Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE)
Date: 2003-07-22
Institutions: Council of the European Union
Subjects: European cooperative, cross-border cooperation, equal treatment, legal status

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1435/2003

of 22 July 2003

on the Statute for a European Cooperative Society (SCE)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 308 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Parliament (2),

Having regard to the opinion of the European Economic and
Social Committee (3),

Whereas:

(1)

(2)

The European Parliament adopted resolutions on
13 April 1983 on cooperatives in the European Com-
munity (4), on 9 July 1987 on the contribution of
cooperatives to regional development (5), on 26 May
1989 on the role of women in cooperatives and local
employment initiatives (6), on 11 February 1994 on the
contribution of cooperatives to regional development (7)
and on 18 September 1998 on the role of cooperatives
in the growth of women’s employment (8).

The completion of the internal market and the improve-
ment it brings about in the economic and social situation
throughout the Community mean not only that barriers
to trade should be removed, but also that the structures
of production should be adapted to the Community
dimension. For that purpose it is essential that com-

( 1) OJ C 99, 21.4.1992, p. 17 and OJ C 236, 31.8.1993, p. 17.
( 2) OJ C 42, 15.2.1993, p. 75 and opinion delivered on 14 May

2003 (not yet published in the Official Journal).

( 3) OJ C 223, 31.8.1992, p. 42.
( 4) OJ C 128, 16.5.1983, p. 51.
( 5) OJ C 246, 14.9.1987, p. 94.
( 6) OJ C 158, 26.6.1989, p. 380.
( 7) OJ C 61, 28.2.1994, p. 231.
( 8) OJ C 313, 12.10.1998, p. 234.

(3)

(4)

(5)

(6)

panies of all types the business of which is not limited
to satisfying purely local needs should be able to plan
and carry out the reorganisation of their business on a
Community scale.

The legal framework within which business should be
carried on in the Community is still based largely on
national laws and therefore does not correspond to the
economic framework within which it should develop if
the objectives set out in Article 18 of the Treaty are to
be achieved. That situation forms a considerable obstacle
to the creation of groups of companies from different
Member States.

The Council has adopted Regulation (EC) No 2157/
2001 (9) establishing the legal form of the European
Company (SE) according to the general principles of
the public limited-liability company. This is not an
instrument which is suited to the specific features of
cooperatives.

The European Economic Interest Grouping (EEIG), as
provided for in Regulation (EEC) No 2137/85 (10), allows
undertakings to promote certain of their activities in
common, while nevertheless preserving their indepen-
dence, but does not meet the specific requirements of
cooperative enterprise.

The Community, anxious to ensure equal terms of
competition and to contribute to its economic develop-
ment, should provide cooperatives, which are a form of
organisation generally recognised in all Member States,
with adequate legal instruments capable of facilitating
the development of their cross-border activities. The
United Nations has encouraged all governments to
ensure a supportive environment in which cooperatives
can participate on an equal footing with other forms of
enterprise (11).

( 9) OJ L 294, 10.11.2001, p. 1.
(10) OJ L 199, 31.7.1985, p. 1.
(11) Resolution adopted by the General Assembly of the 88th plenary
meeting of the United Nations, 19 December 2001 (A/RES/56/
114).

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(7)

(8)

(9)

Cooperatives are primarily groups of persons or legal
entities with particular operating principles that are
different from those of other economic agents. These
include the principles of democratic structure and con-
trol and the distribution of the net profit for the financial
year on an equitable basis.

These particular principles include notably the principle
of the primacy of the individual which is reflected in the
specific rules on membership, resignation and expulsion,
where the ‘one man, one vote’ rule is laid down and the
right
to vote is vested in the individual, with the
implication that members cannot exercise any rights
over the assets of the cooperative.

Cooperatives have a share capital and their members
may be either individuals or enterprises. These members
may consist wholly or partly of customers, employees
or suppliers. Where a cooperative is constituted of
members who are themselves cooperative enterprises, it
is known as a ‘secondary’ or ‘second-degree’ cooperative.
In some circumstances cooperatives may also have
among their members a specified proportion of investor
members who do not use their services, or of third
parties who benefit by their activities or carry out work
on their behalf.

(10) A European cooperative society (hereinafter referred to
as ‘SCE’) should have as its principal object the satisfac-
tion of its members’ needs and/or the development of
their economic and/or social activities, in compliance
with the following principles:

— its activities should be conducted for the mutual
benefit of
the members so that each member
benefits from the activities of the SCE in accordance
with his/her participation,

— members of the SCE should also be customers,
employees or suppliers or should be otherwise
involved in the activities of the SCE,

— there should be no artificial restrictions on mem-

bership,

— net assets and reserves should be distributed on
winding-up according to the principle of disin-
terested distribution, that is to say to another
cooperative body pursuing similar aims or general
interest purposes.

(11) Cross-border cooperation between cooperatives in the
Community is currently hampered by legal and adminis-
trative difficulties which should be eliminated in a
market without frontiers.

(12) The introduction of a European legal form for cooperat-
ives, based on common principles but taking account of
their specific features, should enable them to operate
outside their own national borders in all or part of the
territory of the Community.

(13) The essential aim of this Regulation is to enable the
establishment of an SCE by physical persons resident in
different Member States or legal entities established
under the laws of different Member States. It will also
make possible the establishment of an SCE by merger of
two existing cooperatives, or by conversion of a national
cooperative into the new form without
first being
wound up, where that cooperative has its registered
office and head office within one Member State and an
establishment or subsidiary in another Member State.

