Statement of the President of the Employers' Group following the EESC vote on Single Member Private Limited Liability Companies

On 10 September 2014 the European Economic and Social Committee voted on an opinion INT/744 on Single Member Private Limited Liability Companies (Societas Unius Personae - SUP). The Employers Group filed a counter opinion prepared by Mr Bernd Dittman. The debate on the document was refused due to the formal reasons raised by the Workers' Group and Various Interests' Group of the EESC.

The official position of the Employers' Group on Single Member Private Limited Liability Companies (INT/744) is as follows:

1. The overall objective of the European Commission in its proposal for a single member private limited liability company is "to make it easier for any potential company founder, and in particular for SMEs to set-up companies abroad". The proposal shall facilitate cross-border activities of companies and diminish set-up and operational costs by introducing a harmonised registration procedure, a possibility of online registration with a uniform template of articles of association and a low legal capital requirement for the set-up. The creditors shall be protected by the obligation imposed on the SUP directors to control distributions as per Article 18 of the Commission proposal. To enable businesses to reap the full benefits of the single market, Member States shall not require that an SUP's registered office and its central administration are necessarily located in the same Member State.
2. Even if the draft of the European Commission is not so ambitious and still leaves room for improvement on specific aspects (for example safeguards needed to ensure creditors and other stakeholders remain protected, some additional formalities relating to registration, some degree of flexibility for uniform of articles of association), the proposal has in general to be welcomed as a measure to promote the participation of SMEs at the European single market.
3. One of the main features of the SUP proposal is the online registration. The directive requires Member States to offer a registration procedure that can be fully completed electronically at a distance without requiring the need of a physical presence of the founder before the authorities of Member State registration. The registration must be completed within three working days. It will be of great benefit and essential for European companies to have rules implemented that foresee a quick and cost-efficient registration procedure. The proposal for an online registration has therefore to be welcomed. Prerequisite is that identification and authentication of the founder, the director(s), the person who registers the company, the company and submitted documents are checked to avoid misuse and to ensure the public faith of the registries. It is therefore necessary to add in Article 14 of the Commission proposal, at an appropriate place, the referral to Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC, which sets out rules, which electronic identification means have to be recognised between Member States and how the electronic identification schemes should be notified. The referral to this legal act will help to verify the identity of the company founder and to avoid misuses. The Member State must therefore be able to check within the three-day limit that the name and business object of the company is compatible with national law. Moreover business registers will in the future be more interconnected thanks to recently adopted EU legislation, so there is no reason to deprive the act of creating companies from the use of new technologies and from benefiting from measures aimed at reducing administrative burdens; 16 Member States already allow for direct on-line registration procedure.
4. The SUP aims only to harmonise national company law. It should be clearly mentioned, that the European Commission's proposal does not refer at any time to employee participation. Different stakeholders argue that there is a certain potential for abuse of the rights on employee participation, as the Commission proposal allows that an SUP’s registered office and its central administration does not necessarily have to be located in the same Member State. This is, however, not a problem, that should be at the expense of the SUP proposal, as the separation of the registered office and its central administration also exists in national law. In this case, the national law of the registered office on employee participation applies. A systematic escape from the rules on employee participation for instance in Germany is however not known.
5. As regards the separation of the SUPs registered office and the central administration we would like to reiterate that it is common practice in the Member States and broadly recognised by ECJ jurisprudence (e.g. on "Centros", "Überseering" and "Inspire Art") to distinguish between the registered office and the central administration. Therefore it is a logical step to foresee such a practice in the SUP proposal. The SUP is not designed as a supranational legal form but is a national legal form. The European Commission harmonises national law in the area of single member companies to establish a minimum of common rules applicable in every single Member State to the same extent, without changing existing national company law. Therefore it would be questionable to compare the rules of the SUP with the ones of the SE or the SCE.
6. The scope of the SUP proposal should not be limited to small companies according to the criteria set out in Article 3 (2) of the Accounting Directive (2013/34/EU). The legal form of a company does in general not depend on its size (number of employees, total balance sheet or net turnover).