1977L0091—EN—01.01.1995—001.001—1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B 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 within the meaning of the second paragraph ofArticle 58 of the Treaty, in respect of the formation of public limited liability companies and the
maintenance and alteration of their capital, with a view to making such safeguards equivalent
(77/91/EEC)
(OJL26,31.1.1977,p.1)
Amendedby:
OfficialJournal
No page date
►M1CouncilDirective92/101/EECof23November1992 L347 64 28.11.1992
Amendedby:
►A1ActofAccessionofGreece L291 17 19.11.1979
►A2ActofAccessionofSpainandPortugal L302 23 15.11.1985
►A3ActofAccessionofAustria,SwedenandFinland C241 21 29.8.1994
(adaptedbyCouncilDecision95/1/EC,Euratom,ECSC) L1 1 1.1.1995
▼B
SECOND COUNCIL DIRECTIVE
of 13 December 1976
on coordination of safeguards which, for the protection of the inter-
ests of members and others, are required by Member States ofcompanies within the meaning of the second paragraph of Article58 of the Treaty, in respect of the formation of public limited liabi-
lity companies and the maintenance and alteration of their capital,
with a view to making such safeguards equivalent
(77/91/EEC)
THECOUNCILOFTHEEUROPEANCOMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community,andinparticularArticle54(3)(g)thereof,
HavingregardtotheproposalfromtheCommission,
HavingregardtotheopinionoftheEuropeanParliament(1),
Having regard to the opinion of the Economic and Social
Committee(2),
WhereasthecoordinationprovidedforinArticle54(3)(g)andinthe
General Programme for the abolition of restrictions on freedom of
establishment, which was begun by Directive 68/151/EEC(3), is espe-
cially important in relation to public limited liability companies,because their activities predominate in the economy of the MemberStatesandfrequentlyextendbeyondtheirnationalboundaries;
Whereas in order to ensure minimum equivalent protection for both
shareholders and creditors of public limited liability companies, thecoordination of national provisions relating to their formation and tothe maintenance, increase or reduction of their capital is particularly
important;
Whereas in the territory of the Community, the statutes or instrument
of incorporation of a public limited liability company must make it
possible for any interested person to acquaint himself with the basicparticulars of the company, including the exact composition of itscapital;
WhereasCommunityprovisionsshouldbeadoptedformaintainingthe
capital,whichconstitutesthecreditors'security,inparticularbyprohi-biting any reduction thereof by distribution to shareholders where the
latter are not entitled to it and by imposing limits on the company's
righttoacquireitsownshares;
Whereas it is necessary, having regard to the objectives of Article 54
(3)(g),thattheMemberStates'lawsrelating totheincreaseorreduc-tion of capital ensure that the principles of equal treatment ofshareholdersinthesamepositionandofprotectionofcreditorswhoseclaimsexistpriortothedecisiononreductionareobservedandharmo-nized,
HASADOPTEDTHISDIRECTIVE:
Article 1
1. The coordination measures prescribed by this Directive shall
apply tothe provisionslaid downbylaw,regulation oradministrativeactioninMemberStatesrelatingtothefollowingtypesofcompany:
—in Belgium:
lasociétéanonyme—denaamlozevennootschap;1977L0091—EN—01.01.1995—001.001—2
(1) OJNoC114,11.11.1971,p.18.
(2) OJNoC88,6.9.1971,p.1.
(3) OJNoL65,14.3.1968,p.8.
▼B
—in Denmark:
aktieselskabet;
—in France:
lasociétéanonyme;
—in Germany:
dieAktiengesellschaft;
—in Ireland:
thepubliccompanylimitedbyshares,the public company limited by guarantee and having a share
capital;
—in Italy:
lasocietàperazioni;
—in Luxembourg:
lasociétéanonyme;
—in the Netherlands:
denaamlozevennootschap;
—in the United Kingdom:
thepubliccompanylimitedbyshares,the public company limited by guarantee and having a share
capital;
—in Grece
η ανώνυµη εταιρία;
—in Spain:
lasociedadanónima;
—in Portugal:
asociedadeanonimaderesponsabilidadelimitada;
—in Austria
dieAktiengesellschaft;
—in Finland:
osakeyhtiö—aktiebolag;
—in Sverige:
aktiebolag.
The name for any company of the above types shall comprise or be
accompanied by a description which is distinct from the descriptionrequiredofothertypesofcompanies.
2. The Member States may decide not to apply this Directive to
investment companies with variable capital and to cooperatives incor-porated as one of the types of company listed in paragraph 1. In so
farasthelawsoftheMemberStatesmakeuseofthisoption,theyshall
requiresuchcompaniestoincludethewords‘investmentcompanywithvariable capital’ or ‘cooperative’ inall documents indicated inArticle4ofDirective68/151/EEC.
Theexpression‘investment companywithvariable capital’, withinthe
meaningofthisDirective,meansonlythosecompanies:
— the exclusive object of which is to invest their funds in various
stocks and shares, land or other assets with the sole aimof
spreadinginvestmentrisksandgivingtheirshareholdersthebenefit
oftheresultsofthemanagementoftheirassets,
— whichoffertheirownsharesforsubscriptionbythepublic,and
— the statutes of which provide that, within the limits of a minimum
andmaximumcapital,theymayatanytimeissue,redeemorreselltheirshares.1977L0091—EN—01.01.1995—001.001—3
▼A1
▼A2
▼A3
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▼B
Article 2
The statutes or the instrument of incorporation of the company shall
alwaysgiveatleastthefollowinginformation:
(a) thetypeandnameofthecompany;
(b) theobjectsofthecompany;
(c) — whenthecompanyhasnoauthorizedcapital,theamountofthe
subscribedcapital,
— when the company has an authorized capital, the amount
thereof and also the amount of the capital subscribed at thetimethecompanyisincorporatedorisauthorizedtocommencebusiness, and at the time of any change in the authorized
capital, without prejudice to Article 2 (1) (e) of Directive 68/
151/EEC;
(d) insofarastheyarenotlegallydetermined,therulesgoverningthe
numberofandtheprocedureforappointingmembersofthebodiesresponsible for representing the company with regard to thirdparties, administration, management, supervision or control of thecompanyandtheallocationofpowersamongthosebodies;
(e) thedurationofthecompany,exceptwherethisisindefinite.