(14)

In view of the specific Community character of an SCE,
the ‘real seat’ arrangement adopted by this Regulation in
respect of SCEs is without prejudice to Member States’
laws and does not pre-empt the choices to be made for
other Community texts on company law.

— control should be vested equally in members,
although weighted voting may be allowed, in order
to reflect each member’s contribution to the SCE,

(15) References to capital in this Regulation should comprise
solely the subscribed capital. This should not affect any
undistributed joint assets/equity capital in the SCE.

— there should be limited interest on loan and share

capital,

— profits should be distributed according to business
done with the SCE or retained to meet the needs of
members,

(16) This Regulation does not cover other areas of law
such as taxation, competition, intellectual property or
insolvency. The provisions of the Member States’ law
and of Community law are therefore applicable in the
above areas and in other areas not covered by this
Regulation.

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(17) The rules on the involvement of employees in the
European cooperative society are laid down in Directive
2003/72/EC (1), and those provisions thus form an
indissociable complement to this Regulation and are to
be applied concomitantly.

— Council Directive 92/49/EEC on the coordination
of laws, regulations and administrative provisions
relating to direct insurance other than life assurance
(third non-life insurance Directive) (8).

(18) Work on the approximation of national company law
has made substantial progress so that certain provisions
adopted by the Member State where the SCE has
its registered office for the purpose of implementing
directives on companies may be referred to by analogy
for the SCE in areas where the functioning of the
cooperative does not require uniform Community rules,
such provisions being appropriate to the arrangements
governing the SCE, especially:

— first Council Directive 68/151/EEC of 9 March
1968 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 of Article 48
of the Treaty, with a view to making such safegu-
ards equivalent throughout the Community (2),

— fourth Council Directive 78/660/EEC of 25 July
1978 on the annual accounts of certain types of
companies (3),

— seventh Council Directive 83/349/EEC of 13 June

1983 on consolidated accounts (4),

— eighth Council Directive 84/253/EEC of 10 April
1984 on the approval of persons responsible for
carrying out the statutory audits of accounting
documents (5),

(20) This form of organisation should be optional,

HAS ADOPTED THIS REGULATION:

CHAPTER I

GENERAL PROVISIONS

Article 1

Form of the SCE

1.
A cooperative society may be set up within the territory
of the Community in the form of a European Cooperative
Society (SCE) on the conditions and in the manner laid down
in this Regulation.

The subscribed capital of an SCE shall be divided into

2.
shares.

The number of members and the capital of an SCE shall be
variable.

— 11th Council Directive 89/666/EEC of 21 Decem-
ber 1989 concerning disclosure requirements in
respect of branches opened in a Member State by
certain types of company governed by the law of
another State (6).

Unless otherwise provided by the statutes of the SCE when
that SCE is formed, no member shall be liable for more than
the amount he/she has subscribed. Where the members of the
SCE have limited liability, the name of the SCE shall end in
‘limited’.

(19) Activities in the field of financial services in particular in
so far as
they concern credit establishments and
insurance undertakings have been the subject of legislat-
ive measures pursuant to the following Directives:

— Council Directive 86/635/EEC of 8 December 1986
on the annual accounts and consolidated accounts
of banks and other financial institutions (7),

( 1) See page 25 of this Official Journal.
( 2) OJ L 65, 14.3.1968, p. 8; Directive as last amended by the 1994

Act of Accession.

( 3) OJ L 222, 14.8.1978, p. 11; Directive as last amended by Directive

2001/65/EC (OJ L 283, 27.10.2001, p. 28).

( 4) OJ L 193, 18.7.1983, p. 1; Directive as last amended by

Directive 2001/65/EC.
( 5) OJ L 126, 12.5.1984, p. 20.
( 6) OJ L 395, 30.12.1989, p. 36.
( 7) OJ L 372, 31.12.1986; Directive as last amended by Directive

2001/65/EC.

its members’ needs and/or the development of

An SCE shall have as its principal object the satisfaction
3.
their
of
economic and social activities,
in particular through the
conclusion of agreements with them to supply goods or
services or to execute work of the kind that the SCE carries out
or commissions. An SCE may also have as its object the
satisfaction of its members’ needs by promoting, in the manner
set forth above, their participation in economic activities, in
one or more SCEs and/or national cooperatives. An SCE may
conduct its activities through a subsidiary.

4.
An SCE may not extend the benefits of its activities to
non-members or allow them to participate in its business,
except where its statutes provide otherwise.

(8) OJ L 228, 11.8.1992, p. 1; Directive as last amended by Directive

2002/13/EC (OJ L 77, 20.3.2002, p. 17).

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5.

An SCE shall have legal personality.

2.

The subscribed capital shall not be less than EUR 30 000.

Employee involvement in an SCE shall be governed by

6.
the provisions of Directive 2003/72/EC.

Article 2

Formation

1.

An SCE may be formed as follows:

— by five or more natural persons resident in at least two

Member States,

— by five or more natural persons and companies and firms
within the meaning of the second paragraph of Article 48
of the Treaty and other legal bodies governed by public
or private law, formed under the law of a Member State,
resident in, or governed by the law of, at least two
different Member States,

— by companies and firms within the meaning of the second
paragraph of Article 48 of the Treaty and other legal
bodies governed by public or private law formed under
the law of a Member State which are governed by the law
of at least two different Member States,

— by a merger between cooperatives formed under the law
of a Member State with registered offices and head offices
within the Community, provided that at least two of
them are governed by the law of different Member States,

— by conversion of a cooperative formed under the law of
a Member State, which has its registered office and head
office within the Community if for at least two years it
has had an establishment or subsidiary governed by the
law of another Member State.

