No C 203/12 Official Journal of the European Communities 12.8.86 
Proposal for an Eleventh Council Directive based on Article 54 (3) (g) of the Treaty concerning 
disclosure requirements in respect of branches opened in a Member State by certain types of 
companies governed by the law of another State 
COM(86) 397final 
(Submitted by the Commission to the Council on 29 July 1986) 
(86/C 203/07) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 54 (3) 
(g) thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Par­
liament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas in order to facilitate the exercise of the freedom 
of establishment in respect of companies covered by 
Article 58 of the Treaty, Article 54 (3) (g) and the 
general programme on the suppression of restrictions on 
the freedom of establishment require coordination of the 
safeguards required of companies and firms in the 
Member States for the protection of the interests of 
Members and others; 
Whereas hitherto this coordination has been effected in 
respect of disclosure by the adoption of the First Council 
Directive 68/151/EEC (') covering limited liability 
companies and continued in the field of accounting by 
the Fourth Council Directive 78/660/EEC (2) on annual 
accounts of certain types of companies, the Seventh 
Council Directive 83/349/EEC (3) on consolidated 
accounts and by the Eighth Council Directive 84/253/ 
EEC (4) on the approval of persons performing the 
statutory audits of accounting documents; 
"Whereas these Directives apply to companies as such and 
also to their subsidiary companies but do not cover their 
branches, whereas, the opening of a branch, as well as 
the creation of a subsidiary company, is one of the 
possibilities currently open to companies in exercising 
their rights of establishment in another Member State; 
Whereas in respect of branches the lack of coordination, 
in particular concerning disclosure, gives rise to disparity 
in respect of protection of shareholders and third parties 
between companies which operate in other Member 
O OJNoL65, 14.3. 1968, p. 8. 
(2) OJ No L 222, 14. 8. 1978, p. 11. 
(J) OJNoL193, 18.7. 1983, p. 1. 
(4) OJ No L 126, 12. 5. 1984, p. 20. States by opening branches and those which operate by 
creating subsidiary companies and it is appropriate to 
eliminate such disparities in order to ensure an 
equivalent level of protection for those concerned; 
Whereas in this field the divergence among the laws of 
the Member States interferes with the exercise of the 
right of establishment and it is therefore necessary to 
eliminate such divergence to guarantee the exercise of 
the said right; 
Whereas to ensure the protection of persons who deal 
with companies by way of a branch, measures in respect 
of disclosure are required in the Member State in which 
the branch is situated, and to effect such disclosure it is 
necessary to make use of the procedure already 
instituted for limited liability companies within the 
Community; 
Whereas the said disclosure with an exception in respect 
of those having powers of representation may be 
confined to information concerning the branch itself 
together with a reference to the register of the company 
of which the branch is part, given that, pursuant to 
Community rules, all information covering the company 
as such is available on that register; 
Whereas national provisions in respect of disclosure of 
accounting documents relating to the branch can no 
longer be justified following the coordination of national 
law in respect of the drawing up, statutory audit and 
disclosure of the accounting documents of the company, 
whereas in consequence it is sufficient to disclose, on the 
register of the branch, the annual accounts of the 
company and, in default of those, the consolidated 
accounts in which the company is included; 
Whereas to avoid any discrimination arising out of the 
country of origin of the company, the Directive should 
also cover branches created by companies governed by 
the law of third countries and based on legal forms 
comparable with limited liability companies, whereas for 
these branches it is necessary to apply certain provisions 
different from those applying to branches of companies 
governed by the law of other Member States given that 
the Directives set out above do not apply to companies 
of third countries, 
12. 8. 86 Official Journal of the European Communities No C 203/13 
HAS ADOPTED THIS DIRECTIVE: 
I 
Branches of companies from other Member States 
Article 1 
Documents and particulars relating to a branch set up in 
a Member State by a company which is subject to the 
law of another Member State and to which Directive 
68/151/EEC applies shall be disclosed according to the 
law of the Member State of the branch in compliance 
with Article 3 of the said Directive. 
Article 2 
\. The compulsory disclosure provided for in Article 1 
shall cover the following documents and particulars: 
(a) the address of the branch; 
(b) the register in which the company file mentioned in 
Article 3 of Directive 68/151/EEC is kept, together 
with the registration number in that register; 
(c) the name of the branch if that is different from the 
name of the company; 
(d) the appointment, termination of office and parti­
culars of the persons who, either as a body 
constituted pursuant to law or as members of any 
such body and those who as permanent repres­
entatives of the company for the activities of the 
branch, are authorized to represent the company in 
dealings with third parties and in legal proceedings. 
It must be stated whether the persons authorized to 
present the company may do so alone or must act 
jointly; 
(e) the accounting documents covered by Article 3; 
(f) the closure of the branch. 
2. The Member State of the place of the branch may 
require the deposit in the register of the branch of the 
certified signature of the persons referred to in 
paragraph 1 (d). 
Article 3 
1. The compulsory disclosure of accounting 
documents provided for by Article 2 (1) (e) shall be 
limited to the annual accounts and annual report of the 
company. These documents must have been drawn up 
and audited in accordance with the law of the Member 
State by which the company is governed in compliance 
with Directives 78/660/EEC and 84/253/EEC. 
