Company Law加 Europe and European Company Law Eddy Wymeersch Abstract This paper addresses some of the issues underlying the harmonisation of company lany in Europe, especially in its relationship with companmy lany developments in the member states It highlights that until now company law has attempted to engage in substantive harmonisation, and less in solving cross-border issues involving company establishment By doing so, it has led to a pattern of cross border establishment that, being essentially based on the formation of subsidiaries under more or less comparable legal systems, less efficient than if the companies in europe had been allowed to freely and efficientl establish themselves under the form of branches. It also allows to situate the substantive harmonisation activity as a form of restricting the competitive forces in the company law field. By stressing substantive harmonisation, regulatory arbitrage has been stifled leading to less flexibility without reducing the need for rules on the cross-border aspects of the company activity. Some recent developments are analysed, dealing with the SLIM report, the 14th predraft on the cross-border transfer of the seat, and the proposed rules on the european company statute Comments to the author eddy. wymeersch @rug. ac be C Financial law institute. Universiteit Gent. 2001 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 Company Law in Europe and European Company Law Eddy Wymeersch Abstract This paper addresses some of the issues underlying the harmonisation of company law in Europe, especially in its relationship with company law developments in the Member states. It highlights that until now company law has attempted to engage in substantive harmonisation, and less in solving cross-border issues involving company establishment. By doing so, it has led to a pattern of cross border establishment that, being essentially based on the formation of subsidiaries under more or less comparable legal systems, is less efficient than if the companies in Europe had been allowed to freely and efficiently establish themselves under the form of branches. It also allows to situate the substantive harmonisation activity as a form of restricting the competitive forces in the company law field. By stressing substantive harmonisation, regulatory arbitrage has been stifled leading to less flexibility without reducing the need for rules on the cross-border aspects of the company activity. Some recent developments are analysed, dealing with the SLIM report, the 14th predraft on the cross-border transfer of the seat, and the proposed rules on the European company statute. Comments to the Author: eddy.wymeersch@rug.ac.be © Financial Law Institute, Universiteit Gent, 2001
Company Law in Europe and European Company law Eddy Wymeersch Professor at the University of Ghent( Belgium) Introduction I. The Treaty provisions 2. The ambit of the Company law directives 3. The instruments of European Company Law 4. The role of the European directives in the Communitys policies 5. Comparison with the capital market directives 6. The role of competition 7. Recent Trends and Proposals 7.1 The Simpler legislation for the Internal Market initiative (SLIM)(1999) 7.2 The draft proposal for a 14th Directive on the transfer of the seat 7.3 The Societas europeae The story of company law in the European Community has been quite a successful one Starting from the early sixties, the Community started an ambitious programme, in the course of which almost all aspects of company law would be included in the Communitys harmonisation efforts. The subject was sliced in numerous smaller items, each planned to give rise to a directi These company law directives have been known under their numbers: 10 have been adopted, in a series that runs up to fourteen. In addition, numerous directives have been issued in the field of capital market law. Although not directly dealing with company law, in the traditional sense, these directives have a significant impact on the behaviour of the largest companies, those that have their securities traded on the public markets. One should further also refer to specific measures dealin with the regulation of financial markets(banking, insurance, investment funds, investment firms), European enterprise council, colle sing issues of what can be referred to as enterprise law and to the measures that are addres ctive redundancies, transfer of undertakings, employer insolvency) I. The Treaty provisions 1. The Treaty contains three anchor provisions as far as company law is concerned; the first two have been left unchanged in the successive revisions of the treaty See for text collections: LUTTER(ed), Europaisches Unternehmensrecht, ZGR Sonderheft, 4th ed, 1995, also including tax measures; HOPT and WYMEERSCH(eds) European Company and Financial law, de Gruyter, Berlin, 2nd ed, 1994. For comments: EDWARDS, V, EC Company Law, Oxford EC Library, 1999, WERLAUFF, E EC Company Law, The common denominator for business undertakings in 12 states, 1993; also the ntroduction to the first edition of HoPT and WYMEERSCH, European Companmy and Financial la, de Gruyter 1999 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 1 Company Law in Europe and European Company Law Eddy Wymeersch Professor at the University of Ghent (Belgium) Introduction 1. The Treaty provisions 2. The ambit of the Company law directives 3. The instruments of European Company Law 4. The role of the European directives in the Community’s policies 5. Comparison with the capital market directives 6. The role of competition 7. Recent Trends and Proposals 7.1 The Simpler legislation for the Internal Market initiative (SLIM) (1999) 7.2 The draft proposal for a 14th Directive on the Transfer of the Seat 7.3 The"Societas Europeae" Introduction The story of company law in the European Community has been quite a successful one. Starting from the early sixties, the Community started an ambitious programme, in the course of which almost all aspects of company law would be included in the Community’s harmonisation efforts. The subject was sliced in numerous smaller items, each planned to give rise to a directive. These company law directives have been known under their numbers: 10 have been adopted, in a series that runs up to fourteen. In addition, numerous directives have been issued in the field of capital market law. Although not directly dealing with company law, in the traditional sense, these directives have a significant impact on the behaviour of the largest companies, those that have their securities traded on the public markets. One should further also refer to specific measures dealing with the regulation of financial markets (banking, insurance, investment funds, investment firms), and to the measures that are addressing issues of what can be referred to as enterprise law (European enterprise council, collective redundancies, transfer of undertakings, employer’s insolvency)1 . 1. The Treaty provisions 1. The Treaty contains three anchor provisions as far as company law is concerned; the first two have been left unchanged in the successive revisions of the treaty. 1 See for text collections: LUTTER (ed), Europäisches Unternehmensrecht, ZGR Sonderheft, 4th ed., 1995, also including tax measures; HOPT and WYMEERSCH (eds) European Company and Financial law, de Gruyter, Berlin, 2nd.ed., 1994. For comments: EDWARDS, V., EC Company Law, Oxford EC Library, 1999; WERLAUFF, E., EC Company Law, The common denominator for business undertakings in 12 states, 1993; also the Introduction to the first edition of HOPT and WYMEERSCH, European Company and Financial law, de Gruyter, 1999