Article 3
Thefollowinginformationatleastmustappearineitherthestatutesor
the instrument of incorporation or a separate document published inaccordance withtheprocedure laiddowninthelawsofeach MemberStateinaccordancewithArticle3ofDirective68/151/EEC:
(a) theregisteredoffice;
(b) the nominal value of the shares subscribed and, at least once a
year,thenumberthereof;
(c) thenumberofsharessubscribedwithoutstatingthenominalvalue,
wheresuchsharesmaybeissuedundernationallaw;
(d) thespecialconditionsifanylimitingthetransferofshares;
(e) wherethereareseveralclassesofshares,theinformationunder(b),
(c) and (d)foreach class and the rights attaching tothe shares ofeachclass;
(f) whether the shares are registered or bearer, where national law
providesforbothtypes,andanyprovisionsrelating totheconver-sionofsuchsharesunlesstheprocedureislaiddownbylaw;
(g) the amount of the subscribed capital paid up at the time the
companyisincorporatedorisauthorizedtocommencebusiness;
(h) the nominal value of the shares or, where there is not nominal
value, the number of shares issued for a consideration other thanin cash, together with the nature of the consideration and the
nameofthepersonprovidingthisconsideration;
(i) theidentityofthenaturalorlegalpersonsorcompaniesorfirmsby
whom or in whose name the statutes or the instrument of incor-
poration,orwherethecompanywasnotformedatthesametime,
thedraftsofthesedocuments,havebeensigned;
(j) thetotalamount,oratleastanestimate,ofallthecostspayableby
the company or chargeable to it by reason of its formation and,whereappropriate, beforethecompanyisauthorizedtocommencebusiness;
(k) any special advantage granted, at the time the company is formed
oruptothetimeitreceivesauthorizationtocommencebusiness,toanyone who has taken part in the formation of the company or intransactionsleadingtothegrantofsuchauthorization.
Article 4
1. WherethelawsofaMemberStateprescribethatacompanymay
not commence business without authorization, they shall also makeprovision for responsibility for liabilities incurred by or on behalf of1977L0091—EN—01.01.1995—001.001—4
▼B
the company duringtheperiod beforesuchauthorization isgranted or
refused.
2. Paragraph 1 shall not apply to liabilities under contracts
concludedbythecompanyconditionallyuponitsbeinggrantedauthor-
izationtocommencebusiness.
Article 5
1. Where the laws of a Member State require a company to be
formedbymorethanonemember,thefactthatallthesharesareheldby one person or that the number of members has fallen below the
legal minimum after incorporation of the company shall not lead to
theautomaticdissolutionofthecompany.
2. If in the cases referred to in paragraph 1, the lawsof a Member
State permit the company to be wound up by order of the court, thejudge having jurisdiction must be able to give the company sufficienttimetoregularizeitsposition.
3. Wheresuchawindinguporderismadethecompanyshallenter
intoliquidation.
Article 6
1. ThelawsoftheMemberStatesshallrequirethat,inorderthata
company may be incorporated or obtain authorization to commencebusiness, a minimum capital shall be subscribed the amount of whichshallbenotlessthan25000 ►
A3ecus◄.
The►A3ecus◄of account shall be that defined by Commission
Decision No 3289/75/ECSC(1). The equivalent in national currency
shall be calculated initially atthe rate applicable onthe date of adop-
tionofthisDirective.
2. If the equivalent of the ►A3ecus◄in national currency is
altered so that the value of the minimum capital in national currencyremains less than 22500 ►
A3ecus◄for a period of one year, the
Commission shall inform the Member State concerned that it mustamend its legislation to comply with paragraph 1 within 12 monthsfollowing the expiry of that period. However, the Member State may
provide that the amended legislation shall not apply to companies
alreadyinexistenceuntil18monthsafteritsentryintoforce.
3. Every five years the Council, acting on a proposal fromthe
Commission, shall examine and, if need be, revise the amountsexpressed in this Article in ►
A3ecus◄in the light of economic
and monetary trends in the Community and of the tendency towardsallowingonlylargeandmediumsizedundertakingstooptforthetypes
ofcompanylistedinArticle1(
1).
Article 7
The subscribed capital may be formed only of assets capable of
economic assessment. However, an undertaking to perform work orsupplyservicesmaynotformpartoftheseassets.
Article 8
1. Shares may not be issued at a price lower than their nominal
value,or,wherethereisnonominalvalue,theiraccountablepar.
2. However,MemberStatesmayallowthosewhoundertaketoplace
sharesintheexerciseoftheirprofessiontopaylessthanthetotalpriceofthesharesforwhichtheysubscribeinthecourseofthistransaction.1977L0091—EN—01.01.1995—001.001—5
(1) OJNoL327,19.12.1975,p.4.
▼B
Article 9
1. Sharesissuedforaconsiderationmustbepaidupatthetimethe
companyisincorporatedorisauthorizedtocommencebusinessatnot
lessthan25%oftheirnominal value or,intheabsenceofanominalvalue,theiraccountablepar.
2. However, where shares are issued for a consideration other than
in cash at the time the company is incorporated or is authorized to
commencebusiness,theconsiderationmustbetransferredinfullwithin
fiveyearsofthattime.
Article 10
1. A report on any consideration other than in cash shall be drawn
up before the company is incorporated or is authorized to commencebusiness, by one or more independent experts appointed or approved
byanadministrativeorjudicialauthority.Suchexpertsmaybenatural
personsaswellaslegalpersonsandcompaniesorfirmsunderthelawsofeachMemberState.