2.
A Member State may provide that a legal body the head
office of which is not in the Community may participate in
the formation of an SCE provided that legal body is formed
under the law of a Member State, has its registered office in
that Member State and has a real and continuous link with a
Member State’s economy.

Article 3

Minimum capital

The laws of

3.
the Member State requiring a greater
subscribed capital for legal bodies carrying on certain types of
activity shall apply to SCEs with registered offices in that
Member State.

4.
The statutes shall lay down a sum below which sub-
scribed capital may not be allowed to fall as a result of
repayment of the shares of members who cease to belong to
the SCE. This sum may not be less than the amount laid down
in paragraph 2. The date laid down in Article 16 by which
members who cease to belong to the SCE are entitled to
repayment shall be suspended as long as repayment would
result in subscribed capital falling below the set limit.

5.
The capital may be increased by successive subscriptions
by members or on the admission of new members, and it may
be reduced by the total or partial repayment of subscriptions,
subject to paragraph 4.

Variations in the amount of the capital shall not require
amendment of the statutes or disclosure.

Article 4

Capital of the SCE

1.
The subscribed capital of an SCE shall be represented by
the members’ shares, expressed in the national currency. An
SCE whose registered office is outside of the Euro-area may
also express its shares in euro. More than one class of shares
may be issued.

The statutes may provide that different classes of shares shall
confer different entitlements with regard to the distribution
of surpluses. Shares conferring the same entitlements shall
constitute one class.

2.
The capital may be formed only of assets capable of
economic assessment. Members’ shares may not be issued for
an undertaking to perform work or supply services.

3.
Shares shall be held by named persons. The nominal
value of shares in a single class shall be identical. It shall be
laid down in the statutes. Shares may not be issued at a price
lower than their nominal value.

The capital of an SCE shall be expressed in the national
1.
currency. An SCE whose registered office is outside the Euro-
area may also express its capital in euro.

4.
Shares issued for cash shall be paid for on the day of the
subscription to not less than 25 % of their nominal value. The
balance shall be paid within five years unless the statutes
provide for a shorter period.

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Shares issued otherwise than for cash shall be fully paid

5.
for at the time of subscription.

Article 5

Statutes

6.
The law applicable to public limited-liability companies
in the Member State where the SCE has its registered office,
concerning the appointment of experts and the valuation of
any consideration other than cash, shall apply by analogy to
the SCE.

1.
For the purposes of this Regulation, ‘the statutes of an
SCE’ shall mean both the instrument of incorporation and,
when they are the subject of a separate document, the statutes
of the SCE.

7.
The statutes shall lay down the minimum number of
shares which must be subscribed for in order to qualify for
membership. If they stipulate that the majority at general
meetings shall be constituted by members who are natural
persons and if they lay down a subscription requirement for
members wishing to take part in the activities of the SCE, they
may not make membership subject to subscription for more
than one share.

8. When it considers the accounts for the financial year, the
annual general meeting shall by resolution record the amount
of the capital at the end of the financial year and the variation
by reference to the preceding financial year.

At the proposal of the administrative or management organ,
the subscribed capital may be increased by the capitalisation
of all or part of the reserves available for distribution, following
a decision of the general meeting, in accordance with the
quorum and majority requirements for an amendment of the
statutes. New shares shall be awarded to members in pro-
portion to their shares in the previous capital.

9.
The nominal value of shares may be increased by
consolidating the shares issued. Where such an increase
necessitates a call for supplementary payments from the
members under provisions laid down in the statutes, the
decision shall be taken by the general meeting in accordance
with the quorum and majority requirements for the amend-
ment of the statutes.

The nominal value of shares may be reduced by

10.
subdividing the shares issued.

11.
In accordance with the statutes and with the agreement
either of the general meeting or of the management or
administrative organ, shares may be assigned or sold to a
member or to anyone acquiring membership.

12.
An SCE may not subscribe for its own shares, purchase
them or accept them as security, either directly or through a
person acting in his/her own name but on behalf of the SCE.

The founder members shall draw up the statutes of the
2.
SCE in accordance with the provisions for the formation of
cooperative societies laid down by the law of the Member
State in which the SCE has its registered office. The statutes
shall be in writing and signed by the founder members.

3.
The law for the precautionary supervision applicable in
the Member State in which the SCE has its registered office to
public limited-liability companies during the phase of the
constitution shall apply by analogy to the control of the
constitution of the SCE.

4.

The statutes of the SCE shall include at least:

— the name of the SCE, preceded or followed by the
abbreviation ‘SCE’ and, where appropriate, the word
‘limited’,

— a statement of the objects,

— the names of the natural persons and the names of the
entities which are founder members of the SCE, indicating
their objects and registered offices in the latter case,

— the address of the SCE’s registered office,

— the conditions and procedures for the admission, expul-

sion and resignation of members,

— the rights and obligations of members, and the different
categories of member, if any, and the rights and obli-
gations of members in each category,

— the nominal value of the subscribed shares, the amount
of the subscribed capital, and an indication that the
capital is variable,

— specific rules concerning the amount to be allocated from
the surplus, where appropriate, to the legal reserve,

— the powers and responsibilities of the members of each

of the governing organs,

— provisions governing the appointment and removal of

the members of the governing organs,

— the majority and quorum requirements,

An SCE’s shares may, however, be accepted as security in the
ordinary transactions of SCE credit institutions.

— the duration of the existence of the society, where this is

of limited duration.

