Monday, November 14, 2005

Part VI – European Economic Interest Grouping (EEIG)- Forms of Business Ventures in Sweden

An EEIG is a vehicle which allows companies or individuals of different EU countries to combine and register in any EU country a grouping which has a legal personality and can operate across national frontiers. The primary legal foundation is to be found in the EU Council Regulation (EEC) No 2137/85 of 25 July 1985

Legal Capacity
Each member state determines for itself whether the EEIG has legal capacity; this is the case in Sweden.

Formation and Registration
An EEIG is set up in the same way as a normal company. At least two companies or individuals of different EU countries must request its formation. These are members, who in turn must appoint managers to operate the EEIG on a day-to-day basis. Registration of an EEIG in Sweden shall be made at the Swedish Companies Registration Office, Bolagsverket on its form 908.

The rules of membership of the EEIG are set out in Article 4 of the EU Regulation establishing EEIGs. The main requirement is that each potential member should have been engaged in an "economic activity" in the EU prior to becoming a member of the EEIG.

The members decide how the EEIG will carry on its activities in a contract of formation for the EEIG. Each member shall have at least one vote. The members are free to decide the voting procedures to be set down in the contract of formation except for certain fundamental decisions, for which unanimous decisions are required.

The members appoint and lay down the powers of the managers who run the EEIG and make normal daily decisions. The actions of the managers are binding on the EEIG and the members are jointly liable for those actions.

Capital Requirements and Liability
The members of the EEIG are not required to subscribe any capital. As there are no capital requirements for an EEIG, the members have unlimited joint and several liability. This means that there is no limit to the liability of any of the members for the activities of the EEIG, but also that each member can individually be held liable for those activities.

An EEIG's activities must relate to the economic activity of its members and must be ancillary to them, but the concept of "economic activity" can be interpreted widely. Unlike a company, an EEIG is not intended to make profits for itself.

An EEIG cannot hold shares in any of its members, be a member of another EEIG, employ more than 500 persons nor be used to make loans to a company director or any person connected with him where that would be restricted or controlled by national law.

The accounts and bookkeeping of a Swedish EEIG shall be kept separate from the accounts of its members.

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