2. Theexperts'report shall contain atleasta description ofeach of
the assets comprising the consideration as well as of the methods of
valuation used and shall state whether the values arrived at by the
application of these methods correspond at least to the number andnominal valueor,wherethereisnonominal value,totheaccountableparand,whereappropriate, tothepremium onthesharestobeissuedforthem.
3. The expert's (SIC! experts') report shall be published in the
manner laid down by the laws of each Member State, in accordancewithArticle3ofDirective68/151/EEC.
4. MemberStatesmaydecide nottoapplythisArticle where90%
of the nominal value, or where there is no nominal value, of the
accountable par, of all the shares is issued to one or more companies
foraconsiderationotherthanincash,andwherethefollowingrequire-mentsaremet:
(a) with regard to the company in receipt of such consideration, the
persons referred to in Article 3 (i) have agreed to dispense withtheexpert's(SIC!experts')report;
(b) suchagreementhasbeenpublishedasprovidedforinparagraph3;
(c) the companies furnishing such consideration have reserves which
maynotbedistributedunderthelaworthestatutesandwhichareat least equal to the nominal value or, where there is no nominalvalue, the accountable par of the shares issued for considerationotherthanincash;
(d) the companies furnishing such consideration guarantee, up to an
amount equal to that indicated in paragraph (c), the debts of therecipient company arising between the time the shares are issued
foraconsiderationotherthanincashandoneyearafterthepubli-
cation of that company's annual accounts for the financial yearduring which such consideration was furnished. Any transfer ofthesesharesisprohibitedwithinthisperiod;
(e) theguaranteereferredtoin(d)hasbeenpublishedasprovidedfor
inparagraph3;
(f) the companies furnishing such consideration shall place a sum
equal to that indicated in (c) into a reserve which may not bedistributeduntilthreeyearsafterpublicationoftheannualaccountsof the recipient company forthe financial year during which suchconsiderationwasfurnishedor,ifnecessary,untilsuchlaterdateas
all claims relating to the guarantee referred to in (d) which are
submittedduringthisperiodhavebeensettled.
Article 11
1. If,beforetheexpiryofatimelimitlaiddownbynationallawof
at least two years from the time the company is incorporated or isauthorized to commence business, the company acquires any asset1977L0091—EN—01.01.1995—001.001—6
▼B
belongingtoapersonorcompanyorfirmreferredtoinArticle3(i)for
aconsiderationofnotlessthanonetenthofthesubscribedcapital,theacquisitionshallbeexaminedanddetailsofitpublishedinthemanner
providedforinArticle10anditshallbesubmittedfortheapprovalof
thegeneralmeeting.
Member States may also require these provisions to be applied when
theassetsbelongtoashareholderortoanyotherperson.
2. Paragraph1shallnotapplytoacquisitionseffectedinthenormal
course of the company's business, to acquisitions effected at the
instance or under the supervision of an administrative or judicialauthority,ortostockexchangeacquisitions.
Article 12
Subjecttotheprovisionsrelatingtothereductionofsubscribedcapital,
the shareholders may not be released from the obligation to pay uptheircontributions.
Article 13
Pending coordination of national laws at a subsequent date, Member
States shall adopt the measures necessary to require provision of atleast the same safeguards as are laid down in Articles 2 to 12 in theevent of the conversion of another type of company into a publiclimitedliabilitycompany.
Article 14
Articles2to13shallnotprejudicetheprovisionsofMemberStateson
competence and procedure relating to the modification of the statutes
oroftheinstrumentofincorporation.
Article 15
1. (a) Exceptforcasesofreductionsofsubscribedcapital,nodistribu-
tion to shareholders may be made when on the closing date ofthelastfinancialyearthenetassetsassetoutinthecompany'sannual accounts are, or following such a distribution would
become, lower than the amount of the subscribed capital plus
those reserves which may not be distributed under the law orthestatutes.
(b) Wheretheuncalledpartofthesubscribedcapitalisnotincluded
in the assets shown in the balance sheet, this amount shall be
deducted fromthe am ount of subscribed capital referred to inparagraph(a).
(c) Theamountofadistributiontoshareholdersmaynotexceedthe
amount of the profits at the end of the last financial year plusany profits brought forward and sums drawn from reservesavailable for this purpose, less any losses brought forward andsums placed to reserve in accordance with the law or thestatutes.
(d) The expression ‘distribution’ used in subparagraphs (a) and (c)
includes in particular the payment of dividends and of interestrelatingtoshares.
2. When the laws ofa Member State allow the payment of interim
dividends,thefollowingconditionsatleastshallapply:
(a) interimaccounts shall be drawn up showing that the funds avail-
ablefordistributionaresufficient,
(b) theamounttobedistributedmaynotexceedthetotalprofitsmade
since the end of the last financial year for which the annualaccounts have been drawn up, plus any profits brought forwardand sums drawn from reserves available for this purpose, lesslosses brought forward and sums to be placed to reserve pursuanttotherequirementsofthelaworthestatutes.1977L0091—EN—01.01.1995—001.001—7
▼B
3. Paragraphs1and2shallnotaffecttheprovisionsoftheMember
States as regards increases in subscribed capital by capitalization ofreserves.
4. The laws of a Member State may provide for derogations from
paragraph1(a)inthecaseofinvestmentcompanieswithfixedcapital.
The expression ‘investment company with fixed capital’, within the
meaningofthisparagraph(SIC!paragraph,)meansonlythosecompa-nies:
— the exclusive object of which is to invest their funds in various
stocks and shares, land or other assets with the sole aimof
spreadinginvestmentrisksandgivingtheirshareholdersthebenefitoftheresultsofthemanagementoftheirassets,and
— whichoffertheirownsharesforsubscriptionbythepublic.