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Article 6

Registered office

The registered office of an SCE shall be located within the
Community, in the same Member State as its head office. A
Member State may, in addition, impose on SCEs registered in
its territory the obligation of locating the head office and the
registered office in the same place.

Article 7

Transfer of registered office

1.
The registered office of an SCE may be transferred to
another Member State in accordance with paragraphs 2 to 16.
Such transfer shall not result in the winding-up of the SCE or
in the creation of a new legal person.

The management or administrative organ shall draw up
2.
a transfer proposal and publicise it
in accordance with
Article 12, without prejudice to any additional forms of
publication provided for by the Member State of the registered
office. That proposal shall state the current name, the registered
office and number of the SCE and shall cover:

(a)

the proposed registered office of the SCE;

(b)

the proposed statutes of the SCE including, where appro-
priate, its new name;

(c)

the proposed timetable for the transfer;

5.
Any member who opposed the transfer decision at the
general meeting or at a sectorial or section meeting may tender
his/her resignation within two months of the general meeting’s
decision. Membership shall terminate at the end of the financial
year in which the resignation was tendered; the transfer shall
not take effect in respect of that member. Resignation shall
entitle the member to repayment of shares on the conditions
laid down in Articles 4(4) and 16.

6.
No decision to transfer may be taken for two months
after publication of the proposal. Such a decision shall be
taken as laid down in Article 62(4).

Before the competent authority issues the certificate
7.
mentioned in paragraph 8, the SCE shall satisfy it that, in
respect of any liabilities arising prior to the publication of the
transfer proposal, the interests of creditors and holders of
other rights in respect of the SCE (including those of public
bodies) have been adequately protected in accordance with
requirements laid down by the Member State where the SCE
has its registered office prior to the transfer.

the first
A Member State may extend the application of
subparagraph to liabilities that arise, or may arise, prior to the
transfer.

The first and second subparagraphs shall apply without
prejudice to the application to SCEs of the national legislation
of Member States concerning the satisfaction or securing of
payments to public bodies.

8.
In the Member State in which the SCE has its registered
office, the court, notary or other competent authority shall
issue a certificate attesting to the completion of the acts and
formalities to be accomplished before the transfer.

(d)

(e)

any implication the transfer may have on employees’
involvement;

any rights provided for the protection of members,
creditors and holders of other rights.

9.
The new registration may not be effected until the
certificate referred to in paragraph 8 has been submitted and
evidence has been produced that the formalities required for
registration in the country of the new registered office have
been completed.

3.
The management or administrative organ shall draw up
a report explaining and justifying the legal and economic
aspects as well as the employment effects of the transfer and
the transfer for members,
explaining the implications of
creditors, employees and holders of other rights.

10.
The transfer of an SCE’s registered office and the
consequent amendment of its statutes shall take effect on the
date on which the SCE is registered in accordance with
Article 11(1) in the register for its new registered office.

An SCE’s members, creditors and the holders of other
4.
rights, and any other body which according to national law
can exercise this right, shall be entitled, at least one month
before the general meeting called upon to decide on the
transfer, to examine, at the SCE’s registered office, the transfer
proposal and the report drawn up pursuant to paragraph 3
and, on request, to obtain copies of these documents free of
charge.

11. When the SCE’s new registration has been effected, the
registry for its new registration shall notify the register for its
old registration. Deletion of the old registration shall be
effected on receipt of that notification, but not before.

the old
The new registration and the deletion of
12.
registration shall be publicised in the Member States concerned,
in accordance with Article 12.

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13.
On publication of an SCE’s new registration, the new
registered office may be relied on as against third parties.
However, as long as the deletion of the SCE’s registration from
the register of its previous registered office has not been
publicised, third parties may continue to rely on the previous
registered office unless the SCE proves that such third parties
were aware of the new registered office.

14.
The laws of a Member State may provide that, as
regards SCEs registered in that Member State, the transfer of a
registered office which would result in a change of the law
applicable shall not take effect if any of that Member State’s
competent authorities opposes it within the two-month period
referred to in paragraph 6. Such opposition may be based only
on grounds of public interest.

(iii)

the provisions of its statutes, in the same way as for
a cooperative formed in accordance with the law of
the Member State in which the SCE has its registered
office.

2.
If national law provides for specific rules and/or restric-
tions related to the nature of business carried out by an SCE,
or for forms of control by a supervisory authority, that law
shall apply in full to the SCE.

Article 9

Principle of non-discrimination

Where an SCE is supervised by a national financial supervisory
authority according to Community directives, the right to
oppose the change of registered office applies to this authority
as well.

Subject to this Regulation, an SCE shall be treated in every
Member State as if it were a cooperative, formed in accordance
with the law of the Member State in which it has its registered
office.

Review by a judicial authority shall be possible.

Article 10

15.
An SCE may not transfer its registered office if proceed-
ings for winding-up, including voluntary winding-up, liqui-
dation, insolvency or suspension of payments or other similar
proceedings have been brought against it.

16.
An SCE which has transferred its registered office to
another Member State shall be considered, in respect of any
course of action arising prior to the transfer as determined in
paragraph 10, as having its registered office in the Member
State where the SCE was registered prior to the transfer, even
if the SCE is sued after the transfer.

Article 8

Law applicable

1.

