SPE – a uniform company throughout the EU

The initiative submitted within the European Small Business Support Program (Small Business Act), aims at enhancing the competitiveness of small business on the common market by simplifying the establishment procedure and overall facilitation of their operations. European private companies should operate under simple and flexible provisions of corporate law that is identical for all EU Member States. Major costs savings are expected due to elimination of different approaches by EU Member States and efficient operation and management of companies at a cross-border level between EU Member States. The draft Statute does not apply to labor, tax, accounting or insolvency issues that shall be governed by the relevant national law of EU Member States. The same applies to the rights and obligations of shareholders save for those arising from the Statutes.

The European Parliament’s amendments shall apply, without limitation, to the often-discussed amount of registered capital of European private companies of Euro 1 as per the original Commission’s proposal. Although MPs agreed to keep the low amount, but added the requirement that the statutes should impose a duty on the executive body to sign a solvency affidavit. If the Statues fail to include this duty, the registered capital shall amount to Euro 8,000. The Parliament further demands that a measure be introduced to discourage large corporations from abusing the SPE status to avoid their duties under national law. However, the same applies to the very SPEs as their office can be registered in an EU Member State other than the one in which they have their headquarters or principal establishment.

The resulting draft amendment is with the Council at present. However, the requirements by the European Parliament on certain issues are not binding on the Council since the negotiation procedure is merely of an advisory nature.