services and capital", under its chapter 2. This article, renumbered 44(3)(g)prove Om of persons First and foremost, art. 54(3)(g), which is part of the Title Ill on the"freedo 44.2 The Council and the Commission shall carry out the duties devolving upon them under the preceding provisions-ie. the abolition of restrictions on the freed establishment of nationals of a member state in the territory of other members states, [nt (g) by co-ordinating to the necessary extent the safeguards which, for the protection of the interests of members and others, are required by Member States of companies or firms within the meaning of the second paragraph of Article 48 with a view of making Ich safeguards equivalent throughout the Community On the basis of this provision, the council could approve directives with a qualified majority In the same chapter, the Treaty identifies the entities that it considers beneficiaries of the freedom of establishment Paragraph 1 of art. 48(ex 58) provides Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States Article 220-now 293- puts forward a number of domains in which the member states were invited to negotiate separate treaties. These fields were, at that time, considered outside the scope of the harmonisation provision of the then article 54(3)(g). Among the subjects mentioned in art. 220 one should recall the mutual recognition of companies, along with the cross border transfer of the seat and the cross border merger of the companies belonging to different jurisdictions. As, according to the draftsmen of the Treaty, the implementation of this provision would have required an international treaty, unanimous consent of the member states and of their parliaments would have been necessary A third provision calls our attention: article 100 and later 100A-now 94 and 95-establish procedures, originally in article 100 with unanimity of the Member states, later at a qualified majority in article 100A, that aim at the approximation of such legislative and administrative provisions that"directly affect the establishment or functioning of the common market". Other procedures were introduced in art. 100A relating to provisions affecting the internal market 2. There has been ample discussion, especially in the early years of the Community, about the meaning of the powers thus conferred to the Council,. The exact meaning of art. 54(3)(g)was Paragraph 2 adds: Companies or firms'means companies or firms constituted under civil or commercial lav including cooperative societies, and other legal persons governed by public or private law, save for those which are non-I 3 See RENAULD, J. ' Aspects de la coordination et du rapprochement des dispositions relatives aux societes'in Europees vennootschapsrecht 1968, 49 e.s. with further references to the sources at that time. For a more recent e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 2 First and foremost, art. 54 (3) (g), which is part of the Title III on the "freedom of persons, services and capital", under its chapter 2. This article, renumbered 44 (3)(g) provides: 44.2 The Council and the Commission shall carry out the duties devolving upon them under the preceding provisions - i.e. the abolition of restrictions on the freedom of establishment of nationals of a member state in the territory of other members states, [nt ew ] - .... (g) by co-ordinating to the necessary extent the safeguards which, for the protection of the interests of members and others, are required by Member States of companies or firms within the meaning of the second paragraph of Article 48 with a view of making such safeguards equivalent throughout the Community” On the basis of this provision, the council could approve directives with a qualified majority. In the same chapter, the Treaty identifies the entities that it considers beneficiaries of the freedom of establishment: Paragraph 1 of art. 48 (ex 58) provides: "Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.”2 Article 220 - now 293 - puts forward a number of domains in which the member states were invited to negotiate separate treaties. These fields were, at that time, considered outside the scope of the harmonisation provision of the then article 54 (3)(g). Among the subjects mentioned in art. 220 one should recall the mutual recognition of companies, along with the cross border transfer of the seat and the cross border merger of the companies belonging to different jurisdictions. As, according to the draftsmen of the Treaty, the implementation of this provision would have required an international treaty, unanimous consent of the member states and of their parliaments would have been necessary. A third provision calls our attention: article 100 and later 100A - now 94 and 95 - establish procedures, originally in article 100 with unanimity of the Member states, later at a qualified majority in article 100A, that aim at the approximation of such legislative and administrative provisions that “directly affect the establishment or functioning of the common market”. Other procedures were introduced in art. 100A relating to provisions affecting the “internal market”. 2. There has been ample discussion, especially in the early years of the Community, about the meaning of the powers thus conferred to the Council3 . The exact meaning of art. 54(3)(g) was 2 Paragraph 2 adds: ‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making. 3 See RENAULD, J. ‘Aspects de la coordination et du rapprochement des dispositions relatives aux sociétés’ in Europees vennootschapsrecht 1968, 49 e.s. with further references to the sources at that time. For a more recent
discussed at great length, especially as overlapping powers seemed to have been conferred in article 100. The discussion was exacerbated by the fact that two different directorates general n charge of the implementation of each of the said articles. The discussion seems to have subsided mainly after the merger of the directorates According to one school, the Community had only limited powers to engage in co- ordinating company law, the remainder being left to action under article 100. Action under article 54 3)(g)would only be possible where existing regulations or practices would hamper companies to establish themselves in other states, provided also that the Community's intervention would lead to granting equivalent safeguards for the interests of members of these companies, and other parties affected The other tendency considered that all aspects of company law could come under the harmonisation powers the purpose was to ensure that companies could function in all states under equivalent conditions and that they would offer equivalent safeguards to shareholders, creditors, and Article 100 has never been invoked in company law directives, which were all based on art 54( 3(g). In the securities fields one can encounter various situations: art 100 A constitutes an often-invoked legal basis, along with art. 543 (g). But other articles have also been invoked:art 57(2)for the Ucits directive, art. 54(2)for the directive on mutual recognition of listing particulars, and so on Today, forty years later, very much of this debate has been superseded, also because under the broad harmonisation powers granted under article 100 A, all company law directives could be dopted with a qualified majority. Harmonisation would therefore be considered an instrument for the realisation of the general objectives of the treaty, more specifically the establishment of an internal market (art. 3, c and h). That means that all measures that can contribute to facilitating companies to establish themselves, but also to facilitate trade in the markets of other member states could be considered as coming under the harmonisation provisions. Even directives that would essentially affect domestic company life, might be warranted as useful in protecting creditors-eg in the case of the directive on the single member company -or facilitating later cross border ansactions-eg the third and sixth directives as a step-up for a later cross border merger directive 3. The issue of recognition of companies originating from other member states deserves some further development. On the basis of art. 220 of the treaty, the original six members states had reached an agreement in 1968 on the mutual recognition of companies and legal persons. This treaty which has been ratified by five out of the then six member states has never entered into force: the Netherlands refused to ratify largely because in the meantime it had changed its legislation from the seat theory to the incorporation technique. anyhow, the treaty built further on the already widely analysis: BUXBAUM, R.M. and HOPT, K., Legal harmonization and the Business Enterprise, de