In so far as the laws of Member States make use of this option they
shall:
(a) require such companies to include the expression ‘investment
company’ in all documents indicated in Article 4 of Directive 68/151/EEC;
(b) not permit any such company whose net assets fall below the
amountspecifiedinparagraph1(a)tomakeadistributiontoshare-
holders when on the closing date of the last financial year the
company's total assets as set out in the annual accounts are, orfollowing such distribution would become, less than one-and-a-halftimestheamountofthecompany'stotalliabilities tocreditorsassetoutintheannualaccounts;
(c) requireanysuchcompanywhichmakesadistributionwhenitsnet
assetsfallbelowtheamountspecifiedinparagraph1(a)toinclude
initsannualaccountsanotetothateffect.
Article 16
Any distribution made contrary to Article 15 must be returned by
shareholders who have received it if the company proves that these
shareholders knew of the irregularity of the distributions made to
them,orcouldnotinviewofthecircumstanceshavebeenunawareofit.
Article 17
1. In the case of a serious loss of the subscribed capital, a general
meeting of shareholders must be called within the period laid downby the laws of the Member States, to consider whether the companyshouldbewounduporanyothermeasurestaken.
2. Theamountofalossdeemedtobeseriouswithinthemeaningof
paragraph 1 may not be set by the laws of Member States at a figurehigherthanhalfthesubscribedcapital.
Article 18
1. The shares of a company may not be subscribed for by the
companyitself.
2. Ifthesharesofacompanyhavebeensubscribedforbyaperson
acting in hisownname, but onbehalf of the company, the subscriber
shallbedeemedtohavesubscribedforthemforhisownaccount.
3. ThepersonsorcompaniesorfirmsreferredtoinArticle3(i)or,
in cases of an increase in subscribed capital, the members of theadministrative or management body shall be liable to pay for shares
subscribedincontraventionofthisArticle.
However, the laws of a Member State may provide that any such
person may be released from his obligation if he proves that no faultisattributabletohimpersonally.1977L0091—EN—01.01.1995—001.001—8
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Article 19
1. Where thelawsofaMemberStatepermit acompany toacquire
itsownshares,eitheritselforthroughapersonactinginhisownnamebutonthecompany'sbehalf,theyshallmakesuchacquisitionssubjecttoatleastthefollowingconditions:
(a) authorization shall be given by the general meeting, which shall
determine the terms and conditions of such acquisitions, and in
particularthemaximumnumberofsharestobeacquired,thedura-tion of the period for which the authorization is given and whichmay not exceed 18 months, and, in the case of acquisition forvalue, the maximum and minimum consideration. Members of the
administrative or management body shall be required to satisfy
themselves that at the time when each authorized acquisition iseffected the conditions referred to in subparagraphs (b), (c) and(d)arerespected;
(b) thenominalvalueor,intheabsencethereof,theaccountableparof
the acquired shares, including shares previously acquired by thecompanyandheldbyit,andsharesacquiredbyapersonactinginhisownnamebutonthecompany'sbehalf,maynotexceed 10%
ofthesubscribedcapital;
(c) the acquisitions may not have the effect of reducing the net asset
belowtheamountmentionedinArticle15(1)(a);
(d) onlyfullypaidupsharesmaybeincludedinthetransaction.
2. The laws of a Member State may provide for derogations from
the first sentence of paragraph 1 (a) where the acquisition of acompany's own shares is necessary to prevent serious and imminentharm to the company. In such a case, the next general meeting must
beinformedbytheadministrative ormanagement bodyofthereasons
forandnatureoftheacquisitionseffected,ofthenumberandnominalvalueor,intheabsenceofanominalvalue,theaccountablepar,ofthesharesacquired,oftheproportionofthesubscribedcapitalwhichtheyrepresent,andoftheconsiderationfortheseshares.
3. MemberStatesmaydecidenottoapplythefirstsentenceofpara-
graph 1 (a) to shares acquired by either the company itself or by apersonactinginhisownnamebutonthecompany'sbehalf,fordistri-butiontothatcompany'semployeesortotheemployeesofanassociatecompany. Such shares must be distributed within 12 months of their
acquisition.
Article 20
1. MemberStatesmaydecidenottoapplyArticle19to:
(a) shares acquired in carrying out a decision to reduce capital, or in
thecircumstancesreferredtoinArticle39;
(b) sharesacquiredasaresultofauniversaltransferofassets;
(c) fullypaid-upsharesacquiredfreeofchargeorbybanksandother
financialinstitutionsaspurchasingcommission;
(d) shares acquired by virtue of a legal obligation or resulting froma
courtrulingfortheprotectionofminorityshareholdersintheevent,
particularly,ofamerger,achangeinthecompany'sobjectorform,transfer abroad of the registered office, or the introduction ofrestrictionsonthetransferofshares;
(e) shares acquired froma shareholder in the event of failure to pay
themup;
(f) shares acquired in order to indemnify minority shareholders in
associatedcompanies;
(g) fullypaid-upsharesacquiredunderasaleenforcedbyacourtorder
forthepaymentofadebtowedtothecompanybytheowneroftheshares;
(h) fully paid-up shares issued by an investment company with fixed
capital, as defined in the second subparagraph of Article 15 (4),and acquired at the investor's request by that company or by an1977L0091—EN—01.01.1995—001.001—9
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associate company. Article 15 (4) (a) shall apply. These acquisi-
tionsmaynothavetheeffect ofreducingthenetassetsbelowtheamount ofthe subscribedcapital plusanyreservesthedistribution
ofwhichisforbiddenbylaw.
2. Sharesacquiredinthecaseslistedinparagraph1(b)to(g)above
must,however,bedisposedofwithinnotmorethanthreeyearsoftheir
acquisition unless the nominal value or, in the absence of a nominalvalue, the accountable par of the shares acquired, including shareswhich the company may have acquired through a personacting in hisown name but on the company's behalf, does not exceed 10% of thesubscribedcapital.
