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SEEUROPE Council Directives in Company Law and Workers’ Participation Overview by Johannes Heuschmid (March 2006) The presentation provides an overview of the most important – both already adopted and upcoming – council directives in corporate law. The purpose of each directive is explained briefly, and a link to the legal text is provided. We focus on each directive’s impact on worker participation rights, as far as this is relevant. European Trade Union Institute for Research, Education and Health and Safety http://www.etui-rehs.org
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SEEUROPE Overview I: Directives already adopted First Council Directive – Disclosure (68/151/EEC) Second Council Directive – Capital (77/91/EEC) Third Council Directive – Domestic Mergers (78/855/EEC) Fourth Council Directive – Annual Accounts (78/660/EEC) Sixt Council Directive – Divison (82/891/EEC) Seventh Council Directive – Consolidated Accounts (83/349/EEC) Eighth Council Directive – Qualifications of Auditors (84/253/EEC) Eleventh Council Directive – Branches (89/666/EEC) Twelfth Council Directive – Single Member Limited Liability Companies (89/667/EEC) SE Directive (2001/86/EC) Thirteenth Council Directive – Takeover Bids (2004/25/EC) Tenth Council Directive – Cross Border Mergers (2005/56/EC)
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SEEUROPE Overview II: Directives coming up Forteenth Directive – Cross-border Transfer of the Registered Offices of Limited Liability Companies (under consultation) Board responsibilities, improvement of financial information and corporate governance directive proposal COM (2004) 725 COM (2004) 725 Company capital directive proposal COM (2004) 730COM (2004) 730 Shareholders’ rights directive proposal COM (2005) 685COM (2005) 685
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SEEUROPE Overview III: Failed Directives Fifth Directive (structure of public limited liability companies) Ninth Directive (group law)
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SEEUROPE Overview IV: Measures planned in the longer term One share, one vote Alternative system for minimum capital Choice between one-tier and two-tier systems
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SEEUROPE First Directive – Disclosure – of 9.3.1968 (68/151/EEC)68/151/EEC Purpose To coordinate the Regulations concerning disclosure, organs’ powers of representation and the nullity of companies with limited liability. Legal basis Art. 44 II lit.g EC (former Art. 54 III lit.g EEC) Amendments Directive 73/101/EEC Directive 2003/58/EC
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SEEUROPE Second Directive – Capital – of 13.12.1976 (77/91/EEC)77/91/EEC Purpose Harmonisation of public liability companies in the EC, as well as the maintenance and alteration of their capital. Legal basis Art. 44 II lit.g EC (former Art. 54 III lit.g EEC) Amendments Directive 92/101/EEC Proposal COM (2004)730
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SEEUROPE Third Directive – Domestic Mergers – of 9.10.1978 (78/855/EEC)78/855/EEC Purpose To lay down rules concerning mergers between public limited liability companies from the same Member State. Legal basis Art. 44 II lit.g EC (former Art. 54 III lit.g EEC) Amendments No
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SEEUROPE Fourth Directive – Annual Accounts – of 25.6.1978 (78/660/EEC)78/660/EEC Purpose To coordinate Member States' provisions concerning the presentation and content of annual accounts and annual reports, the valuation methods used and their publication in respect of all companies with limited liability. Legal basis Art. 44 II lit.g EC (former Art. 54 III lit.g EEC) Amendments Directive 83/349/EEC Directive 84/569/EEC Directive 89/666/EEC Directive 90/604/EEC Directive 90/605/EEC Directive 94/8/EC Directive 2001/65/EC Directive 2003/38/EC Directive 2003/51/EC Proposal COM (2004) 725
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SEEUROPE Sixth Directive – Division – of 17.12.1982 (82/891/EEC)82/891/EEC Purpose To lay down rules concerning divisions of public limited liability companies from the same Member State. Legal basis Art. 44 II lit.g EC (former Art. 54 III lit.g EEC) Amendments No Employee participation A division could have impact on the participation rights. This depends on the thresholds of the national participation laws.
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SEEUROPE Seventh Directive – Consolidated Accounts – of 13.6.1983 (83/349/EEC)83/349/EEC Purpose To coordinate national laws on consolidated (i.e. group) accounts. Together with the Fourth Directive on the annual accounts of public limited liability companies, it belongs to the family of "accounting directives" formed by the Community legal acts on company accounts. Legal basis Art. 44 II lit.g EC (former Art. 54 III lit.g EEC) Amendments Directive 89/666/EEC Directive 90/604/EEC Directive 90/605/EEC Directive 2001/65/EC Directive 2003/51/EC Proposal COM (2004)725
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SEEUROPE Eighth Directive – Qualifications of Auditors – of 10.4.1984 (84/253/EEC)84/253/EEC Purpose To define the qualifications of persons responsible for carrying out the statutory audits of the accounting documents required by the fourth and seventh Directives. Legal basis Art. 44 II lit.g EC (former Art. 54 III lit.g EEC) Amendments Proposal COM (2004)177
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SEEUROPE Eleventh Directive – Disclosure Requirements in Respect of Branches – of 21.12.1989 (89/666/EEC)89/666/EEC Purpose To lay down rules concerning the disclosure requirements imposed in a Member State in respect of branches of companies governed by the laws of another State in order to provide an equivalent level of protection for shareholders and third parties. Legal basis Art. 44 II lit.g EC (former Art. 54 III lit.g EEC) Amendments no
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SEEUROPE Twelfth Directive – Single Member Limited Liability Companies – of 21.12.1989 (89/667/EEC)89/667/EEC Purpose To create a legal instrument allowing the limitation of the individual entrepreneur’s liability throughout the Community. Legal basis Art. 44 II lit.g EC (former Art. 54 III lit.g EEC) Amendments no
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SEEUROPE SE Directive of 8.10.2001 (2001/86/EC)2001/86/EC Purpose To complement the Statute on the European Company with regard to the involvement (participation) of employees in the European company. Legal basis Art. 308 EC (this is the wrong basis: the right one would be Art. 137 I lit.f EC) Amendments no Employee participation Several models of participation by agreement are possible, the most important being the board-level representation of employees. If there is no satisfactory arrangement, a set of standard rules on participation becomes applicable. Mandatory information and consultation standards.
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SEEUROPE Thirteenth Directive – Takeover Bids – of 21.04.2004 (2004/25/EC)2004/25/EC Purpose To achieve greater legal certainty with regard to takeover bids, while protecting the interests of shareholders (and particularly minority shareholders), employees and any other interested parties. Legal basis Art. 44 I EC Amendments no Employee participation employees or their representatives of the offeree and the offeror company must be informed about the bid; employees or their representatives have the right to draft an opinion relating to the takeover.
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SEEUROPE Tenth Directive – Cross-border Mergers – of the 25.11.2005 (2005/56/EC) Purpose To create a legal instrument to facilitate cross-border mergers of commercial companies. Legal basis Art. 44 EC Amendmnets No. Employee participation Provisions pretty close to the SE. In cases in which participation rights are concerned the SE procedure will apply. That means, first negotiations, after which, if no agreement is reached, a set of standard rules apply.
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SEEUROPE Forteenth Directive – Cross-border Transfer of the Registered Offices of Limited Companies Purpose To make it possible for a company to choose the national law which, in its view, best meets its requirements and to relieve companies of the obligation, when carrying out such a transfer, to go through liquidation proceedings. Legal basis Art. 44 EC (probably) State of the art Subject to a consultation.consultation Employee participation Provisions probably pretty close to the 10th. If the transfer results in a reduction or lost of participation rights the SE procedure will apply. That means, first negotiations, after which, if no agreement is reached, the participation rights of the previous company will apply.
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