gruyter, l988.at204e.s. See for details, EDWARDS, V, EC Company law, at 5; referring to STEIN, E. Harmonization of Europ (1971) The terminology was rather confusing: AS LUTTER, nt. 1, p. 8 remarked, the use of the German word Angleichung", although equally opaque, sufficed to obtain the approval of the German legal writers to start working on the actual co-ordination or approximation Possibly referring to stakeholder e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 3 discussed at great length, especially as overlapping powers seemed to have been conferred in article 100. The discussion was exacerbated by the fact that two different directorates general were in charge of the implementation of each of the said articles. The discussion seems to have subsided mainly after the merger of the directorates4 According to one school, the Community had only limited powers to engage in coordinating5 company law, the remainder being left to action under article 100. Action under article 54 (3) (g) would only be possible where existing regulations or practices would hamper companies to establish themselves in other states, provided also that the Community’s intervention would lead to granting equivalent safeguards for the interests of members of these companies, and other parties affected. The other tendency considered that all aspects of company law could come under the harmonisation powers: the purpose was to ensure that companies could function in all states under equivalent conditions and that they would offer equivalent safeguards to shareholders, creditors, and other parties alike6 . Article 100 has never been invoked in company law directives, which were all based on art. 54 (3) (g). In the securities fields one can encounter various situations: art 100 A constitutes an often-invoked legal basis, along with art. 54(3)(g). But other articles have also been invoked: art. 57(2) for the Ucits directive, art. 54(2) for the directive on mutual recognition of listing particulars, and so on. Today, forty years later, very much of this debate has been superseded, also because under the broad harmonisation powers granted under article 100 A, all company law directives could be adopted with a qualified majority. Harmonisation would therefore be considered an instrument for the realisation of the general objectives of the treaty, more specifically the establishment of an internal market (art. 3, c and h). That means that all measures that can contribute to facilitating companies to establish themselves, but also to facilitate trade in the markets of other member states could be considered as coming under the harmonisation provisions. Even directives that would essentially affect domestic company life, might be warranted as useful in protecting creditors - e.g. in the case of the directive on the single member company - or facilitating later cross border transactions - e.g. the third and sixth directives as a step-up for a later cross border merger directive. 3. The issue of recognition of companies originating from other member states deserves some further development. On the basis of art. 220 of the treaty, the original six members states had reached an agreement in 1968 on the mutual recognition of companies and legal persons. This treaty which has been ratified by five out of the then six member states has never entered into force: the Netherlands refused to ratify largely because in the meantime it had changed its legislation from the seat theory to the incorporation technique. Anyhow, the treaty built further on the already widely analysis: BUXBAUM, R.M. and HOPT, K.J., Legal harmonization and the Business Enterprise, de Gruyter, 1988, at 204 e.s.. 4 See for details, EDWARDS, V., EC Company law, at 5; referring to STEIN, E. Harmonization of European company law, (1971). 5 The terminology was rather confusing: As LUTTER, nt. 1, p. 8 remarked, the use of the German word “Angleichung”, although equally opaque, sufficed to obtain the approval of the German legal writers to start working on the actual co-ordination or approximation 6 Possibly referring to stakeholders
acknowledged recognition of foreign companies in the original six member states. It extended recognition to non-commercial companies, and to public entities with economic activity This 1968 treaty has been considered as adhering to the seat theory. After the accession of the three further member states in 1971, the discussion was not taken up again. Today, it is generally considered abandoned The reason for mentioning this treaty here is double. Although it never entered into force has not remained without effect: in states which have ratified the treaty, national case law has drawn arguments from the treaty and from its national ratification act, to give effect to certain of its rules in national law. So has the Belgian Cour de cassation allowed a foreign one man company-in fact a Liechtenstein Anstalt- to appear before the Belgian court, although being a one man company, its existence was considered contrary to Belgian public order as the latter was then conceived. Indeed until a change of the law in 1978, Belgian law, like that of several other systems in the Latin tradition, analysed a company as a"contract"and therefore refused to recognize the validity of one-man company. The Court admitted this plaintiff on the basis that the belgian legislator by ratifying the Treaty, had admitted that foreign one-man companies should not be barred access on the sole reason that they had only one shareholder More striking however is the factual finding that over the last thirty years no difficulties have been encountered in any of the now fifteen member states with respect to the recognition of legal entities originating from other member states, provided that according to their applicable law, they were beneficiaries of rights and duties, and have legal personality. The question of recognition of foreign companies was therefore widely considered as obsolete. And with this goes the justification for the 1968 treaty In 1999, the matter came up again with the Centros case, which is not directly a case of recognition, but of freedom of establishment: as far as freedom of establishment is concerned member states would have to recognise each others companies, provided they meet the criteria of art 48(ex 58). The rule only extends to said freedom: it is open to debate whether it includes the right to move across the border without adapting to the entrys state regulations, or even without seeing the company dissolved by the exit state, at least in the hypothesis that both jurisdictions adhere to the siege reel doctrine This observation leads to a more general insight, that is that company law in Europe develops not only along the lines of EU guided harmonisation, but also under the factual pressures of developments in the Union and its internal market, including the competitive pressures to which companies and jurisdictions are increasingly exposed. The law in action, although an ancillary force in the overall economic developments that it sustains, is often stronger than the law in the books 7 See art. I and 2of the Treaty of 29 February 1968, the text of which is printed in LUTTER, fn. 1, at 69 The UK and Ireland adopt the incorporation doctrine The same applies to Finland and Sweden, while situation in Denmark is not very clear: see ANDERSEN, P. K. and SORENSEN, K.E., 'Free movement of companies from a Nordic perspective(1999)6 Maastricht ournal of European and Comparative lawv, at p 58 See Cour de Cassation, " Del Sol"case, 13 January 1978, R w, 1977-1978, 1942, nt. VAN BRUYSTEGEM; A.C., 1978, 568; R CJB, 1979, 41, note L. F. GANSHOF See lutter, nt. 1, at 43 and at 696 I1 ECJ. 9 March 1999. C-212/97 ECR 1999.1 -1459 for comments see fn. 105 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 4 acknowledged recognition of foreign companies in the original six member states. It extended recognition to non-commercial companies, and to public entities with economic activity7 . This 1968 treaty has been considered as adhering to the seat theory. After the accession of the three further member states in 1971, the discussion was not taken up again8 . Today, it is generally considered abandoned. The reason for mentioning this treaty here is double. Although it never entered into force, it has not remained without effect: in states which have ratified the treaty, national case law has drawn arguments from the treaty and from its national ratification act, to give effect to certain of its rules in national law. So has the Belgian Cour de cassation allowed a foreign one man company - in fact a Liechtenstein Anstalt - to appear before the Belgian court, although being a one man company, its existence was considered contrary to Belgian public order as the latter was then conceived. Indeed, until a change of the law in 1978, Belgian law, like that of several other systems in the Latin tradition, analysed a company as a “contract” and therefore refused to recognize the validity of a one-man company. The Court admitted this plaintiff on the basis that the Belgian legislator by ratifying the Treaty, had admitted that foreign one-man companies should not be barred access on the sole reason that they had only one shareholder 9 . More striking however is the factual finding that over the last thirty years no difficulties have been encountered in any of the now fifteen member states with respect to the recognition of legal entities originating from other member states, provided that according to their applicable law, they were beneficiaries of rights and duties, and have legal personality. The question of recognition of foreign companies was therefore widely considered as obsolete10. And with this goes the justification for the 1968 treaty. In 1999, the matter came up again with the Centros case11, which is not directly a case of recognition, but of freedom of establishment: as far as freedom of establishment is concerned, member states would have to recognise each others companies, provided they meet the criteria of art. 48 (ex 58). The rule only extends to said freedom: it is open to debate whether it includes the right to move across the border without adapting to the entry’s state regulations, or even without seeing the company dissolved by the exit state, at least in the hypothesis that both jurisdictions adhere to the siège réel doctrine. This observation leads to a more general insight, that is that company law in Europe develops not only along the lines of EU guided harmonisation, but also under the factual pressures of developments in the Union and its internal market, including the competitive pressures to which companies and jurisdictions are increasingly exposed. The law in action, although an ancillary force in the overall economic developments that it sustains, is often stronger than the law in the books. 7 See art. 1 and 2of the Treaty of 29 February 1968, the text of which is printed in LUTTER, fn.1, at 69. 8 The UK and Ireland adopt the incorporation doctrine The same applies to Finland and Sweden, while the situation in Denmark is not very clear: see ANDERSEN, P. K. and SÖRENSEN, K.E., ‘Free movement of companies from a Nordic perspective’ (1999) 6 Maastricht Journal of European and Comparative law, at p. 58. 9 See Cour de Cassation, "Del Sol" case, 13 January 1978, R.W., 1977-1978, 1942, nt. VAN BRUYSTEGEM; A.C., 1978, 568; R.C.J.B., 1979, 41, note L. F. GANSHOF. 10 See LUTTER, nt. 1, at 43 and at 696. 11 ECJ, 9 March 1999, C-212/97, ECR 1999, I-1459, for comments see fn. 105
4. In the late 1960s, even though the discussions about the interpretation of art. 54(3(g) were not resulting in a common view, the first proposals for harmonisation directives were prepared. The Commission had decided that large scale comparative research could usefully contribute to a better insight in the issues involved and to the solutions to be adopted Several research studies were assigned to the most famous company law professors of Europe: Wurdinger, on the structure of the company, later the fifth directive, Van Ommeslaghe, on groups of companies,B. Goldman on the mutual recognition of foreign companies, or later Pennington, on takeovers. One should not forget to mention the group that took the project for European Company Statute under its wings, i.e. P. Sanders, E. Arendt, E. von Caemmerer, L. Dabin G. Marty, and G. Minervini I5 From these early works a long series of directive proposals emerged. They have been the subject of ample analysis and study. However, these are not the only instruments that should be taken into account. In addition, the Community has adopted one regulation, on the EEIG, the European Economic Interest Group, that contains a substantially different approach to company law matters. Another major regulation is being prepared about the Societas Europaea, " the European company", the first proposal having been published in 1970 7 2. The Ambit of the Company Law Directives 5. The directives are generally applicable to public companies limited, or to the equivalent forms in the member states(Societe anonyme, societa per azioni, naamloze vennootschap, Aktiengesellschaft, etc). These are by far the largest business enterprises and the impact of their activity on the internal market is the widest. However, de facto, the use of the different company forms is quite divergent among the member states: at the moment the first directives were published Germany had only about 1000 Aktiengesellschaften. At present their number has increased abstantially but is still considerably lower than what appears to be their number of equivalent forms in the other member states 12 See the paper by HOUIN, R 'Le regime juridique des societes dans la Communaute Economique Europeenne Revue trimestrielle de droit europeen, 1965, 1I and RODIERE,R. 'L'harmonisation de legislations europeennes dans le cadre de la C.e. E., Revue trimestrielle de droit europeen, 1965, 336 See B. GoLDMAN, 'La reconnaissance mutuelle des societes dans la CEE, Etudes offertes a Julliot de la Morandiere. 1964.191 I According to Commission des Communautes europeennes, Projet d'un statut des societes anonymes europeennes, Serie Concurrence, 1967, n6, preface See the books by LUTTER, EDWARDS and WERLAUFF in nt. 1 See Voorstel voor een Statuut voor Europese Naamloze Vennootschappen, submitted to the Council on 30 une 1970, Bulletin, 8, supplement, 1970; and Amended proposal for a Regulation"Statute for European Companies", Bulletin of the European Communities, Suppl. 4/75.See further nr. 42 for the most recent stage of development 18 For comparative figures, see WYMEERSCH, in"A Status Report on Corporate Governance Rules and Practices in Some Continental European States' in Comparative Corporate Governance. The state of the art ard emerging research, HOPT, K.J., KANDA, H, ROE, M.J., WYMEERSCH, E, PRIGGE, S(eds ) Clarendon Press Oxford, at 1049. Recent figures about Germany: HANSEN, H, AG Report, Zum Jahresende 2000: 10582 Aktiengesellschaften'in AG, 2001, 3, p. R67 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 5 4. In the late 1960s, even though the discussions about the interpretation of art. 54 (3)(g) were not resulting in a common view12, the first proposals for harmonisation directives were prepared. The Commission had decided that large scale comparative research could usefully contribute to a better insight in the issues involved and to the solutions to be adopted. Several research studies were assigned to the most famous company law professors of Europe: Würdinger, on the structure of the company, later the fifth directive; Van Ommeslaghe, on groups of companies13, B. Goldman on the mutual recognition of foreign companies 14, or later Pennington, on takeovers. One should not forget to mention the group that took the project for a European Company Statute under its wings, i.e. P. Sanders, E. Arendt, E. von Caemmerer, L. Dabin, G. Marty, and G. Minervini. 15 From these early works a long series of directive proposals emerged. They have been the subject of ample analysis and study16. However, these are not the only instruments that should be taken into account. In addition, the Community has adopted one regulation, on the EEIG, the European Economic Interest Group, that contains a substantially different approach to company law matters. Another major regulation is being prepared about the Societas Europaea, "the European company", the first proposal having been published in 197017. 