2. Paragraph 1 shall not apply where, pursuant to 
Article 57 of Directive 78/660/EEC, the provisions 
thereof concerning the content, auditing and publication of the annual accounts do not apply to a company which 
is a subsidiary company within the meaning of Directive 
83/349/EEC. In this event the compulsory disclosure 
provided for in Article 1 shall cover the consolidated 
accounts and the consolidated annual report of the 
parent undertaking of the company. These documents 
must have been drawn up and audited in accordance 
with the law of the Member State by which the parent 
undertaking is governed in compliance with Council 
Directives 83/349/EEC and 84/253/EEC. 
3. The Member State in which the branch was created 
may stipulate that the documents and particulars referred 
to in paragraphs 1 and 2 must be published in its official 
language and that their translation must be certified. 
Article 4 
Member States shall prescribe that letters and order 
forms used by the branch shall state, in addition to the 
information prescribed by Article 4 of Directive 68/151/ 
EEC, the register in which the file in respect of the 
branch is kept together with the number of the branch in 
that register. 
II 
Branches of companies from third countries 
Article 5 
Documents and particulars concerning a branch set up in 
a Member State by a company which is not governed by 
the law of a Member State but which is of a legal form 
comparable with the types of company to which 
Directive 68/151/EEC applies shall be published 
according to the law of the Member State of the branch 
in accordance with Article 3 of the said Directive. 
Article 6 
1. The compulsory disclosure provided for in Article 5 
shall cover at least the following documents and parti­
culars : 
(a) The address of the branch; 
(b) the law of the State by which the company is 
governed; 
(c) where the said law so provides, the register in which 
the company is recorded and the registration number 
of the company in that register; 
(d) the instruments of constitution, and the 
memorandum and articles of association if they are 
contained in a separate instrument with all 
amendments to these documents; 
(e) the legal form of the company, its seat, its name and 
its object and the amount of subscribed capital if 
these matters are not shown in the documents 
covered by subparagraph (d); 
No C 203/14 Official Journal of the European Communities 12.8.86 
(f) the name of the branch if that is different from the 
name of the company; 
(g) the appointment, termination of office and parti­
culars of the persons who either as a body 
constituted pursuant to law or as members of any 
such body and those who as permanent rep­
resentatives of the company for the activities of the 
branch are authorized to represent the company in 
dealings with third parties and in legal proceedings. 
(h) It must be stated whether the persons authorized to 
represent the company may do so alone or must act 
jointly; 
(i) the closure of the branch. 
2. The Member State of the place of the branch may 
require the deposit in the register of the branch of the 
certified signature of the persons referred to in 
paragraph 1 (g). 
Article 7 
1. The compulsory disclosure of accounting 
documents provided for by Article 6 (1) (h) shall apply 
to at least the annual accounts and annual report of the 
company. 
2. Where the company produces consolidated 
accounts and a consolidated annual report instead of 
annual accounts and an annual report the compulsory 
disclosure provided for in Article 5 shall cover such 
consolidated accounts and the consolidated annual 
report. 
3. The documents covered by paragraphs 1 and 2 
must have been drawn up and audited pursuant to the 
law which governs the company and in accordance with 
the relevant provisions of such legislation or, in default 
thereof, in accordance with the accounting principles 
generally accepted in the State in question. 
4. Article 3 (3) shall apply. 
Article 8 
Member States shall prescribe that letters and order 
forms used by the branch shall state the register in which 
the file in respect of the branch is kept together with the 
number of the branch in that register. 
Ill Article 9 
Member States shall provide for appropriate penalties in 
case of failure to disclose the matters set out in Articles 
1, 2, 3, 5, 6 and 7 and of omission from commercial 
documents of the compulsory particulars provided for in 
Articles 4 and 8. 
Article 10 
Each Member State shall determine by which persons the 
disclosure formalities provided for in this Directive are to 
be carried out. 
Article 11 
Pending subsequent coordination, Member States need 
not apply the provisions of Articles 3 and 7 to the 
branches of banks, other financial institutions and 
insurance companies. 
Article 12 
1. Member States shall bring into force the laws, regu­
lations and administrative provisions necessary for them 
to comply with this Directive by 1 January 1990. They 
shall forthwith inform the Commission thereof. 
2. Member States may stipulate that the provisions 
referred to in paragraph 1 shall not apply until 1 January 
1992. 
3. Member States shall communicate to the 
Commission the texts of the main provisions of national 
law which they adopt in the field covered by this 
Directive. 
Article 13 
The Contact Committee set up pursuant to Article 52 of 
Directive 78/660/EEC shall also: 
(a) facilitate, without prejudice to the provisions of 
Articles 169 and 170 of the Treaty, the harmonized 
application of this Directive, through regular 
meetings dealing, in particular, with practical 
problems arising in connection with its application; 
(b) advise the Commission, if necessary, on any 
necessary additions or amendments to this Directive. 
Article 14 
Transitional and final provisions This Directive is addressed to the Member States.