- The data are taken from research by the European Trade Union Institute, available at http://ecdb.worker-participation.eu/show_overview.php?letter=A&orderField=se_name&status_id=3&title=Established%20SEs (last accessed on 3 October 2011).
- See http://ecdb.worker-participation.eu/lexicon.php (last accessed on 3 October 2011).
- See http://en.wikipedia.org/wiki/Economy_of_the_European_Union (last accessed on 3 October 2011).
- H Eidenmüller, A Engert and L Hornuf, “Incorporating Under European Law: The Societas Europaea as a Vehicle for Legal Arbitrage” (2009) 10 European Business Organization Law Review 1.
- Ernst & Young, “Study on the Operation and the Impacts of the Statute for a European Company (SE)” (2009), available at http://ec.europa.eu/internal_market/consultations/docs/2010/se/study_SE_9122009_en.pdf (last accessed on 3 October 2011).
- Ibid, 208; EC Commission, Report from the Commission to the European Parliament and the Council: The Application of Council Regulation 2157/201 of 8 October 2001 on the Statute for a European Company (SE), COM(2010) 676 final, 3.
- Under Czech law, corporations must have a two-tier structure and at least three members on the board of directors and three members on the supervisory board. However, Czech law sets forth an exception for corporations with sole shareholders: in terms of the number of board members, such corporations may have only one member on the board of directors. See Act No 513/1991 Coll, Commercial Code, as amended (the Czech Commercial Code), s 194(3). Nevertheless, the requirement of three members on the supervisory board remains.
- See Ernst & Young, supra n 5, 82, 87, 129–31, 210–11, 228, 236–38.
- Ibid, 209.
- Ibid, 22.
- Out of 220 SEs existing on 1 June 2010, 41 of them were, to the best of our knowledge, shelf companies. For the purposes of this text, we understand a shelf company to be an SE which has neither operational activities nor employees. Cf EC Commission, Commission Staff Working Document: Accompanying Document to the Report from the Commission to the European Parliament and the Council on the Application of Council Regulation 2157/2001 of 8 October 2001 on the Statute for a European Company (SE), SEC(2010) 1391 final, 2 (defining shelf SEs as “SEs with no activities or employees that are usually set up by professional company providers with the purpose of selling them afterwards to interested buyers”). A clear indication that a Czech SE is a (inactive) shelf SE is that the sole shareholder of such a company is the “parent” company of a professional provider who offers SEs for sale.
- To the best of our knowledge, 40 out of the 41 shelf companies were sold in the course of our research.
- See Ernst & Young, supra n 5, 130, 210–11.
- Council Regulation 2157/2001/EC of 8 October 2001 on the Statute for a European company (SE) [2001] OJ L294/1.
- SER, Art 38(b).
- See Czech Commercial Code, ss 194 et seq.
- See Act No 90/2012 Coll, Companies Act (the New Czech Companies Act), ss 396 et seq.
- See Czech Commercial Code, s 194(3).
- Ibid, s 200(1).
- SER, Arts 39(4), 40(3), 43(2).
- See also Z Csehi, “Die Attraktivität der supranationalen Gesellschaftsformen in den mittelund osteuropäischen Staaten” in P Jung (ed), Supranationale Gesellschaftsformen im Typenwettbewerb (Tübingen, Mohr Siebeck, 2011), 17, 21 (speculating that corporate mobility is the main driver for Czech SE incorporations).
- SER, Art 8.
- See Case C 210/06 Cartesio Oktató és Szolgáltató bt [2008] ECR I-09641.
- See Act No 355/2011 Coll, amending Act No 127/2008 Coll, the Transformation Act, as amended, ss 384f et seq.
- Although Czech law has provided national companies (corporations and limited liability companies) with the theoretical possibility to transfer their respective seat abroad since 1991 under section 26(1) of the Czech Commercial Code, this provision has been a declaratory “statement on the books” only because, to the best of our knowledge, no such seat transfers have ever occurred based on this provision. One reason could be that the other relevant provisions of Czech law (eg Regulation No 250/2005 Coll, as amended, on forms for petitions to the Commercial Register) have not considered the possibility of a seat transfer based on this provision, which lacks any specific steps to be taken in order to carry out such a transfer. The same is true for another provision concerning corporate mobility, which, in connection with the accession of the Czech Republic to the European Union, states in s 26(4) of the Czech Commercial Code that transferring a legal entity's registered office from the Czech Republic abroad is also permissible in cases and on conditions stipulated by law of the European Communities or under a special legal regulation. The special law concerning the transfer of seats mentioned in the text only entered into force on 1 January 2012 by virtue of an amendment to the Transformation Act and, to the best of our knowledge, no seat transfers have ever occurred “in cases and on conditions stipulated by the laws of the European Communities” before.