2. The Ambit of the Company Law Directives 5. The directives are generally applicable to public companies limited, or to the equivalent forms in the member states (Société anonyme, società per azioni, naamloze vennootschap, Aktiengesellschaft, etc). These are by far the largest business enterprises and the impact of their activity on the internal market is the widest. However, de facto, the use of the different company forms is quite divergent among the member states: at the moment the first directives were published, Germany had only about 1000 Aktiengesellschaften. At present their number has increased substantially but is still considerably lower than what appears to be their number of equivalent forms in the other member states18. 12 See the paper by HOUIN, R. ‘Le regime juridique des sociétés dans la Communauté Economique Européenne’, Revue trimestrielle de droit européen, 1965, 11 and RODIÈRE, R. ‘L’harmonisation de legislations européennes dans le cadre de la C.E.E.’, Revue trimestrielle de droit européen, 1965, 336. 13 P. VAN OMMESLAGHE, ‘Les groupes de sociétés’, Revue pratique des sociétés, 1965, n° 5280, 153-252. 14 See B. GOLDMAN, ‘La reconnaissance mutuelle des sociétés dans la CEE’, Etudes offertes à Julliot de la Morandière, 1964, 191. 15 According to Commission des Communautés européennes, Projet d'un statut des sociétés anonymes européennes, Série Concurrence, 1967, n° 6, préface. 16 See the books by LUTTER, EDWARDS and WERLAUFF in nt. 1. 17 See Voorstel voor een Statuut voor Europese Naamloze Vennootschappen, submitted to the Council on 30 June 1970, Bulletin, 8, supplement, 1970; and Amended proposal for a Regulation “Statute for European Companies”, Bulletin of the European Communities, Suppl. 4/75.See further nr. 42 for the most recent stage of development. 18 For comparative figures, see WYMEERSCH, in ‘A Status Report on Corporate Governance Rules and Practices in Some Continental European States’ in Comparative Corporate Governance. The state of the art and emerging research, HOPT, K.J., KANDA, H., ROE, M.J., WYMEERSCH, E., PRIGGE, S. (eds.), Clarendon Press, Oxford, at 1049. Recent figures about Germany: HANSEN, H., AG Report, ‘Zum Jahresende 2000: 10582 Aktiengesellschaften’ in AG, 2001, 3, p. R67
In several member states the private company limited can be considered as largely equivalent to the public company, except that its shares are not freely transferable. Other states consider this pe of company as being more akin to the partnerships, although members enjoy limited liability Ithough the internal organisation might be different, the external structure and behaviour of these companies is in fact largely identical to that of the public companies limited. Therefore, there were good arguments to treat both types of companies on the same footing The factual situation in the different directives is quite diverse: while the first, the fourth, the seventh and the eleventh directives are applicable both to the public and the private company types, the second, third, sixth apply only to the public company limited The 12th on the single -membe pany applies only e private limited company, as this is the only form in which a one-man company is usually allowed In fact one should put a question mark beside the above used distinction between public and private companies, as being equivalent to the continental divide between SA en Sarl. In the approach followed in the UK, the former are subspecies of the same single company form, the company ares Inder the continental concept, the Sa and the Sarl, although having many common features, are generally considered different company types. Moreover the differences between the Sa and the Sarl, or what generally are considered equivalent national forms, vary appreciably from state to state The issue is far from merely technical Member states have had ambivalent feelings as to the extension of some of the harmonised European rules to company types that are not explicitly viewed by the directives. Some member states have taken an activist stand, extending the european principles to all company types, at least those with limited liability. So e.g. is part of the capital formation and protection rules that are applicable to the French Sa also applicable to the French Sarl. Belgium has taken a more radical stand it applies the rules equally to both Sa and Sprl, and some of them even to the co-operative societies, although these are considered out of the scope of the harmonisation in other states. Therefore, the effects of the European harmonisation often extend beyond the horizon of the sa One can also understand why some member states that are critical of some of the European rules, will resist any attempt to extend the harmonisation across the board to all companies with limited liability When the Sarl has not been submitted to all of the rules of the European harmonisation, this company type has played the role of a shelter, or some will say, of an evasion technique. The exemption of the Sarl from the cumbersome rules of the Second Directive on financial assistance (art. 23)has opened up the possibility to organise useful transactions, such as management buy outs by interposing a Sarl, there where the deal would be forbidden if done directly by an SA. This form of competition between company types deserves special mention. In some states it has been even more evident between the co-operative societies and the Sarl, as both were, for practical purposes This is especially the case with the extension of the Second directive to the private companies limited,a proposal that has been voiced in Germany as a technique to deal with the issues dealt with in the Centros case See LUTTER, M. "Das Europaische Unternehmensrecht im 21. Jahrhundert,, ZGR 2000, 1 and HIRTE, Die aktienrechtliche Satzungsstrenge: Kapitalmarkt und sonstige Legitimationen versus Gestaltungsfreiheit, ZGR Sonderheft 13, 1998, 71-72 20 See WYMEERSCH, Kritische benadering en synthese van de besproken vennootschappen'in Miskende vennootschapsvormen, Koninklijke Federatie van Belgische Notarissen, Kluwer, Antwerpen, 1991, 153-180 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 6 In several member states the private company limited can be considered as largely equivalent to the public company, except that its shares are not freely transferable. Other states consider this type of company as being more akin to the partnerships, although members enjoy limited liability. Although the internal organisation might be different, the external structure and behaviour of these companies is in fact largely identical to that of the public companies limited. Therefore, there were good arguments to treat both types of companies on the same footing. The factual situation in the different directives is quite diverse: while the first, the fourth, the seventh and the eleventh directives are applicable both to the public and the private company types, the second, third, sixth apply only to the public company limited. The 12th on the single-member company applies only to the private limited liability company, as this is the only form in which a one-man company is usually allowed. In fact one should put a question mark beside the above used distinction between public and private companies, as being equivalent to the continental divide between SA en Sàrl. In the approach followed in the UK, the former are subspecies of the same single company form, the company limited by shares. Under the continental concept, the Sa and the Sàrl, although having many common features, are generally considered different company types. Moreover the differences between the SA and the Sàrl, or what generally are considered equivalent national forms, vary appreciably from state to state. The issue is far from merely technical. Member states have had ambivalent feelings as to the extension of some of the harmonised European rules to company types that are not explicitly viewed by the directives. Some member states have taken an activist stand, extending the European principles to all company types, at least those with limited