EN    EN EN 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 25.6.2008 
SEC(2008) 2099 
  
COMMISSION STAFF WORKING DOCUMENT 
 
accompanying the 
Proposal for a 
COUNCIL REGULATION 
 
on the Statute for a European Private Company (SPE) 
   
Summary of the Impact assessment  
{COM(2008) 396 final} 
{SEC(2008) 2098} 
EN 2   EN 1. I NTRODUCTION  
1.1. Procedural aspects 
The European Private Company Statute (SPE) was a medium term measure (2005-2008) of 
the Commission's Action Plan on Modernisin g Company Law and E nhancing Corporate 
Governance in the EU. It also forms part of the Single Market Review and is one of the key 
features of the Commission's Small Busine ss Act which was announced in November 2007 
and seeks to make the Single Market accessi ble to small and medium-sized enterprises 
(SMEs). 
A feasibility study on the SPE was publis hed in December 2005. The Legal Affairs 
Committee of the European Parliament held a public hearing on the SPE in June 2006. It 
issued an own-initiative report,  endorsed by the Eu ropean Parliament in February 2007, which 
calls for a Commission proposal for an SPE.  
In addition to two public cons ultations which were conducted  between July and November 
2007, DG Internal Market and Services organi sed a public conference in March 2008 which 
gathered experts from various Member Stat es and addressed key options for an SPE. 
1.2. Low participation of SMEs  in the Internal Market 
SMEs account for more than 99% of companies a nd for almost 70% of private employment in 
the European Union. Despite the key role of SMEs in the European economy, only 8% of 
SMEs engage in cross-border trade and only a bout 5% have set up subsidiaries or joint 
ventures abroad. Recent surveys and public c onsultations show that  despite their strong 
potential for cross-border expansion, SMEs face legal and administrative obstacles which 
hinder their development in  the Single Market.  
The main legal and administrative obstacles  which SMEs face in their cross-border 
development in the Si ngle Market include: 
– Compliance costs associated with the formation of a company. Compliance costs 
on the formation of a company include e ssentially the costs of registration and 
legal advice, notary fees a nd the minimum start-up capital.  While minimum 
capital requirements and administrative co sts are the same for national and foreign 
company founders, the cost of legal advice  falls to a greater extent on foreign 
founders who have to get acquainted with new company forms and regimes.  
– Difficulties and compliance costs associat ed with the operation of a company 
generated by the diversity of national rules.  Different legal rules on the 
organisation and structure of companies,  company organs, shareholders' rights, 
shares, etc., make the day-to-day operation of foreign subsidiaries more expensive 
compared with domestic subsidiaries. The day-to-day operation of foreign subsidiaries requires conti nuous legal advice. Even though the cost of such advice 
will largely depend on the size and complexity of the subsidiary, a third of respondents to consultations consider it to be in excess of €10,000 per year. 
– Lack of trust in foreign legal forms.  SMEs find it often difficult to operate in 
another Member State under their home company form, and as a result often 
choose to set up subsidiaries instead. This is  true, in particular, of SMEs from the 
EN 3   EN EU-12, which use company forms which ar e less known in other Member States 
than the company forms of the EU-15. In this respect, the ability to do business 
under a company form common to all Member States, which would confer an EU label, is considered a significant asset. 
2. T
HE EXPECTED DEVELOPMENT AND THE NEED FOR THE EU TO ACT  
The diversity of national company laws and forms, as business unfriendly as it may be, is long 
anchored in the legal traditions  of the Member States. Nothi ng today gives grounds to expect 
this to change over the short term. Furthermore,  only action undertaken at  EU level can create 
a legal environment that is sufficiently uniform  throughout the EU to serve the practical needs 
of SMEs wishing to take advantage of the Single Market. 
Should the EU legislator decide to adopt an SPE Statute, Article 308 of the EC Treaty would 
constitute the appropr iate legal basis. 
3. O BJECTIVES  
The initiative seeks to enhance the competitiven ess of SMEs by facilitating their operation in 
the Single Market. In particular , the initiative aims at provi ding a flexible corporate law 
regime widely know across the EU and based on  common principles, adapted to the specific 
needs of SMEs. It also aims at reducing the compliance costs which arise both on the creation 
and on the operation of compan ies in other Member States. 
4. P OLICY OPTIONS  
The impact assessment presents three alternative high level policy options to the SPE.  
– Taking no action and relying on existing legislation and case law . The existing 
legal framework, however, is ill-suited to the specific needs of SMEs and fails to 
reduce the legal and administrative obstacl es which SMEs face when seeking to 
expand in the Single Market.  
– Harmonising the company laws  of the Member States , so that the requirements on 
the creation and the operation of compan ies are uniform in all Member States. 