An SCE shall be governed:

(a)

by this Regulation;

(b) where expressly authorised by this Regulation, by the

provisions of its statutes;

(c)

in the case of matters not regulated by this Regulation or,
where matters are partly regulated by it, of those aspects
not covered by it, by:

(i)

(ii)

the laws adopted by Member States in the implemen-
tation of Community measures relating specifically
to SCEs;

the laws of Member States which would apply to a
cooperative formed in accordance with the law of
the Member State in which the SCE has its registered
office;

Particulars to be stated in the documents

1.
The law applicable, in the Member State where the SCE
has its registered office, to public limited-liability companies
regulating the content of the letters and documents sent to
third parties shall apply by analogy to that SCE. The name of
the SCE shall be preceded or followed by the abbreviation
‘SCE’ and, where appropriate, by the word ‘limited’.

Only SCEs may include the acronym ‘SCE’ before or after

2.
their name in order to determine their legal form.

3.
Nevertheless, companies, firms and other legal entities
registered in a Member State before the date of entry into force
of this Regulation in the names of which the acronym ‘SCE’
appears shall not be required to alter their names.

Article 11

Registration and disclosure requirements

Every SCE shall be registered in the Member State in
1.
which it has its registered office in a register designated by the
law of that Member State in accordance with the law applicable
to public limited-liability companies.

2.
An SCE may not be registered unless an agreement on
arrangements for employee involvement pursuant to Article 4
of Directive 2003/72/EC has been concluded, or a decision
pursuant to Article 3(6) of the Directive has been taken, or the
period for negotiations pursuant to Article 5 of the Directive
has expired without an agreement having been concluded.

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3.
In order for an SCE established by way of merger to be
registered in a Member State which has made use of the option
referred to in Article 7(3) of Directive 2003/72/EC, either an
agreement pursuant to Article 4 of the Directive must have
been concluded on the arrangements for employee involve-
ment, including participation, or none of the participating
cooperatives must have been governed by participation rules
before registration of the SCE.

4.
The statutes of the SCE must not conflict at any time
with the arrangements for employee involvement which
have been so determined. Where such new arrangements
determined pursuant to Directive 2003/72/EC conflict with
the existing statutes, the statutes shall be amended to the
extent necessary.

In this case, a Member State may provide that the management
organ or the administrative organ of the SCE shall be entitled
to amend the statutes without any further decision from the
general meeting.

5.
The law applicable, in the Member State where the SCE
has its registered office, to public limited-liability companies
concerning disclosure requirements of documents and particu-
lars shall apply by analogy to that SCE.

The particulars referred to in paragraph 1 shall be
3.
forwarded to the Office for Official Publications of
the
European Communities within one month of the publication
referred to in Article 12(1).

Article 14

Acquisition of membership

1. Without prejudice to Article 33(1)(b) the acquisition of
membership of an SCE shall be subject to the approval of the
management or administrative organ. Candidates refused
membership may appeal to the general meeting held following
the application for membership.

Where the laws of the Member State of the SCE’s registered
office so permit, the statutes may provide that persons who do
not expect to use or produce the SCE’s goods and services may
be admitted as investor (non-user) members. The acquisition
of such membership shall be subject to approval by the general
meeting or any other organ delegated to give approval by the
general meeting or the statutes.

Article 12

Publication of documents in the Member States

Members who are legal bodies shall be deemed to be users by
virtue of the fact that they represent their own members
provided that their members who are natural persons are
users.

1.
Publication of documents and particulars concerning an
SCE which must be made public under this Regulation shall be
effected in the manner laid down in the laws of the Member
State applicable to public limited-liability companies in which
the SCE has its registered office.

2.
The national rules adopted pursuant to Directive 89/
666/EEC shall apply to branches of an SCE opened in a
Member State other than that in which it has its registered
office. However, Member States may provide for derogations
from the national provisions implementing that Directive to
take account of the specific features of cooperatives.

Unless the statutes provide otherwise, membership of an SCE
may be acquired by natural persons or legal bodies.

The statutes may make admission subject

2.
conditions, in particular:

to other

— subscription of a minimum amount of capital,

— conditions related to the objects of the SCE.

Article 13

3. Where provided for in the statutes, applications for a
supplementary stake in the capital may be addressed to
members.

Notice in the Official Journal of the European Union

Notice of an SCE’s registration and of the deletion of
1.
such a registration shall be published for information purposes
in the Official Journal of the European Union after publication in
accordance with Article 12. That notice shall state the name,
number, date and place of registration of the SCE, the date and
place of publication and the title of publication, the registered
office of the SCE and its sector of activity.

4.
An alphabetical index of all members shall be kept at the
registered office of the SCE, showing their addresses and the
number and class, if appropriate, of the shares they hold. Any
party having a direct legitimate interest may inspect the index
on request, and may obtain a copy of the whole or any part at
a price not exceeding the administrative cost thereof.

2. Where the registered office of an SCE is transferred in
accordance with Article 7, notice shall be published giving the
information provided for in paragraph 1, together with that
relating to the new registration.

5.
Any transaction which affects the manner in which the
capital is ascribed or allotted, or increased or reduced, shall be
entered on the index of members provided for in paragraph 4
no later than the month following that in which the change
occurs.

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6.
The transactions referred to in paragraph 5 shall not take
effect with respect to the SCE or third parties having a direct
legitimate interest until they are entered on the index referred
to in paragraph 4.

7. Members shall on request be given a written statement
certifying that the change has been entered.

Article 15

Loss of membership

1. Membership shall be lost:

— upon resignation,

— upon expulsion, where the member commits a serious
breach of his/her obligations or acts contrary to the
interests of the SCE,

— where authorised by the statutes, upon the transfer of all
shares held to a member or a natural person or legal
entity which has acquired membership,

— upon winding-up in the case of a member that is not a

natural person,

— upon bankruptcy,

— upon death,

— in any other situation provided for in the statutes or in
the legislation on cooperatives of the Member State in
which the SCE has its registered office.

