EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute of European Companies and Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE) provide rules for the setting-up and operation of the respective entities they regulate (SEs and SCEs). Both the SE Regulation and the SCE Regulation also harmonise the deadline for holding the general meeting. Both Regulations provide an identical rule under their respective article 54, according to which, SEs and SCEs shall hold a general meeting at least once each calendar year, within six months of the end of their financial year. The Regulations do not provide any exception to this.

The outbreak of the Covid-19 pandemic has a serious impact on companies and cooperative societies, including SEs and SCEs. In particular, due to the confinement and social distancing measures, as well as to the need to concentrate their efforts on managing the economic activity constraints, SEs and SCEs face considerable difficulties to respect the deadline to hold their general meeting referred to in Article 54 of their respective regulations. While Member States have put in place emergency measures in the area of company law to support and help companies to comply with the current exceptional circumstances, such measures do not address the SEs nor the SCEs, because, in both cases, their Statute is an EU Regulation.

The holding of general meetings is of essential importance to ensure that legally required or economically necessary decisions having impact on the company itself, its shareholders and third parties are taken in due time. Given that the exceptional circumstances due to Covid-19 are beyond the control of SEs, SCEs and Member States alike, this proposal sets at EU level a temporary derogation to the deadline provided for in Article 54 of the SE Regulation and Article 54 of the SCE Regulation. Such a temporary derogation should provide the flexibility for the SEs and the SCEs to hold their general meeting within 12 months of the end of the financial year, but in any case no later than 31 December 2020. This temporary derogation is necessary in order to allow the SEs and the SCEs to ensure the necessary preparations of the general meetings and to provide legal certainty as regards the fulfilment of the obligations laid down in the SE and SCE Regulations.

Furthermore, Article 53 of the SE Regulation provides that the organisation and conduct of general meetings together with voting procedures shall be governed by the law applicable to public limited-liability companies in the Member State in which the SE's registered office is situated. Article 53 of the SCE Regulation provides a corresponding rule. Similar to national emergency measures already adopted by many Member States regarding public limited liability or other companies or entities, it is important that Member States ensure, in line with Article 53 of the respective regulations, that SEs and SCEs are allowed to use digital tools and processes and that SEs and SCEs endeavour to apply such tools and processes to the maximum extent possible in order to ensure that the necessary decisions are taken.