New premises for a simplified European company

21/06/2021

After the publication, by the Henri Capitant Association, of a preliminary draft relating to the simplified European company (SES) within the framework of the creation of a European Business Code, the High Legal Committee of the Paris Financial Center (HCJP) recently published its report on the adoption of a SES legal regime adapted to the needs of SMEs.

While the European economic fabric is composed of more than 98% of SMEs, the European Union still suffers from not offering its entrepreneurs a simple, attractive and accessible corporate structure.

Indeed, despite several attempts to create a European corporate form adapted to SMEs (the European private company or “SPE” and then the single-member limited liability company or “SUP”), only the European Company (SE) has seen the light of day[1]. Mainly intended for large companies, the SE, whose mode of organization is complex and expensive, does not meet the expectations of SMEs and startups. The HCJP notes that in January 2021, there were 3,358 SEs registered, of which only about forty were in France.

At the same time, the success of the simplified joint stock company (SAS)[2] and similar forms in other European countries (e.g., the GmbH in Germany or the NV in the Netherlands), particularly among startups, shows that corporate forms offering great organizational flexibility are a powerful aid to the launch and development of entrepreneurial projects.

In this context, the HCJP recommends[3] the creation of an SES :

  • which would be a joint stock company,
  • whose criterion of attachment would be that of its statutory seat,
  • which could be constituted ab initio, with no minimum capital (other than the symbolic euro),
  • which could be held by one or several natural or legal persons,
  • whose constitution and operation should benefit from all the legal advances in the field of digitalization and remote communication and
  • whose system of employee participation in the management bodies would be that of the country of incorporation.

The report recommends that the classic cross-border criterion (i.e. the justification of the European character through, for example, partners from two different Member States) used for other European legal persons be discarded in favor of a cross-border criterion based on the European vocation of the SES (this European scope should be a component of the corporate purpose).

Moreover, in order to link the SES to a Member State, the report retains the criterion of the registered office (not the actual office) corroborated by the place of registration in a national register of companies.

The HCJP thus calls as a priority for the elaboration of a European regulation that is as precise and detailed as possible in order to respond to the demand for uniqueness of the economic actors while leaving a large freedom of statute so that the references to national law are as limited as possible.


[1] Apart from the European Economic Interest Grouping (EEIG) and the European Cooperative Society, which have not been adopted in practice

[2] 61% of company formations in 2017 and 2018 were SASs, and there were approximately 840,000 SASs as of July 2019.

[3] The recommendations of the HCJP differ from the proposals of the Association Capitant on some points, in particular in terms of minimum capital or seat.

Attribution d’actions gratuites : remise en cause partielle de la « réforme Macron »

Private Equity Mergers & Acquisition
Récemment, la loi du 6 août 2015 dite « loi Macron » avait réformé le régime des attributions gratuites d’actions afin de le rendre plus attractif (voir notre article). L’une…