Any minority member who opposed an amendment to

2.
the statutes at the general meeting whereby:

(i)

(ii)

new obligations in respect of payments or other services
were introduced; or

existing obligations
extended; or

for members were substantially

(iii)

the period of notice for resignation from the SCE was
extended to more than five years;

may tender his/her resignation within two months of the
general meeting’s decision.

Membership shall terminate at the end of the current financial
year in the cases referred to in points (i) and (ii) of the first
subparagraph and at the end of the period of notice which
applied before the statutes were amended in the case referred
to in point (iii) thereof. The amendment to the statutes shall
not take effect in respect of that member. Resignation shall
entitle the member to repayment of shares on the conditions
laid down in Articles 3(4) and 16.

Article 16

Financial entitlements of members in the event of resig-
nation or expulsion

to
Except where shares are transferred and subject
1.
Article 3, loss of membership shall entitle the member to
repayment of his/her part of the subscribed capital, reduced in
proportion to any losses charged against the SCE’s capital.

2.
The amounts deducted under paragraph 1 shall be
calculated by reference to the balance sheet for the financial
year in which the entitlement to repayment arose.

3.
The statutes shall lay down the procedures and con-
ditions for exercising the right to resign and lay down the time
within which repayment shall be made, which may not exceed
three years. In any event, the SCE shall not be obliged to make
the repayment less than six months after approval of the
balance sheet issued following the loss of membership.

Paragraphs 1, 2 and 3 shall apply also where only a part

4.
of a member’s shareholding is to be repaid.

CHAPTER II

FORMATION

S e c t i o n 1

G e n e r a l

Article 17

Law applicable during formation

1.
Subject to this Regulation, the formation of an SCE shall
be governed by the law applicable to cooperatives in the
Member State in which the SCE establishes its registered office.

The registration of an SCE shall be made public in

2.
accordance with Article 12.

Article 18

Acquisition of legal personality

3.
The decision to expel a member shall be taken by the
administrative or management organ, after the member has
been heard. The member may appeal against such a decision
to the general meeting.

1.
An SCE shall acquire legal personality on the day of its
registration in the Member State in which it has its registered
office, in the register designated by that State in accordance
with Article 11(1).

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2.
If acts are performed in an SCE’s name before its
registration in accordance with Article 11 and the SCE does
not assume the obligations arising out of such acts after its
registration, the natural persons, companies, firms or other
legal entities which performed those acts shall be jointly and
severally liable therefor, without
in the absence of
agreement to the contrary.

limit

S e c t i o n 2

F o r m a t i o n b y m e r g e r

Article 19

Procedures for formation by merger

An SCE may be formed by means of a merger carried out in
accordance with:

— the procedure for merger by acquisition,

— the procedure for merger by the formation of a new legal

person.

In the case of a merger by acquisition, the acquiring cooperative
shall take the form of an SCE when the merger takes place. In
the case of a merger by the formation of a new legal person,
the latter shall take the form of an SCE.

Article 20

Law applicable in the case of merger

For matters not covered by this section or, where a matter is
partly covered by it,
for aspects not covered by it, each
cooperative involved in the formation of an SCE by merger
shall be governed by the provisions of the law of the Member
State to which it is subject that apply to mergers of cooperatives
and, failing that, the provisions applicable to internal mergers
of public limited-liability companies under the law of that
State.

Article 22

Conditions of merger

1.
The management or administrative organ of merging
cooperatives shall draw up draft terms of merger. The draft
terms of merger shall include the following particulars:

(a)

(b)

the name and registered office of each of the merging
cooperatives together with those proposed for the SCE;

the share-exchange ratio of the subscribed capital and the
amount of any cash payment. If there are no shares, a
precise division of the assets and its equivalent value in
shares;

(c)

the terms for the allotment of shares in the SCE;

(d)

(e)

(f)

(g)

(h)

(i)

the date from which the holding of shares in the SCE will
entitle the holders to share in surplus and any special
conditions affecting that entitlement;

the date from which the transactions of the merging
cooperatives will be treated for accounting purposes as
being those of the SCE;

the special conditions or advantages attached to deben-
tures or securities other than shares which, according to
Article 66, do not confer the status of member;

the rights conferred by the SCE on the holders of shares
to which special rights are attached and on the holders of
securities other than shares, or the measures proposed
concerning them;

the forms of protection of the rights of creditors of the
merging cooperatives;

any special advantage granted to the experts who examine
the draft terms of merger or to members of the adminis-
trative, management, supervisory or controlling organs
of the merging cooperatives;

(j)

the statutes of the SCE;

Article 21

Grounds for opposition to a merger

(k)

information on the procedures by which arrangements
for employee involvement are determined pursuant to
Directive 2003/72/EC.

The laws of a Member State may provide that a cooperative
governed by the law of that Member State may not take part
in the formation of an SCE by merger if any of that Member
State’s competent authorities opposes it before the issue of the
certificate referred to in Article 29(2).

Such opposition may be based only on grounds of public
interest. Review by a judicial authority shall be possible.

The merging cooperatives may include further items in

2.
the draft terms of merger.

3.
The law applicable to public limited-liability companies
concerning the draft terms of a merger shall apply by analogy
to the cross-border merger of cooperatives for the creation of
an SCE.

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Article 23

Article 25

Explanation and justification of the terms of merger

Disclosure requirements

The administrative or management organs of each merging
cooperative shall draw up a detailed written report explaining
and justifying the draft terms of merger from a legal and
economic viewpoint and in particular the share-exchange
ratio. The report shall also indicate any special valuation
difficulties.