- Based on the information from the Commercial Register, there have been three transfers of the registered office of Czech SEs to another Member State as of 1 November 2011. Contradictory Ernst & Young, supra n 5, 130, 213 (no seat transfers so far (130), five seat transfers (213)) and EC Commission, supra n 11, 17 (4 seat transfers). The European Commission lists DIAG Human SE and Imperio Regere SE among Czech SEs which transferred their seat abroad when, in fact, these companies engaged in creating an SE by virtue of a cross-border merger.
- Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of limited liability companies [2005] OJ L310/1.
- See H Eidenmüller, L Hornuf and M Reps, “Contracting Employee Involvement: An Analysis of Bargaining over Employee Involvement Rules for a Societas Europaea” (2012) 12 Journal of Corporate Law Studies 201. This is typically the case with respect to SEs being formed as shelf companies, understood as companies that have neither business activities nor employees and are for sale. However, it is well established that negotiations must be conducted where the proposed SE does not have any employees but the founding companies have. If even the founding companies lack employees, negotiations would be pointless. In such rare cases, the issue of employee involvement and, thus, the establishment of the Special Negotiating Body come again to the fore at the time the shelf company is “activated”, ie starts carrying out business activities and hiring employees (cf recital 18 of the Preamble and Art 11 of Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with regard to the involvement of employees [2001] OJ L294/22 (hereinafter SE-Dir)).
- Under s 200(1) of the Czech Commercial Code, the supervisory board of a Czech corporation must have at least three members; and the number of members must be divisible by three. Two-thirds of the supervisory board members are elected by the general meeting and one-third by the company's employees, provided the company has more than 50 employees in an employment relationship for working hours which exceed half of the weekly working hours stipulated by specific rules as of the first day of the accounting period in which the general meeting is held to elect the members of the supervisory board.
- See Act No 627/2004 on a European Company, as amended, s 26(1).
- In the early 1990s, the protection of minority shareholders and namely creditors of Czech corporations and limited liability companies was, to a great extent, only at the beginning of its evolution. For instance, there were basically no rules for conflicted transactions up until 1996. The absence of effective tools led to significant looting of Czech companies, which harmed minority shareholders and creditors. Even though this experience concerned both corporations and limited liability companies, the limited liability companies came out of the 1990s with a reputation of being not as trustworthy and credible a company form as that of a corporation (probably because of the lower capital required to set up a limited liability company compared to a corporation). Cf J Hurdík, Právnické osoby a jejich typologie (CH Beck, 2003), 73.
- SER, Art 4.
- See Act No 254/2004 Sb on Limitations of Payments in Cash, as amended, s 4(1).
- Ibid, ss 5–6.
- See Czech Commercial Code, s 161f.
- In Germany the fees amount to approximately €12,000 on average, in Austria to approximately €5,000, in France to approximately €3,000, and in the UK they are below €1,000.
- See supra n 28.
- See, eg OLG Düsseldorf, resolution of 30 March 2009, I-3 Wx 248/08 [2009] Praxis der Freiwilligen Gerichtsbarkeit 124 (absent negotiations on employee involvement, the SE could only be registered because an undertaking had been given that it did not have any employees and would not have employees in the future).
- See supra n 28.
- See EC Commission, supra n 6, 8 (noting that some respondents and trade union representatives mentioned the lack of clear rules on employee involvement when a shelf SE is activated or structural changes occur after the SE's creation, which in the trade unions' view poses a risk that the employee involvement rules can be circumvented); EC Commission, supra n 11, 11.
- See supra n 12.
- See European Trade Union Institute, supra n 1.
- Slovak Act No 513/1991 Coll, Commercial Code, as amended (hereinafter Slovak Commercial Code).
- See Slovak Commercial Code, s 200(1).
- Slovak Act No 562/2004 Coll, on the statute of the European Company, as amended, s 25(1).
- It is noteworthy that some of the professional sellers who operate in the Czech Republic started to offer ready-made companies also in Slovakia—for instance, CHAMR & PARTNERS sro or SMART Office & Companies sro.
- COM(2008) 396/3.
Journal of Corporate Law Studies
Volume 12, 2012 - Issue 2