liability. So e.g. is part of the capital formation and protection rules that are applicable to the French SA also applicable to the French Sàrl. Belgium has taken a more radical stand: it applies the rules equally to both SA and Sprl, and some of them even to the co-operative societies, although these are considered out of the scope of the harmonisation in other states. Therefore, the effects of the European harmonisation often extend beyond the horizon of the SA. One can also understand why some member states that are critical of some of the European rules, will resist any attempt to extend the harmonisation across the board to all companies with limited liability19. When the Sàrl has not been submitted to all of the rules of the European harmonisation, this company type has played the role of a shelter, or some will say, of an evasion technique. The exemption of the Sàrl from the cumbersome rules of the Second Directive on financial assistance (art. 23) has opened up the possibility to organise useful transactions, such as management buy outs by interposing a Sàrl, there where the deal would be forbidden if done directly by an SA. This form of competition between company types deserves special mention. In some states it has been even more evident between the co-operative societies and the Sàrl, as both were, for practical purposes, largely equivalent20. 19 This is especially the case with the extension of the Second directive to the private companies limited, a proposal that has been voiced in Germany as a technique to deal with the issues dealt with in the Centros case. See LUTTER, M. ‘Das Europäische Unternehmensrecht im 21. Jahrhundert’, ZGR 2000,1 and HIRTE, ‘Die aktienrechtliche Satzungsstrenge: Kapitalmarkt und sonstige Legitimationen versus Gestaltungsfreiheit’, ZGR Sonderheft 13, 1998, 71-72. 20 See WYMEERSCH, ‘Kritische benadering en synthese van de besproken vennootschappen’ in Miskende vennootschapsvormen, Koninklijke Federatie van Belgische Notarissen, Kluwer, Antwerpen, 1991, 153-180
The question has been raised whether it would not be preferable to develop European rules that would only address part of the viewed population, the one where with the greatest cross border density". To a certain extent, this approach has already been followed as the accounting directives contain differentiated rules depending on the volume of the business, its turnover and the number of employees employed. However, if these criteria allow differentiating the smaller companies from the very small ones, it does not allow for sufficient differentiation at the top end of the scale. Therefore it would be advisable that the directives more closely follow the criterion of "listing": companies that have their securities listed on regulated markets would be subject to strengthened rules and obligations v a.v. their investors". The use of this criterion would allow deregulating for many of the intermediate class of companies, and result in a more level playing field between the national systems, where the use of the different corporate forms present divergent patterns. At the same time it would allow for a better junction with the rules flowing from the capital market directives 3. The instruments of European Company Law 6. European company law is indirect company law: the Community rules are generally not directly applicable in the national legal systems. This feature is a consequence of the prevalent use of the"directive"as an instrument for implementing the provisions of the article 44(1)and 94-95 The directive is the usual Community instrument in the company law field. As mentioned above, some-unsuccessful-attempts have been made to intervene by way of a treaty. In rare cases the Community has acted by regulation, the latter being directly applicable in the national legal orders. In the securities field, a recommendation has been adopted it had the value of a programme for future harmonisation activity But the most used instrument is the directive. As a consequence, European company law is not company law, not being directly applicable to the companies, but addressed to the member States, who have to implement the directive into their national legal order. This duty of implementation is sometimes complex: there is no need to enact a regulation if the directive's provision is addressed to the state itself. Also the directive needs no implementing legislation if the national laws are already in conformity with the directive's provisions This double-layered system of regulation has many advantages: in a multicultural multilingual economic area it makes it possible to reach agreement on common principles without aving to agree about the rding in the actually applicable provision. It allows bridging the considerable differences in the legislative traditions of the member states. It further allows each state to use its own wording and language, as the directive only binds as to its result, not as to its forms and methods(art. 249) The drawback of the use of directives is that- differently from a"regulation"-it does not result in uniform law. Looking at the national company law statutes, one will find numerous and sometimes considerable differences in the respective member states. It is up to the eCj to check whether the member states have adequately implemented the directive and whether the goal put 21 In France and in Belgium, this criterion is supplemented by that of the companies that have issued securities to the public. As the number of companies that have issued securities to the public that have not been listed afterwards are marginal, it is proposed to leave that extension up to the member states 22 LEMPEREUR, CL,, Le code de conduite europeen concermant les transactions relative aux valeurs mobilieres' Rev. Dr Int. Dr:. Compare, 1978, 249-266 23 See on the use of the different instruments in European Company law: HOPT, K, fn. 4, at 232 et sec See also hoPt. fn. 4. at 233 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 7 The question has been raised whether it would not be preferable to develop European rules that would only address part of the viewed population, the one where with the greatest cross border "density". To a certain extent, this approach has already been followed as the accounting directives contain differentiated rules depending on the volume of the business, its turnover and the number of employees employed. However, if these criteria allow differentiating the smaller companies from the very small ones, it does not allow for sufficient differentiation at the top end of the scale. Therefore, it would be advisable that the directives more closely follow the criterion of “listing”: companies that have their securities listed on regulated markets would be subject to strengthened rules and obligations v.à.v. their investors21. The use of this criterion would allow deregulating for many of the intermediate class of companies, and result in a more level playing field between the national systems, where the use of the different corporate forms present divergent patterns. At the same time it would allow for a better junction with the rules flowing from the capital market directives. 