Article 24

Publication

1.
The law applicable to public limited-liability companies
concerning the disclosure requirements of the draft terms of
the merging
mergers shall apply by analogy to each of
cooperatives, subject to the additional requirements imposed
by the Member State to which the cooperative concerned is
subject.

2.
Publication of the draft terms of merger in the national
gazette shall, however, include the following particulars for
each of the merging cooperatives:

1.
Any member shall be entitled, at least one month before
the date of the general meeting required to decide on the
merger,
to inspect at the registered office the following
documents:

(a)

the draft terms of merger mentioned in Article 22;

(b)

(c)

(d)

the annual accounts and management reports of the
merging cooperatives for the three preceding financial
years;

an accounting statement drafted in accordance with the
provisions applicable to the internal mergers of public
limited-liability companies, to the extent that such a
statement is required by these provisions;

the experts’ report on the value of shares to be distributed
in exchange for the assets for the merging cooperatives
or the share exchange ratio as provided for in Article 26;

(e)

the report from the cooperative’s administrative or man-
agement organs as provided for in Article 23.

(a)

(b)

(c)

(d)

the type, name and registered office of each merging
cooperative;

2.
A full copy of the documents referred to in paragraph 1
or, if he/she so wishes, an extract, may be obtained by any
member on request and free of charge.

the address of the place or of the register in which the
statutes and all other documents and particulars are filed
in respect of each merging cooperative, and the number
of the entry in that register;

an indication of the arrangements made in accordance
with Article 28 for the exercise of the rights of the
creditors of the cooperative in question and the address
at which complete information on those arrangements
may be obtained free of charge;

an indication of the arrangements made in accordance
with Article 28 for the exercise of the rights of members
of the cooperative in question and the address at which
complete information on those arrangements may be
obtained free of charge;

Article 26

Report of independent experts

1.
For each merging cooperative, one or more independent
experts, appointed by that cooperative in accordance with the
provisions of Article 4(6), shall examine the draft terms of
merger and draw up a written report for the members.

2.
A single report for all merging cooperatives may be
drawn up where this is permitted by the laws of the Member
States to which the cooperatives are subject.

(e)

the name and registered office proposed for the SCE;

(f)

the conditions determining the date on which the merger
will take effect pursuant to Article 31.

The law applicable to the mergers of public limited-
3.
liability companies concerning the rights and obligations of
experts shall apply by analogy to the merger of cooperatives.

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Article 27

Approval of the terms of merger

The general meeting of each of the merging cooperatives

1.
shall approve the draft terms of the merger.

Employee involvement in the SCE shall be decided upon
2.
pursuant to Directive 2003/72/EC. The general meetings of
each of the merging cooperatives may reserve the right to
make registration of the SCE conditional upon its express
ratification of the arrangements so decided.

Article 28

Laws applicable to formation by merger

1.
The law of the Member State governing each merging
cooperative shall apply as in the case of a merger of public
limited-liability companies, taking into account
the cross-
border nature of the merger, with regard to the protection of
the interests of:

— creditors of the merging cooperatives,

— holders of bonds in the merging cooperatives.

A Member State may,

in the case of the merging
2.
cooperatives governed by its law, adopt provisions designed
to ensure appropriate protection for members who have
opposed the merger.

Article 29

Scrutiny of merger procedure

3.
If the law of a Member State to which a merging
cooperative is subject provides for a procedure to scrutinise
and amend the share-exchange ratio, or a procedure to
compensate minority members, without preventing the regis-
tration of the merger, such procedures shall apply only if the
other merging cooperatives situated in Member States which
do not provide for such procedure explicitly accept, when
approving the draft terms of the merger in accordance with
Article 27(1), the possibility for the members of that merging
cooperative to have recourse to such procedure. In such cases,
the court, notary or other competent authorities may issue the
certificate referred to in paragraph 2 even if such a procedure
has been started. The certificate must, however, indicate that
the procedure is pending. The decision in the procedure shall
be binding on the acquiring cooperative and all its members.

Article 30

Scrutiny of legality of merger

The legality of a merger shall be scrutinised, as regards
1.
the part of the procedure concerning the completion of the
merger and the formation of the SCE, by the court, notary or
other competent authority in the Member State of the proposed
registered office of the SCE able to scrutinise that aspect of the
legality of mergers of cooperatives and, failing that, mergers of
public limited-liability companies.

To that end, each merging cooperative shall submit to the
2.
competent authority the certificate referred to in Article 29(2)
within six months of its issue together with a copy of the draft
terms of merger approved by that cooperative.

3.
The authority referred to in paragraph 1 shall in particu-
lar ensure that the merging cooperatives have approved draft
terms of merger in the same terms and that arrangements for
employee involvement have been determined pursuant
to
Directive 2003/72/EC.

4.
The said authority shall also satisfy itself that the SCE has
been formed in accordance with the requirements of the law
of the Member State in which it has its registered office.

The legality of a merger shall be scrutinised, as regards the
1.
part of the procedure concerning each merging cooperative, in
accordance with the law of the Member State to which the
merging cooperative is subject
that apply to mergers of
cooperatives and, failing that, the provisions applicable to
internal mergers of public limited companies under the law of
that State.

Article 31

Registration of merger

In each Member State concerned the court, notary or
2.
other competent authority shall issue a certificate attesting to
the completion of the pre-merger acts and formalities.