3. If the shares are not disposed of within the period laid down in
paragraph 2, they must be cancelled. The laws of a Member State
maymakethiscancellationsubjecttoacorrespondingreductioninthe
subscribed capital. Such a reduction must be prescribed where theacquisition of shares to be cancelled results in the net assets havingfallenbelowtheamountspecifiedinArticle15(1)(a).
Article 21
Shares acquired in contravention of Articles 19 and 20 shall be
disposed of within one year of their acquisition. Should they not be
disposedofwithinthatperiod,Article20(3)shallapply.
Article 22
1. Where thelawsofaMemberStatepermit acompany toacquire
itsownshares,eitheritselforthroughapersonactinginhisownnamebut on the company's behalf, they shall make the holding of these
sharesatalltimessubjecttoatleastthefollowingconditions:
(a) amongtherightsattachingtotheshares,therighttovoteattaching
tothecompany'sownsharesshallinanyeventbesuspended;
(b) if the shares are included among the assets shown in the balance
sheet, a reserve of the same amount, unavailable for distribution,shallbeincludedamongtheliabilities.
2. Where thelawsofaMemberStatepermit acompany toacquire
itsownshares,eitheritselforthroughapersonactinginhisownnamebut on the company's behalf, they shall require the annual report tostateatleast:
(a) thereasonsforacquisitionsmadeduringthefinancialyear;
(b) the number and nominal value or, in the absence of a nominal
value, the accountable par of the shares acquired and disposed ofduring the financial year and the proportion of the subscribed
capitalwhichtheyrepresent;
(c) inthecaseofacquisitionordisposalforavalue,theconsideration
fortheshares;
(d) the number and nominal value or, in the absence of a nominal
value, the accountable par of all the shares acquired and held bythe company and the proportion of the subscribed capital whichtheyrepresent.
Article 23
1. Acompanymaynotadvancefunds,normakeloans,norprovide
security,withaviewtotheacquisitionofitssharesbyathirdparty.
2. Paragraph 1 shall not apply to transactions concluded by banks
and other financial institutions in the normal course of business, norto transactions effected with a view to the acquisition of shares by orfor the company's employees or the employees of an associatecompany.However,thesetransactionsmaynothavetheeffectofredu-
cingthenetassetsbelowtheamountspecifiedinArticle15(1)(a).
3. Paragraph1shallnotapplytotransactionseffectedwithaviewto
acquisitionofsharesasdescribedinArticle20(1)(h).1977L0091—EN—01.01.1995—001.001—10
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Article 24
1. Theacceptanceofthecompany'sownsharesassecurity,eitherby
thecompanyitselforthroughapersonactinginhisownnamebutonthecompany'sbehalf,shallbetreatedasanacquisitionforthepurposesofArticles19,20(1),22and23.
2. TheMemberStatesmaydecidenottoapplyparagraph1totrans-
actions concluded by banks and other financial institutions in thenormalcourseofbusiness.
Article 24a
1. (a) The subscription, acquisition or holding of shares in a public
limited-liability company by another company within themeaning of Article 1 of Directive 68/151/EEC in which thepublic limited-liability company directly or indirectly holds a
majorityofthevotingrightsoronwhichitcandirectlyorindir-
ectly exercise adominant influence shallberegardedashavingbeeneffectedbythepubliclimited-liability companyitself;
(b) subparagraph (a) shall also apply where the other company is
governed by the law of a third country and has a legal formcomparabletothoselistedinArticle1ofDirective68/151/EEC.
2. However, where the public limited-liability company holds a
majority of the voting rights indirectly or can exercise a dominantinfluence indirectly, Member States need not apply paragraph 1 ifthey provide for the suspension of the voting rights attached to the
shares in the public limited-liability company held by the other
company.
3. Intheabsenceofcoordinationofnationallegislationongroupsof
companies,MemberStatesmay:
(a) define the cases in which a public limited-liability company shall
be regarded as being able to exercise a dominant influence on
another company; if a Member State exercises this option, its
national law must in any event provide that a dominant influencecanbeexercisedifapubliclimited-liability company:
— hastherighttoappointordismissamajorityofthemembersof
the administrative organ, of the management organ or of thesupervisory organ, and is at the same time a shareholder ormemberoftheothercompanyor
— isashareholder ormember oftheothercompany andhassole
control ofamajority ofthevotingrightsofitsshareholdersormembersunderanagreementconcludedwithothershareholdersormembersofthatcompany.
MemberStatesshallnotbeobligedtomakeprovisionforanycases
otherthanthosereferredtointhefirstandsecondindents;
(b) define the cases in which a public limited-liability company shall
beregardedasindirectlyholdingvotingrightsorasableindirectly
toexerciseadominantinfluence;
(c) specify the circumstances in which a public limited-liability
companyshallberegardedasholdingvotingrights.
4. (a) Member States need notapply paragraph 1where the subscrip-
tion, acquisition or holding is effected on behalf of a personother than the person subscribing, acquiring or holding theshares, who is neither the public limited-liability companyreferred to in paragraph 1 nor another company in which thepublic limited-liability company directly or indirectly holds a
majorityofthevotingrightsoronwhichitcandirectlyorindir-
ectlyexerciseadominantinfluence.
(b) Member States need notapply paragraph 1where the subscrip-
tion,acquisition orholdingiseffected bytheothercompanyinitscapacity andinthe context ofits activities asaprofessionaldealer in securities, provided that it is a member of a stockexchange situated or operating within a Member State, or is1977L0091—EN—01.01.1995—001.001—11
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approved or supervised by an authority of a Member State
competent to supervise professional dealers in securities which,withinthemeaningofthisDirective,mayincludecreditinstitu-
tions.
5. Member States need not apply paragraph 1 where shares in a
public limited-liability company held by another company wereacquired before the relationship between the two companies corre-spondedtothecriterialaiddowninparagraph1.
However,thevotingrightsattachedtothosesharesshallbesuspended
and the shares shall be taken into account when it is determined
whethertheconditionlaiddowninArticle19(1)(b)isfulfilled.