Even though the scope of such harmoni sation may be limited, such an option 
would require Member States to amend rule s which have formed part of the core 
provisions of their national company laws for decades and with which they are regarded as forming a whole. Such a ma jor overhaul of national legislations does 
not appear politically feasible at present. 
– Improving the SE  and adapting it to the needs of SMEs, but achieving a 'one-size-
fits-all' company form would make of the SE Regulation extremely complex. In 
addition, the SE is to be evaluated in 2009. 
By contrast with the above options, the SPE al one would give individuals and companies, no 
matter where they are based in the EU, access to  the same company form. The SPE could be 
created from scratch by a legal or natural pe rson or be established by an existing company, 
either by transformation or by a merger with another company. The SPE could be established 
EN 4   EN in a Member State and provide se rvices or operate via branches or subsidiaries in its own or 
another country. A group of companies could al so be transformed into a group of SPEs (with 
a mother company being an SPE or another company form).  
In addition to the European label, which acco rding to the respondents to consultations would 
make cross-border business easier, the SPE is expected to offer significant cost savings  due to 
its uniformity  throughout the EU. The mere use of the same company form in several Member 
States would limit the need fo r legal advice upon the creation of subsidiaries and reduce 
associated costs. The legal costs associated wi th the day-to-day operation of subsidiaries in 
several Member States would also be reduced. Furthermore, the SPE would leave company 
founders full flexibility  to choose the internal organisation of  the company best suited to their 
needs and activities and thus save costs . The SPE could offer a high level of legal certainty  by 
avoiding as much as possible references to national law as far as the company form is 
concerned. Lastly, the SPE would exist in th e Member States alongside national company 
forms. The introduction of the SPE in the legal or ders of the Member States would not entail 
any harmonisation of core aspects of nationa l company legislations and therefore it seems 
politically feasible. 
5. S UB-OPTIONS FOR A SPE 
The impact assessment assesses a number of op tions for the key features of the SPE, which 
have a direct impact on the SPE's flexibility, accessibility, uniformity  and legal certainty.  
5.1. Companies falling within the scope of the SPE Statute 
Any restriction of the SPE to businesses of a certain size would oblige businesses to switch 
company forms at some point, which is both cumbersome and costly. To avoid exposing 
SMEs to undue administrative burdens and costs,  the SPE, therefore, sh ould be available to 
businesses upon formation and remain available to them as they develop and grow. However, like national private limited company forms, the SPE  should not be allowed to offer its shares 
to the public or access the stock markets, as this  would entail detailed rules, especially with 
regard to the internal organisation of the SPE, to protect shareholders. 
5.2. Degree of autonomy vis-a-vis national legislation 
The first option is that of an SPE, which woul d be totally autonomous and would not rely in 
any way on national legislati on. This option, which would requi re the full harmonisation of 
tax and labour laws and th erefore it is unrealistic.  
The second option is that of an SPE, which w ould be autonomous from  the national company 
law regimes. Such an option would achieve a satisfactory degree of uniformity in the EU as company law aspects would be covered in the Statute and would therefore be the same across the EU. This would also ensure legal certa inty while making it possible to offer to 
shareholders a high degree of flexibility in de termining the internal organisation of the SPE. 
The third option is that if an SPE, which woul d heavily rely on national company legislations. 
While such option may offer a high degree of political acceptability, it would result in a different SPE in every Member State and woul d deprive individuals and companies of the 
specific benefits of a uniform company form th roughout the EU, in partic ular cost savings and 
increased efficiency. It would, therefor e, fail to fulfil the policy objectives. 
EN 5   EN 5.3. Degree of uniformity of the Statute 
The first option would be one of a comprehensiv e Statute which would s eek to regulate both 
the external and the internal affairs of the SPE. Even though this would ensure full uniformity 
of the SPE in the EU and a very high degree of  legal certainty, it would deprive shareholders 
of any of the much needed flexibility, notably in determining the internal organisation of the 
SPE. The pursuit of such a 'one-size-fits-all' company statute would mo st likely make the SPE 
statute unattractive to businesses. 
The second option envisaged is the exact opposite to the first option, i.e., a SPE Statute which 
would leave full flexibility to the shareholders  of the SPE to regulate in the articles of 
association all company matters, including capital, creditor protection or employee 
participation. Such an option, which is likely to result in insufficien t third party protection, 
would certainly meet strong opposition from the Member States.  
The third and chosen option consis ts in regulating in the SPE Statute the main characteristics 
of the SPE (limited liability, share capital, contributions, name) and matters relevant to third parties (creditor protection, disc losure, employee participation), while leaving internal matters 
(general meetings, management structure) to th e free determination of th e shareholders in the 
articles of association. This balanced option w ould entail limited references to national law, 
thus ensure a significant degree  of uniformity of the SPE in the EU and legal certainty, while 
offering much needed flexibility as regards internal organisation. 