3. The instruments of European Company Law 6. European company law is indirect company law: the Community rules are generally not directly applicable in the national legal systems. This feature is a consequence of the prevalent use of the "directive" as an instrument for implementing the provisions of the article 44(1) and 94-95. The directive is the usual Community instrument in the company law field. As mentioned above, some - unsuccessful- attempts have been made to intervene by way of a treaty. In rare cases the Community has acted by regulation, the latter being directly applicable in the national legal orders. In the securities field, a recommendation has been adopted: it had the value of a programme for future harmonisation activity22. But the most used instrument is the directive23. As a consequence, European company law is not company law, not being directly applicable to the companies, but addressed to the Member States, who have to implement the directive into their national legal order. This duty of implementation is sometimes complex: there is no need to enact a regulation if the directive's provision is addressed to the state itself. Also the directive needs no implementing legislation if the national laws are already in conformity with the directive's provisions. This double-layered system of regulation has many advantages: in a multicultural, multilingual economic area it makes it possible to reach agreement on common principles without having to agree about the precise wording in the actually applicable provision24. It allows bridging the considerable differences in the legislative traditions of the member states. It further allows each state to use its own wording and language, as the directive only binds as to its result, not as to its forms and methods (art. 249). The drawback of the use of directives is that - differently from a "regulation" - it does not result in uniform law. Looking at the national company law statutes, one will find numerous and sometimes considerable differences in the respective member states. It is up to the ECJ to check whether the member states have adequately implemented the directive and whether the goal put 21 In France and in Belgium, this criterion is supplemented by that of the companies that have issued securities to the public. As the number of companies that have issued securities to the public that have not been listed afterwards are marginal, it is proposed to leave that extension up to the member states. 22 LEMPEREUR, CL., ‘Le code de conduite européen concernant les transactions relative aux valeurs mobilières’, Rev.Dr.Int. Dr. Comparé, 1978, 249-266. 23 See on the use of the different instruments in European Company law: HOPT, K., fn. 4, at 232 et seq. 24 See also HOPT, fn. 4, at 233
forward has been achieved. However the number of ECJ cases dealing with company law has been relative small25 There are several other reasons why directives do not result in uniform legal provisions. One of these is the frequently used technique of the"options", whereby member states may choose between several alternatives, each being considered equivalent in terms of ultimate harmonisation. It is well known that these"options"often are a way out of the deadlock during the discussions. They have been frequently used in the Fourth accounting directive, and have contributed to the perceived weakness of the European accounting syster Another disturbing factor is the prevailing opinion -often explicitly mentioned in the directives- that these only introduce minimum standards, and that member states are free to go beyond the directive's provisions, by imposing stricter, more protective rules26. This attitude leads necessarily to reinforce the peculiarities of each of the legal systems, and constitutes a serior handicap in the accomplishment of the internal market. The segmentation of the market may also be due to the abundant use- or extensive nterpretation-by member states of the"general good exception"27. According to this rule, member states may allow restrictions in their national legal order to be maintained, or that may even prevail over the directive's provisions, if they serve to achieve the public policy objective that the member states have lawfully put forward. In the field of investor protection member states have been rather inventive to list numerous rules as belonging to the general good The eCJ has accepted that these exceptions can be upheld even with respect to the freedom of establishment of companies". The outcome is an often unjustified segmentation of the markets 7. Being addressed to Member States, not to companies directly, directives do not provide directly enforceable rights to the companies, to investors or other stakeholders, which the directive has in mind. Enforcement of the directives is, as a matter of the Treaty, the task of the Commission (art 226)or of other member states(art. 227). Ultimately, the ECJ decides. National jurisdictions deciding in last instance, are obliged to submit all cases of interpretation of the directives to the ECJ, although increasingly -and regrettably- some national jurisdictions refuse to do on the basis of the acte clair" technique Although in principle individuals have no right to invoke the directive, it being addressed to the Member states, the directive is not without effect as far as their legal position is concerned. First, the directive is directly applicable in the relations between a state or public authority, and party: this is called vertical direct effect, and may be of importance in the securities field, where issuers deal with state supervisory bodies. But the eCJ has up to now denied horizontal direct effect to the directives: investors could therefore not claim against a company that it violates the rules of the directive. Furthermore on the basis of the idea that the implementation is a duty of the member 25 For an overview, see V. EDWARDS, EC Company Law, Oxford University Press, 1999, at XXVII 26 This being linked to the adoption of the lowest common denominator, see HoPT, fn. 4, at 235 See for an extensive study of the general good exception in the area of financial services: TISON, M, De Interne Markt voor Bank- en Beleggingsdiensten, Antwerp, Intersentia, 1999 and What is"general good"in EU Financial Services Law?, LIEI, 1997/1, pp. 1-57 28 Also in the Centros decision, ECJ, 9 March 1999, C-212/97, ECR 1999, 1-1459 at& 24: Case 115/78Knoors ( 1979)ECR 399,$ 25 and Case C-61/89 Bouchoucha(1990)ECR 1-3551,8 14 See greek cases in VANESSA EDWARDS, EC Companmy Law, Oxford University Press, 1999, Ch Ill, art 25-29 Sec dir The landmark decision of the European Court of Justice concerning horizontal direct effect is the marsha decision( Case 152/84 Marshall v. Southampton and South-West Hampshire Area Health Authority (1986) e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 8 forward has been achieved. However the number of ECJ cases dealing with company law has been relative small25. There are several other reasons why directives do not result in uniform legal provisions. One of these is the frequently used technique of the "options", whereby member states may choose between several alternatives, each being considered equivalent in terms of ultimate harmonisation. It is well known that these "options" often are a way out of the deadlock during the discussions. They have been frequently used in the Fourth accounting directive, and have contributed to the perceived weakness of the European accounting system. Another disturbing factor is the prevailing opinion - often explicitly mentioned in the directives - that these only introduce minimum standards, and that member states are free to go beyond the directive's provisions, by imposing stricter, more protective rules26. This attitude leads necessarily to reinforce the peculiarities of each of the legal systems, and constitutes a serious handicap in the accomplishment of the internal market. The segmentation of the market may also be due to the abundant use - or extensive interpretation - by member states of the "general good exception"27. According to this rule, member states may allow restrictions in their national legal order to be maintained, or that may even prevail over the directive's provisions, if they serve to achieve the public policy objective that the member states have lawfully put forward. In the field of investor protection member states have been rather inventive to list numerous rules as belonging to the general good. The ECJ has accepted that these exceptions can be upheld even with respect to the freedom of establishment of companies28. The outcome is an often unjustified segmentation of the markets. 