6. MemberStatesneednotapplyArticle20(2)or(3)orArticle21
where shares in a public limited-liability company are acquired byanothercompanyonconditionthattheyprovidefor:
(a) the suspension of the voting rights attached to the shares in the
publiclimited-liability companyheldbytheothercompany,and
(b) themembersoftheadministrativeorthemanagementorganofthe
publiclimited-liabilitycompanytobeobligedtobuybackfromtheothercompanythesharesreferredtoinArticle 20(2)and(3)andArticle21atthepriceatwhichtheothercompanyacquiredthem;this sanction shall be inapplicable only where the members of the
administrativeorthemanagementorganofthepubliclimited-liabi-
litycompanyprovethatthatcompanyplayednopartwhatsoeverinthesubscriptionfororacquisitionofthesharesinquestion.
Article 25
1. Any increase in capital must be decided upon by the general
meeting. Both this decision and the increase in the subscribed capitalshall be published in the manner laid down by the laws of each
MemberState,inaccordancewithArticle3ofDirective68/151/EEC.
2. Nevertheless, the statutes or instrument of incorporation or the
general meeting, the decision of which must be published in accor-dance with the rules referred to in paragraph 1, may authorize anincrease in the subscribed capital up to a maximum amount whichthey shall fix with due regard for any maximum amount provided for
bylaw.Where appropriate, theincreaseinthesubscribedcapital shall
bedecidedonwithinthelimitsoftheamountfixed,(SIC!fixed)bythecompany body empowered to do so. The power of such body in thisrespect shall be for a maximum period of five years and may berenewed one or more times by the general meeting, each time for a
periodnotexceedingfiveyears.
3. Where there are several classes of shares, the decision by the
general meeting concerning the increase in capital referred to in para-graph 1 or the authorization to increase the capital referred to inparagraph 2, shall be subject to a separate vote at least for each classofshareholderwhoserightsareaffectedbythetransaction.
4. This Article shall apply to the issue of all securities which are
convertibleintosharesorwhichcarrytherighttosubscribeforshares,
butnottotheconversion ofsuchsecurities, nortothe exercise oftherighttosubscribe.
Article 26
Shares issued for a consideration, in the course of an increase in
subscribed capital, must be paid up to at least 25 % of their nominalvalue or, in the absence of a nominal value, of their accountable par.Whereprovisionismadeforanissuepremium,itmustbepaidinfull.
Article 27
1. Wheresharesareissuedforaconsiderationotherthanincashin
the course of an increase in the subscribed capital the consideration1977L0091—EN—01.01.1995—001.001—12
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▼B
mustbetransferredinfullwithinaperiodoffiveyearsfromthedeci-
siontoincreasethesubscribedcapital.
2. The consideration referred to in paragraph 1 shall be the subject
of a report drawn upbefore the increase in capital is made by one ormore experts who are independent of the company and appointed or
approved by an administrative or judicial authority. Such experts may
be natural persons as well as legal persons and companies and firmsunderthelawsofeachMemberState.
Article10(2)and(3)shallapply.
3. MemberStatesmaydecidenottoapplyparagraph2intheevent
of an increase in subscribed capital made in order to give effect to a
mergerorapublicofferforthepurchaseorexchangeofsharesandtopaytheshareholdersofthecompanywhichisbeingabsorbedorwhichistheobjectofthepublicofferforthepurchaseorexchangeofshares.
4. Member States may decide not to apply paragraph 2 if all the
shares issued in the course of an increase in subscribed capital areissuedforaconsiderationotherthanincashtooneormorecompanies,onconditionthatalltheshareholdersinthecompanywhichreceivetheconsiderationhaveagreednottohaveanexperts'reportdrawnupand
thattherequirementsofArticle10(4)(b)to(f)aremet.
Article 28
Whereanincreaseincapitalisnotfullysubscribed,thecapitalwillbe
increasedbytheamountofthesubscriptionsreceivedonlyifthecondi-tionsoftheissuesoprovide.
Article 29
1. Whenever the capital is increased by consideration in cash, the
shares must be offered on a pre-emptive basis to shareholders inproportiontothecapitalrepresentedbytheirshares.
2. ThelawsofaMemberState:
(a) need not apply paragraph 1 above to shares which carry a limited
righttoparticipateindistributionswithinthemeaningofArticle15
and/orinthecompany'sassetsintheeventofliquidation;or
(b) may permit, where the subscribed capital of a company having
several classes of shares carrying different rights with regard tovoting, or participation in distributions within the meaning ofArticle 15 or in assets in the event of liquidation, is increased byissuing new shares in only one of these classes, the right of pre-
emption of shareholders of the other classes to be exercised only
after the exercise of this right by the shareholders of the class inwhichthenewsharesarebeingissued.
3. Any offer of subscription on a pre-emptive basis and the period
within which this right must be exercised shall be published in thenational gazette appointed in accordance with Directive 68/151/EEC.However,thelawsofaMemberStateneednotprovideforsuchpubli-cationwhereallacompany'ssharesareregistered.Insuchcase,allthe
company'sshareholdersmustbeinformedinwriting.Therightofpre-
emptionmustbeexercisedwithinaperiodwhichshallnotbelessthan14 days fromthe date of publication of the offer or fromthe date ofdispatchoftheletterstotheshareholders.
4. The right of pre-emption may not be restricted or withdrawn by
the statutes or instrument of incorporation. This may, however, bedone by decision of the general meeting. The administrative ormanagement body shall be required to present to such a meeting a
written report indicating the reasons for restriction or withdrawal of
the right of pre-emption, and justifying the proposed issue price. Thegeneral meeting shall act in accordance with the rules for a quorumandamajoritylaiddowninArticle40.Itsdecisionshallbepublishedinthemannerlaid downbythelawsofeach MemberState,inaccor-dancewithArticle3ofDirective68/151/EEC.1977L0091—EN—01.01.1995—001.001—13
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5. The laws of a Member State may provide that the statutes, the
instrument of incorporation or the general meeting, acting in accor-dance with the rules for a quorum, a majority and publication set out
in paragraph 4, may give the power to restrict or withdraw the right
ofpreemption tothecompanybodywhichisempoweredtodecideonan increase in subscribed capital within the limit of the authorizedcapital. This power may not be granted for a longer period than thepowerforwhichprovisionismadeinArticle25(2).