5.4. Cross-border dimension 
The first, chosen, option would be to make th e SPE accessible to all f ounders, irrespective of 
any cross-border dimension. In other words,  the SPE would come in competition with 
national company law forms. This is the chosen option because it offers a high degree of legal 
certainty and offers founders a free choice be tween the SPE and national company law forms, 
even though it could prove politically less a cceptable than the second, more restrictive, 
option. 
The second option would consist in making acce ss to the SPE subject to a cross-border 
requirement (e.g. shareholders from different Member States or evidence of cross-border 
activity). Such a SPE may be politically mo re acceptable because it would appear more 
focused on making the Internal Market more accessible. However, it would offer less legal certainty because of the need to control the existence of the cross-border dimension on a 
continuous basis. It would also limit the c hoice of company forms for entrepreneurs.  
5.5. The company seat and its transfer 
The first option which could be envisaged is to pr ovide that the registered office and the head 
office of the SPE must be in the same Member Stat e. The transfer of the registered office of a 
SPE to another Member State, as a result, would entail the transfer of the head office. This 
option is contrary to th e ruling of the European Court of Justice in the Centros  case. 
The second option is to allow the SPE to have its registered office and its head office in 
different Member States and th erefore, to transfer its regi stered office without having to 
transfer its head office at the same time. Th e express provision for this freedom would be 
enshrined in the Regulation would ensure uniformity across the EU and offer a very high degree of flexibility in the organisation of bus inesses. It would also achieve a satisfactory 
EN 6   EN degree of legal certainty, though th e regulation would have to st ate clearly which national law 
is applicable to the SPE. 
The third option under consideration would cons ist in leaving this matter to the national 
legislation of the Member State of registration of the SPE. Such an option would not offer any 
uniformity since there would be a different regi me in every Member State. Nor would it offer 
much legal certainty. In additi on, it would not bring any improve ment to the cu rrent situation 
and the impossibility of companies to transfer their registered office from one Member State 
to the other. 
5.6. Capital regime 
Mandatory minimum capital requirements account  for a large part of company formation 
costs and are no longer considered  as appropriate creditors' protection. Also, care should be 
taken to make the SPE accessible to entrepreneurs of all EU-27 Member States. A minimum capital of €1, as exists in the UK 'limited' or the French SARL, therefore, appears to be the 
better option. In light of the differences in standards of living, opting for a mandatory 
minimum capital requirement, whether base d on the average in the EU-15 (€10,000-12,000) 
or in the EU-12 (€4,000) would make the SPE less accessible to entrepreneurs of the EU-12. 
5.7. Distributions to shareholders 
The first envisaged option consists in building the capital regime of the SPE on a simplified 
second Company Law Directive. Even though such  an option would ensure a high degree of 
legal certainty and uniformity across the EU , it would, however, deprive SMEs of any 
flexibility and prove exceedingly burdensome.  
The second option would make dist ributions to shareholders subj ect to a balance sheet test 
that is well known across the Member States. This option would entail  less uniformity as 
more freedom would be left to the shareholders in the articles of asso ciation, but a satisfactory 
degree of flexibility would be left to shareh olders regarding e.g. capital increase or share 
redemption.  
The third option, i.e. the combina tion of a balance sheet test w ith a mandatory liquidity test, 
though ensuring a higher degree of protec tion for creditors, would expose SPEs to 
disproportionate costs.  
5.8. Employee participation 
The first option envisaged is to create an ad- hoc employee participation regime for the SPE. 
In light of the fact that solu tions on employee participation alr eady exist in the SE Statute and 
in the Directive on cross-border mergers and of the high political sensitivity of employee participation questions, this  option should be discarded. 
The second option would consist in  leaving employee participation entirely to the legislation 
of the Member State in which the SPE has its re gistered office. While this option would offer 
SPE a high degree of flexibility, it would not address the question of employee participation 
in case of cross-border seat tr ansfer. The fact that the SPE could be used to escape national 
employee participation regimes, could make the SPE unacceptable.  
The third option would consist in subjecting the SPE to the employee par ticipation regime of 
the Member State in which it has its registered  office while inserting in the SPE statute rules 
EN 7   EN governing employee participation in the case of the cross-bor der transfer of the SPE's 
registered office. While giving SPEs the needed flexibility, this option would ensure that the 
SPE cannot be used as a vehicle to escape employee participation regimes. 
6. E VALUATION AND MONITORING  
The Commission will conduct a yearly review of th e take up of the SPE in the Member States. 
In addition, the Commission will conduct an assessment of the effectiveness and relevance of 
the SPE Statute to be published five years after the entry into fo rce of the Statute.