Societas Europaea (SE) The first Pan-European company
On October 8, 2004, the European Union Council of Ministers adopted the European Company Statute Regulation allowing, for the first time, a truly European company, one based on EU law and transcending the laws of its Member states.
The European Company (Societas Europaea – "SE") is based on the Council Regulation (EC) No. 2157/2001 – the European Company Statute Regulation and the Council Directive No. 2001/86/EC supplementing the Statute with regard to the involvement of employees.
There is currently no well-developed body of European company law and the governing law is an amalgam of what EU law there is and of the Member state law where the company must be registered, i.e. where the administrative head office of the company will be located. The EU requirements relate to formation, transfer of registered office, employee representation and makeup of the Board of Directors. Local Member law will govern issues such as taxation. The SE must have a minimum share capital of Euro 120,000.
An SE may be formed:
-pursuant to a merger of one or more public companies from two different Member states
-as a Holding Company for public or private companies from at least two different Member states
-as a subsidiary of companies from at least two different Member states
-by changing a public limited company with a subsidiary in a different Member state for at least two years into an SE.
Potential advantages for the SE include the avoidance of multiple subsidiaries in different Member states subject to different and, at times, discordant regulation and should work to facilitate cross-Member mergers. Possible disadvantages include protracted negotiations over employee involvement.
Much remains to develop as Member states adapt their company law to this new entity but the SE is a positive development with a promising future for European unity.
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