6. Paragraphs 1to 5shall apply tothe issueofall securities which
are convertible into shares or which carry the right to subscribe for
shares,butnottotheconversionofsuchsecurities,nortotheexerciseoftherighttosubscribe.
7. Therightofpre-emptionisnotexcludedforthepurposesofpara-
graphs4and5where,inaccordance withthe decision toincrease thesubscribedcapital,sharesareissuedtobanksorotherfinancialinstitu-
tionswithaviewtotheirbeingofferedtoshareholdersofthecompany
inaccordancewithparagraphs1and3.
Article 30
Any reduction in the subscribed capital, except under a court order,
mustbesubject atleasttoadecision ofthegeneral meeting acting inaccordance with the rules for a quorumand a m ajority laid down inArticle40withoutprejudicetoArticles36and37.Suchdecisionshall
be published in the manner laid down by the laws of each Member
StateinaccordancewithArticle3ofDirective68/151/EEC.
Thenoticeconveningthemeetingmustspecifyatleastthepurposeof
thereductionandthewayinwhichitistobecarriedout.
Article 31
Where there are several classes of shares, the decision by the general
meeting concerning a reduction in the subscribed capital shall besubjecttoaseparatevote,atleastforeachclassofshareholderswhose
rightsareaffectedbythetransaction.
Article 32
1. In the event of a reduction in the subscribed capital, at least the
creditorswhoseclaimsantedatethepublicationofthedecisiontomakethe reduction shall be entitled at least to have the right to obtainsecurityforclaimswhichhavenotfallenduebythedateofthatpubli-cation. The lawsofa Member State shall lay downthe conditions for
theexerciseofthisright.Theymaynotsetasidesuchrightunlessthe
creditorhasadequate safeguards,orunlessthelatterarenotnecessaryinviewoftheassetsofthecompany.
2. ThelawsoftheMemberStatesshallalsostipulateatleastthatthe
reductionshallbevoidorthatnopaymentmaybemadeforthebenefitof the shareholders, until the creditors have obtained satisfaction or a
courthasdecidedthattheirapplicationshouldnotbeaccededto.
3. This Article shall apply where the reduction in the subscribed
capital isbroughtaboutbythetotalorpartialwaivingofthepaymentofthebalanceoftheshareholders'contributions.
Article 33
1. Member States need not apply Article 32 to a reduction in the
subscribed capital whose purpose is to offset losses incurred or toincludesumsofmoneyinareserveprovidedthat,followingthisopera-
tion,theamountofsuchreserveisnotmorethan10%ofthereduced
subscribedcapital.Exceptintheeventofareductioninthesubscribedcapital, this reserve may not be distributed to shareholders; it may beusedonlyforoffsettinglossesincurredorforincreasingthesubscribedcapital by the capitalization of such reserve, in so far as the MemberStatespermitsuchanoperation.1977L0091—EN—01.01.1995—001.001—14
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2. In the cases referred to in paragraph 1 the laws of the Member
States must at least provide for the measures necessary to ensure thattheamountsderivingfromthereductionofsubscribedcapitalmaynot
be used for making payments or distributions to shareholders or
discharging shareholders fromthe obligation to m ake their contribu-tions.
Article 34
Thesubscribedcapital maynotbereducedtoanamountlessthanthe
minimum capital laid down in accordance with Article 6. However,Member States may permit such a reduction if they also provide that
the decision to reduce the subscribed capital may take effect only
whenthesubscribedcapitalisincreasedtoanamountatleastequaltotheprescribedminimum.
Article 35
WherethelawsofaMemberStateauthorizetotalorpartialredemption
of the subscribed capital without reduction of the latter, they shall atleastrequirethatthefollowingconditionsareobserved:
(a) where the statutes or instrument of incorporation provide for
redemption, the latter shall be decided on by the general meeting
votingatleastundertheusualconditionsofquorumandmajority.Where the statutes or instrument of incorporation do not providefor redemption, the latter shall be decided upon by the generalmeeting acting at least under the conditions of quorum and
majority laid down in Article 40. The decision must be published
in the manner prescribed by the laws of each Member State, inaccordancewithArticle3ofDirective68/151/EEC;
(b) only sums which are available for distribution within the meaning
ofArticle15(1)maybeusedforredemptionpurposes;
(c) shareholderswhosesharesareredeemed shallretain theirrightsin
thecompany,withtheexceptionoftheirrightstotherepaymentoftheir investment and participation in the distribution of an initial
dividendonunredeemedshares.
Article 36
1. Where the laws of a Member State may allow companies to
reduce their subscribed capital by compulsory withdrawal of shares,theyshallrequirethatatleastthefollowingconditionsareobserved:
(a) compulsory withdrawal must be prescribed or authorized by the
statutes or instrument of incorporation before subscription of theshareswhicharetobewithdrawnaresubscribedfor;
(b) where the compulsory withdrawal is merely authorized by the
statutesorinstrumentofincorporation,itshallbedecideduponbythe general meeting unless it has been unanimously approved bytheshareholdersconcerned;
(c) thecompanybodydecidingonthecompulsorywithdrawalshallfix
the terms and manner thereof, where they have not already beenfixedbythestatutesorinstrumentofincorporation;
(d) Article 32 shall apply except in the case of fully paid up shares
which are made available to the company free of charge or arewithdrawn using sums available for distribution in accordancewithArticle15(1);inthesecases,anamountequaltothenominalvalue or, in the absence thereof, to the accountable par of all the
withdrawn shares must be included in a reserve. Except in the
eventofareduction inthesubscribedcapital thisreservemaynotbe distributed to shareholders. It can be used only for offsettinglossesincurredorforincreasingthesubscribedcapitalbythecapi-talization of suchreserve, in sofar as Member States permit such
anoperation;
(e) the decision on compulsory withdrawal shall be published in the
mannerlaiddownbythelawsofeachMemberStateinaccordancewithArticle3ofDirective68/151/EEC.1977L0091—EN—01.01.1995—001.001—15
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2. Articles 30 (1), 31, 33 and 40 shall not apply to the cases to
whichparagraph1refers.
