European Economic Interest Grouping

SUMMARY OF:

Regulation (EEC) No 2137/85 – the European Economic Interest Grouping

WHAT IS THE AIM OF THE REGULATION?

• It introduces a legal instrument at EU level in the form of a European Economic Interest Grouping (EEIG) designed to minimise the legal, fiscal and psychological difficulties that natural persons, companies, firms and other bodies face in cooperating across borders.

KEY POINTS

An EEIG must be formed in accordance with the rules described below.

Purpose

The purpose of the grouping is to facilitate or develop the economic activities of its members by a pooling of resources, activities or skills. This is intended to produce better results than the members acting alone.

Formation

• An EEIG can be formed by companies, firms and other legal entities governed by public or private law which have been formed in accordance with the law of an EU country and which have their registered office in the EU. It can also be formed by individuals carrying on an industrial, commercial, craft or agricultural activity or providing professional or other services in the EU.
• An EEIG must have at least 2 members from different EU countries.
• The contract for the formation of an EEIG must include its name, its official address and objects, the name, registration number and place of registration, if any, of each member of the grouping and the duration of the grouping, except where this is indefinite. The contract must be filed at the registry designated by each EU country. Registration in this manner confers full legal capacity on the EEIG throughout the EU.
• An EEIG may not invite investment by the public.
• An EEIG does not necessarily have to be formed with capital. Members are free to use alternative means of financing.

Employees

An EEIG cannot employ more than 500 persons.

Publication of formation and dissolution

When a grouping is formed or dissolved, a notice must be published in the Official Journal of the EU.

Official address

A grouping’s official address must be within the EU. It may be transferred from one EU country to another subject to certain conditions.

Voting rights and organs

Each member of an EEIG has 1 vote, although the contract for its formation may give certain members more than 1 vote provided that no 1 member holds a majority of the votes. The regulation lists those decisions for which unanimity is required.

The EEIG must have at least 2 organs:

• the members acting collectively and
• the manager or managers.

The managers represent and bind the EEIG in its dealings with third parties even where their acts do not fall within the objects of the grouping.

Profits

It is not intended that the grouping should make profits for itself. The profits of an EEIG will be deemed to be the profits of its members and will be apportioned either according to the relevant clause in the contract or, failing such a clause, in equal shares. The profits or losses of an EEIG will be taxable only in the hands of its members.

Unlimited joint and several liability

As a counterweight to the contractual freedom which is at the basis of the EEIG and the fact that members are not required to provide a minimum amount of capital, each member of the EEIG has unlimited joint and several liability for its debts.

BACKGROUND

This regulation meets the need for the harmonious development of economic activity throughout the EU and the establishment of a single market offering conditions analogous to those of a national market.

MAIN DOCUMENT

Council Regulation (EEC) No 2137/85 of 25 July 1985 on the European Economic Interest Grouping (EEIG) (OJ L 199, 31.7.1985, pp. 1–9)

last update 20.06.2016