SPE - the new Europe Limited Liability Company

In June 2008, the European Commission presented the draft for the so-called "Societas Privata Europaea" (abbreviated to "SPE"). This is a capital company for whose liabilities - as with the German GmbH - only the company's assets are liable. The realization of this project could considerably upgrade european company law in favor of medium-sized companies in the EU.

The following is a brief overview of the already celebrated european company for SMEs:

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Formation

There shall be four possibilities for the formation of an SPE:

• the new formation according to the SPE Regulation
• the conversion of an existing national company, e.g. the GmbH into the SPE
• the merger of existing national companies
• the division of an existing national company

If an SPE is not formed by a new incorporation, the conversion, merger or division shall be governed by national law.

In Germany the SPE shall be registered in the commercial register upon application, for which the name of the company, the address of the registered office, information on the persons authorized to represent the company, the share capital, information on the shares and the articles of association of the SPE may be required by the member states as information in the application.
In order to verify compliance with the formation formalities, either a judicial or administrative authority may be mandated by the member states or the notarization of the documents may be required.

Unlike the other supranational legal forms, e.g. the SE, there does not have to be a cross-border reference for the formation. This represents a particular advantage for medium-sized companies.

Organization of the SPE

The internal organization of the SPE is determined by the shareholders themselves. Article 26 I provides that the management body may exercise all the powers of the SPE unless the regulation or the articles of association provide that the powers are to be exercised by the shareholders. The purpose of this provision is probably the company's ability to act.
However, in addition, Art. 27 regulates what must be decided by the shareholders by resolution in the general meeting of shareholders.

Membership in the SPE

Shareholders of an SPE can be companies in the sense of Art. 48 II ECT as well as the supranational legal forms, but also natural persons. Pursuant to Art. 15 para. 1, a list of shareholders - similar to the list of shareholders of a german limited liability company (GmbH) - is drawn up. The list proves the correctness of the data contained in it, unless its incorrectness can be proven.
If shares are transferred, this must be done in writing. The waiver of notarial certification represents a simplification for german medium-sized companies compared to the legal situation under the law governing limited liability companies in Germany. The new shareholder is then included in the list of shareholders if he can prove that he is the legal owner of the share.

Share capital

In order to facilitate new formations, the Commission's draft on the SPE sets the minimum capital at 1 EUR.
In the case of cash incorporation, all shares must be subscribed for but not paid for in full when issued.

The draft presented by the Commission is to be welcomed. Individual points still need to be regulated with foresight, e.g. shareholder and management liability or the consequences of unlawful shareholder resolutions. However, individual provisions, such as original formation without cross-border factual situations, minimum capital requirements and employee participation, are already being criticized.

Criticism of the SPE by the German Federal Council

In its resolution of October 10, 2008, the German Federal Council expressed concerns about the SPE project.

While the Federation of German Industries, the Confederation of German Employers' Associations, the Association of German Chambers of Industry and Commerce and the German Engineering Federation have supported the European project for years, the German Federal Council is calling for serious changes to the SPE.

Details of the German Federal Council's position on the European Private Company.