Article 37
1. In the case of a reduction in the subscribed capital by the with-
drawalofsharesacquired bythecompanyitselforbyapersonactingin his own name but on behalf of the company, the withdrawal mustalwaysbedecidedonbythegeneralmeeting.
2. Article32shallapplyunlessthesharesarefullypaidupandare
acquired free of charge or using sums available for distribution inaccordance with Article 15(1); in these cases an amount equal to thenominal value or,intheabsence thereof, totheaccountable par ofalltheshareswithdrawnmustbeincludedinareserve.Exceptintheevent
ofareductioninthesubscribedcapital,thisreservemaynotbedistrib-
utedtoshareholders.Itmaybeusedonlyforoffsettinglossesincurredor for increasing the subscribed capital by the capitalization of suchreserve,insofarastheMemberStatespermitsuchanoperation.
3. Articles31,33and40shallnotapplytothecasestowhichpara-
graph1refers.
Article 38
InthecasescoveredbyArticles35,36(1)(b)and37(1),whenthere
are several classes of shares, the decision by the general meeting
concerning redemption of the subscribed capital or its reduction by
withdrawal of shares shall be subject to a separate vote, at least foreachclassofshareholderswhoserightsareaffectedbythetransaction.
Article 39
Where the laws of a Member State authorize companies to issue
redeemable shares, they shall require that the following conditions, at
least,arecompliedwithfortheredemptionofsuchshares:
(a) redemptionmustbeauthorizedbythecompany'sstatutesorinstru-
mentofincorporation beforetheredeemable sharesaresubscribed
for;
(b) thesharesmustbefullypaidup;
(c) thetermsandthemanner ofredemption mustbelaiddowninthe
company'sstatutesorinstrumentofincorporation;
(d) redemptioncanbeonlyeffectedbyusingsumsavailablefordistri-
butioninaccordance withArticle 15(1)ortheproceedsofanewissuemadewithaviewtoeffectingsuchredemption;
(e) anamountequaltothenominalvalueor,intheabsencethereof,to
theaccountableparofalltheredeemedsharesmustbeincludedinareservewhichcannotbedistributedtotheshareholders,exceptin
the event of a reduction in the subscribed capital; it may be used
only for the purpose of increasing the subscribed capital by thecapitalization ofreserves;
(f) subparagraph (e) shall notapply to redemption usingthe proceeds
ofanewissuemadewithaviewtoeffectingsuchredemption;
(g) where provision is made for the payment of a premium to share-
holdersinconsequenceofaredemption,thepremiummaybepaidonly fromsum s available for distribution in accordance withArticle 15 (1), or froma reserve other than that referred to in (e)which may not be distributed to shareholders except in the eventof a reduction in the subscribed capital; this reserve may be used
only for the purposes of increasing the subscribed capital by the
capitalization of reserves or for covering the costs referred to inArticle 3 (j) or the cost of issuing shares or debentures or for thepayment of a premium to holders of redeemable shares or deben-tures;
(h) notification of redemption shall be published in the manner laid
downbythelawsofeachMemberStateinaccordancewithArticle3ofDirective68/151/EEC.1977L0091—EN—01.01.1995—001.001—16
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Article 40
1. The laws of the Member States shall provide that the decisions
referredtoinArticles29(4)and(5),30,31,35and38mustbetaken
atleastbyamajorityofnotlessthantwothirdsofthevotesattaching
tothesecuritiesorthesubscribedcapitalrepresented.
2. The laws of the Member States may, however, lay down that a
simple majority of the votes specified in paragraph 1 is sufficientwhenatleasthalfthesubscribedcapitalisrepresented.
Article 41
1. Member States may derogate from Article 9 (1), Article 19 (1)
(a),firstsentence,and(b)andfromArticles25,26and29totheextentthat such derogations are necessary for the adoption or application ofprovisions designed to encourage the participation of employees, or
other groups of persons defined by national law, in the capital of
undertakings.
2. Member States may decide not to apply Article 19 (1) (a), first
sentence,andArticles30,31,36,37,38and39tocompaniesincorpo-ratedunderaspecial lawwhichissuebothcapital sharesandworkers'shares, the latter being issued to the company's employees as a body,
who are represented at general meetings of shareholders by delegates
havingtherighttovote.
Article 42
For the purposes of the implementation of this Directive, the laws of
the Member States shall ensure equal treatment to all shareholderswhoareinthesameposition.
Article 43
1. Member States shall bring into force the laws, regulations and
administrativeprovisionsneededinordertocomplywiththisDirectivewithin two years of its notification. They shall forthwith informtheCommissionthereof.
2. MemberStatesmaydecidenottoapplyArticle3(g),(i),(j)and
(k)tocompaniesalreadyinexistenceatthedateofentryintoforceof
theprovisionsreferredtoinparagraph1.
They may provide that the other provisions of this Directive shall not
applytosuchcompaniesuntil18monthsafterthatdate.
However, this time limit may be three years in the case of Articles 6
and 9 and five years in the case of unregistered companies in theUnitedKingdomandIreland.
3. Member States shall ensure that they communicate to the
Commission the text of the main provisions of national law which
theyadoptinthefieldcoveredbythisDirective.
Article 44
ThisDirectiveisaddressedtotheMemberStates.1977L0091—EN—01.01.1995—001.001—17