relevant rules are spread across many different legal acts — with the first directives dating from the 1960s and 1970s, and many amendments made since — it was not easy for users to have a clear overview of European law in this policy area. The new directive now brings together the rules established by the repealed directives, without changing their content or adding new rules.

For more information, see:

KEY TERMS

Limited liability company: a company with share capital and with legal personality possessing separate assets which alone serve to cover its debts.
Public limited liability company: a limited liability company which has offered shares to the general public.

MAIN DOCUMENT

Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law (codification) (OJ L 169, 30.6.2017, pp. 46–127)

RELATED DOCUMENTS

Consolidated version of the Treaty on the Functioning of the European Union — Part Three — Union policies and internal actions — Title IV — Free movements of persons, services and capital — Chapter 2 — Right of establishment — Article 50 (ex Article 44 TEC) (OJ C 202, 7.6.2016, p. 68)

Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, pp. 1-88)

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Action Plan: European company law and corporate governance — a modern legal framework for more engaged shareholders and sustainable companies (COM(2012) 740 final, 12.12.2012)

Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (OJ L 281, 23.11.1995, pp. 31-50)

Successive amendments to Directive 95/46/EC have been incorporated into the original document. This consolidated version is of documentary value only.

last update 29.01.2018

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