The European Commission has published a synthesis of the comments received in response to its consultation on the operation and impacts of the European Company. See about the consultation post 62.
Here are some of the findings:
Positive and negative drivers for setting up an SE
The respondents generally agreed with the findings of the study. In terms of the positive
drivers, many of them placed the possibility to transfer the seat and the European image
of the company at the top. Other positive drivers include an increased flexibility in
corporate governance, the potential for corporate simplification and regulatory
advantages in comparison with the equivalent national types of companies. It was also
found that tax regimes may play some part in the decision to set up an SE. Most of the
respondents highlighted the cost, complexity and uncertainty of the procedures linked to
setting up and running an SE as negative drivers. In that context, they also referred to the
lack of awareness on the SE form and criticised the obligation to have the real seat and
registered office in the same place. Finally, the involvement of employees features under
both positive and negative drivers depending on whether national law is more or less
flexible on this issue than the SE Statute. However, the study's finding that employee
involvement is a negative driver was contested by worker organisations and researchers
working in the field of labour law.
Which factors guide decisions on where to locate an SE?
Around half of the respondents contributed their observations on the regulatory issues
which are most important to a company in assessing location decisions. Business
associations clearly classified taxation at the top of the rank with national employment
law and company law featuring next on the list. It seems that the respondents often
placed more weight on achieving a combination of key positive elements for investment
rather than prioritising them. Thus, in addition to efficient tax rules, flexible employment
law, legal certainty and simplicity, low registration costs and reliability of regulatory
authorities feature highly on the list of factors which may determine the location of an
SE.
Regarding the impact of national rules on employee participation, the respondents held
divergent views. Business associations, companies and legal advisers agreed with the
study that employee participation plays a major part in location decisions whilst worker
organisations and researchers working in the field of labour law put more weight on the
lack of regulatory uniformity and on the inadequate knowledge of the system.
Further, over a third of the contributing respondents doubted on the relevance of
corporate governance to choosing a set-up location.
The majority of contributors agreed that the study has supplied explanations which
justify the current distribution of SEs in the EU/EEA and some of them also put forward
additional parameters. Those who disagreed with the reasoning of the study advanced the
argument that, whilst employment issues were over-emphasised, the analysis
underestimates genuine business reasons and does not sufficiently discuss shelf and
empty SEs.
What are the advantages of buying shelf SEs as compared to setting up SEs?
The principal reasons for giving preference to a ready-made shelf SE relate to saving
time in the process leading to the SE registration and avoiding complex and uncertain
formation procedures. Further, the cost of setting up a shelf SE is relatively smaller, as
compared to direct creation.
Which practical problems have you encountered in setting up and running an SE?
The 27 respondents who answered seem to agree that most of the problems stem from the
complex relationship between the SE Statute and 27 national legal systems which the
Statute often refers to. Specifically, the steps for implementing certain provisions of the
Statute do not often provide enough detail and, consequently, remain equivocal. In
addition, companies, having to go through administrative formalities in more than one
jurisdiction, are commonly faced with clashes amongst disparate national laws.
Problems relevant to the formation of an SE cover, in particular, cross-border mergers,
but also the conversion of a public company into an SE and the establishment of holding
and subsidiary SEs. The respondents also identified restrictions to the methods of
creating SEs (e.g. impossible to form an SE by way of division) as well as burdensome
conditions, such as the requirement for a cross-border element. The complexities around
employee involvement were also criticised.
According to the respondents, the running of an SE brings up numerous problems of
which some are fundamental to the functioning of the system. By way of example, there
are problems related to the activation of shelf SEs.
Recommendations for possible amendments of the SE Regulation
The following matters feature high on the list of suggestions for amendment to the SE Statute:
the possible ways of creating an SE; the prerequisite for cross-border activity; the high
threshold of the minimum capital requirement; and the prospects for separating the
registered office from the real seat, making the registration and activation of shelf SEs
contingent upon reaching an agreement on employee involvement. The recommendations
also include a clarification of the steps leading to the conversion of an existing SE back
into a national company.
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