7. Being addressed to Member States, not to companies directly, directives do not provide directly enforceable rights to the companies, to investors or other stakeholders, which the directive has in mind. Enforcement of the directives is, as a matter of the Treaty, the task of the Commission (art 226) or of other member states (art. 227). Ultimately, the ECJ decides. National jurisdictions, deciding in last instance, are obliged to submit all cases of interpretation of the directives to the ECJ, although increasingly -and regrettably - some national jurisdictions refuse to do on the basis of the "acte clair" technique. Although in principle individuals have no right to invoke the directive, it being addressed to the Member states, the directive is not without effect as far as their legal position is concerned. First, the directive is directly applicable in the relations between a state or public authority, and a private party: this is called vertical direct effect29, and may be of importance in the securities field, where issuers deal with state supervisory bodies. But the ECJ has up to now denied horizontal direct effect to the directives: investors could therefore not claim against a company that it violates the rules of the directive30. Furthermore, on the basis of the idea that the implementation is a duty of the member 25 For an overview, see V. EDWARDS, EC Company Law, Oxford University Press, 1999, at XXVII. 26 This being linked to the adoption of the lowest common denominator, see HOPT, fn. 4, at 235. 27 See for an extensive study of the general good exception in the area of financial services: TISON, M., De Interne Markt voor Bank- en Beleggingsdiensten, Antwerp, Intersentia, 1999 and ‘What is “general good” in EU Financial Services Law?’, L.I.E.I., 1997/1, pp. 1-57. 28 Also in the Centros decision, ECJ, 9 March 1999, C-212/97, ECR 1999, I-1459 at § 24: Case 115/78 Knoors (1979) ECR 399, § 25 and Case C-61/89 Bouchoucha (1990) ECR I-3551, § 14. 29 See Greek cases in VANESSA EDWARDS, EC Company Law, Oxford University Press, 1999, Ch III, art 25-29 Sec Dir.. 30 The landmark decision of the European Court of Justice concerning horizontal direct effect is the Marshall decision (Case 152/84 Marshall v. Southampton and South-West Hampshire Area Health Authority (1986)
state, the Court has held states civilly liable for not implementing a directive in time. finally even between private parties, national statutes have to be interpreted in a sense that is in conformity with 8. It has often been claimed that the harmonisation of company law in Europe has suffered from too many rigidities. These are due to the long process of preparation of the directives-often 10 to 15 years-which makes it unworkable to change the directive's wording once it has been adopted."Petrification"is, according to Vanessa Edwards, less bad than one could fear: she points to the amendments that have been introduced in the second, fourth and the listing particulars directive. She further points to art. 202(ex 145) whereby the Council can confer implementing powers to the Commission. More recently, the comitology"technique has been further refined allowing the appointment of specialised committees to whom regulatory powers can be delegated In the securities field, the recent Lamfalussy Report proposed to draw on the comitolo technique to ensure that the principles that have been adopted by the Council, are adequately and swiftly translated in workable provisions for further implementation by the member states. There are good arguments to follow a similar approach in some of the more technical company law matters 9. There have been several generations of directives and proposals for directives in the field of company law and capital market law. The following list aims at giving an overview of the Community s efforts in this field therefore both adopted directives and proposals for directives or other instruments are included Company Law 1 First Council Directive of 9 March 1968 on co-ordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within th meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community(68/151/EEC) 2 Second Council Directive of 13 December 1976 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies ECR 723), see also Case C-91/ 92 Faccini dori v Recreb ECR 1-3325 and Case C-192/94 El Corte Ingles v blacque rivero(1996) ECR l-1281 But this po is being increasingly weakened: see ECJ, C 443-98, of 26 September 2000, Unilever Italia SpA v Central Food SpA, EuZW, 2001, 153, with comments by GUNDEL 31 Joined Cases C 46 and 48/93 Brasserie du Pecheur and Factortame(1996)ECR 1-1029 and Case C-392/93 The 32 Queen v HM Treasury, ex p British Telecommunications(1996)ECR1-1631 The Marleasing case C-106/89 Marleasing v La Comercial Internacional de Alimentacion(1990)ECR I-4135 33 See HoPt. in 4. 235es 243. 265 EDWARDS. fn. 1. at 11 35 See Council Decision, 28 June 1999, OJEC, L. 184 of 17 July 1999, 23-26; compare the proposal made in the Lamfalussy report"Initial Report of the Committee of Wise Men on the Regulation of the European SecuritiesMarkets,http://europa.eu.int/comm/internalmarket/en/finances/general/lamfalussy.htm The technical rules on electronic voting in the general meeting, or on proxy solicitation could be mentioned as an example, see WYMEERSCH, "The use of ICT in Company law, in FERRARINI, (ed) Europe in the age of the Euro, to be published 37OJL65.14.3.1968.8-12 e Financial Law institute. Universiteit Gent 2001
© Financial Law Institute, Universiteit Gent, 2001 9 state, the Court has held states civilly liable for not implementing a directive in time31. Finally even between private parties, national statutes have to be interpreted in a sense that is in conformity with the purpose of the directive.32 8. It has often been claimed that the harmonisation of company law in Europe has suffered from too many rigidities. These are due to the long process of preparation of the directives - often 10 to 15 years - which makes it unworkable to change the directive's wording once it has been adopted33. "Petrification" is, according to Vanessa Edwards34, less bad than one could fear: she points to the amendments that have been introduced in the second, fourth and the listing particulars directive. She further points to art. 202 (ex 145) whereby the Council can confer implementing powers to the Commission. More recently, the “comitology” technique has been further refined, allowing the appointment of specialised committees to whom regulatory powers can be delegated35. In the securities field, the recent Lamfalussy Report proposed to draw on the comitology technique to ensure that the principles that have been adopted by the Council, are adequately and swiftly translated in workable provisions for further implementation by the member states. There are good arguments to follow a similar approach in some of the more technical company law matters36. 9. There have been several generations of directives and proposals for directives in the field of company law and capital market law. The following list aims at giving an overview of the Community's efforts in this field: therefore both adopted directives and proposals for directives or other instruments are included. Company Law 1° First Council Directive of 9 March 1968 on co-ordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community (68/151/EEC)37 2° Second Council Directive of 13 December 1976 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies ECR 723), see also Case C-91/92 Faccini dori v Recreb (1994) ECR I-3325 and Case C-192/94 El Corte Inglés v Blàzquez Rivero (1996) ECR I-1281. But this position is being increasingly weakened: see ECJ, C 443-98, of 26 September 2000, Unilever Italia SpA v.Central Food SpA, EuZW, 2001, 153, with comments by GUNDEL. 31 Joined Cases C 46 and 48/93 Brasserie du Pêcheur and Factortame (1996) ECR I-1029 and Case C-392/93 The Queen v HM Treasury, ex p British Telecommunications (1996) ECR I-1631. 32 The Marleasing case C-106/89 Marleasing v La Comercial Internacional de Alimentaciòn (1990) ECR I-4135. 33 See HOPT, fn.4, 235 e.s. 243, 265 34 EDWARDS, fn. 1, at 11 35 See Council Decision, 28 June 1999, OJEC, L. 184 of 17 July 1999, 23- 26; compare the proposal made in the Lamfalussy report “Initial Report of the Committee of Wise Men on the Regulation of the European Securities Markets’, http://europa.eu.int/comm/internal_market/en/finances/general/lamfalussy.htm . 36 The technical rules on electronic voting in the general meeting, or on proxy solicitation could be mentioned as an example, see WYMEERSCH, ‘The use of ICT in Company law’, in FERRARINI, (ed) Europe in the age of the Euro, to be published. 37 OJ L 65, 14.3.1968, 8-12
