Wednesday, November 16, 2005

Part VII– European Company (Societas Europaea) - Forms of Business Ventures in Sweden

A European Company (Societas Europaea or SE) is a fairly new form of company based on an EU Regulation supplemented with regard to the involvement of employees by a Council Directive. In Sweden the European Company is regulated by an act on European companies, which entered into force on October 8, 2004.

The European Company is a European public limited company and it may be created by registration in any one of the Member States of the European Economic Area (EEA). The Member States are obliged to treat an SE as if it is a public limited company formed in accordance with the law of the Member State in which it has its registered office.

Legal Capacity
The European Company has full legal capacity comparable to a Swedish public limited company.

A European Company can be formed i.a. in the following ways:
  1. by merger of two or more public limited companies in at least two Member States,

  2. by two or more private or public companies establishing a holding company where at least two of the companies held fall under the legislation of different Member States,

  3. by establishing a subsidiary the shares of which are held by at least two companies falling under the legislation of different Member States,

  4. by transforming an already existing public limited company provided it has had a subsidiary in another Member State for at least two years,

  5. by a European company establishing its own subsidiaries.

Registration of a European Company in Sweden shall be made at the Swedish Companies Registration Office, Bolagsverket

Company Name
The name of a European Company must be preceded or followed by the abbreviation SE. In addition the normal rules for names of Swedish limited companies apply.

Capital Requirements
The minimum share capital of a European company is € 120,000.

There are two different systems to choose between as regards the managing and controlling a European Company. The statutes may, therefore, require either a one-tier or two-tier system of administration.

The Directive and the Swedish acts also make provisions for employees to be involved in the management of a European Company.

Accounts and Audit
The accounts and bookkeeping of a Swedish European Company shall be kept in accordance with the corresponding rules of limited companies and the same applies in respect of auditors.

Transfer of registration from one Member State to another
One of the explicit aims of the Regulation is that a European Company should be able to transfer its registered office to another Member State without being wound up. Consequently, a European Company registered in Sweden may transfer its registered office to another Member State and vice versa.

Supplementing Rules
To the extent the rules of the Regulation, the Directive or the Swedish acts directly applicable to European Companies does not contain anything to the contrary the general rules applicable to Swedish public limited companies will apply in principle to European Companies.

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