A merger and the simultaneous formation of an SCE
1.
shall take effect on the date on which the SCE is registered in
accordance with Article 11(1).

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The SCE may not be registered until all the formalities

2.
provided for in Articles 29 and 30 have been completed.

The first subparagraph shall not apply to the right of workers’
representatives to participate in general or section or sectorial
meetings provided for in Article 59(4).

Article 32

Publication

For each of the merging cooperatives the completion of the
merger shall be made public as laid down by the law of the
Member State concerned in accordance with the laws govern-
ing mergers of public companies limited by shares.

Article 33

Consequences of merger

A merger carried out as laid down in the first indent of
1.
the first subparagraph of Article 19 shall have the following
consequences ipso jure and simultaneously:

(a)

(b)

all the assets and liabilities of each cooperative being
acquired are transferred to the acquiring legal person;

the members of each cooperative being acquired become
members of the acquiring legal person;

(c)

the cooperatives being acquired cease to exist;

5. When the merger has been registered, the SCE shall
immediately inform the members of the cooperative being
acquired of the fact that they have been entered in the register
of members and of the number of their shares.

Article 34

Legality of the merger

1.
A merger as provided for in the fourth indent of
Article 2(1) may not be declared null and void once the SCE
has been registered.

2.
The absence of scrutiny of the legality of the merger
pursuant to Articles 29 and 30 shall constitute one of the
grounds for the winding-up of the SCE, in accordance with the
provisions of Article 74.

S e c t i o n 3

(d)

the acquiring legal person assumes the form of an SCE.

i n t o a n S C E

C o n v e r s i o n o f

a n e x i s t i n g c o o p e r a t i v e

2.
A merger carried out as laid down in the second indent
of the first subparagraph of Article 19 shall have the following
consequences ipso jure and simultaneously:

(a)

(b)

all the assets and liabilities of the merging cooperatives
are transferred to the SCE;

the members of the merging cooperatives become mem-
bers of the SCE;

(c)

the merging cooperatives cease to exist.

3. Where, in the case of a merger of cooperatives, the law
of a Member State requires the completion of any special
formalities before the transfer of certain assets, rights and
obligations by the merging cooperatives becomes effective
against third parties, those formalities shall apply and shall be
carried out either by the merging cooperatives or by the SCE
following its registration.

4.
The rights and obligations of the participating cooperat-
ives in relation to both individual and collective terms and
conditions of employment arising from national law, practice
and individual employment contracts or employment relation-
ships and existing at the date of the registration shall, by
reason of such registration be transferred to the SCE.

Article 35

Procedures for formation by conversion

1. Without prejudice to Article 11, the conversion of a
cooperative into an SCE shall not result in the winding-up of
the cooperative or in the creation of a new legal person.

The registered office may not be transferred from one
2.
Member State to another pursuant to Article 7 at the same
time as the conversion is effected.

The administrative or management organ of the cooper-
3.
ative in question shall draw up draft terms of conversion and
a report explaining and justifying the legal and economic
aspects as well as the employment effects of the conversion
and indicating the implications for members and employees
of the adoption of the form of an SCE.

4.
The draft terms of conversion shall be made public in
the manner laid down in each Member State’s law at least one
month before the general meeting called upon to decide
thereon.

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5.
Before the general meeting referred to in paragraph 6,
one or more independent experts appointed or approved, in
accordance with the national provisions, by a judicial or
administrative authority in the Member State to which the
cooperative being converted into an SCE is subject shall certify
mutatis mutandis that the rules of Article 22(1)(b) are respected.

6.
The general meeting of the cooperative in question shall
approve the draft terms of conversion together with the
statutes of the SCE.

7. Member States may make a conversion conditional on a
favourable vote of a qualified majority or unanimity in the
controlling organ of the cooperative to be converted within
which employee participation is organised.

8.
The rights and obligations of the cooperative to be
converted on both individual and collective terms and con-
ditions of employment arising from national law, practice and
individual employment contracts or employment relationships
and existing at the date of the registration shall, by reason of
such registration, be transferred to the SCE.

CHAPTER III

STRUCTURE OF THE SCE

Article 36

Structure of organs

Under the conditions laid down by this Regulation an SCE
shall comprise:

(a)

a general meeting; and

(b)

either a supervisory organ and a management organ
(two-tier system) or an administrative organ (one-tier
system) depending on the form adopted in the statutes.

S e c t i o n 1

T w o - t i e r s y s t e m

Article 37

Functions of the management organ;
appointment of members

The member or members of the management organ shall

2.
be appointed and removed by the supervisory organ.

However, a Member State may require or permit the statutes
to provide that the member or members of the management
organ are appointed and removed by the general meeting
under the same conditions as for cooperatives that have
registered offices within its territory.

3.
No person may at the same time be a member of the
management organ and of the supervisory organ of an SCE.
The supervisory organ may, however, nominate one of its
members to exercise the function of member of the manage-
ment organ in the event of a vacancy. During such period, the
functions of the person concerned as member of the supervis-
ory organ shall be suspended. A Member State may impose a
time limit on such a period.

The number of members of the management organ or
4.
the rules for determining it shall be laid down in the SCE’s
statutes. However, a Member State may fix a minimum and/or
maximum number.

5. Where no provision is made for a two-tier system in
relation to cooperatives with registered offices within its
territory, a Member State may adopt the appropriate measures
in relation to SCEs.

Article 38

Chairmanship and the calling of meetings
of the management organ

The management organ shall elect a chairman from

1.
among its members, in accordance with the statutes.

2.
The chairman shall call a meeting of the management
organ under the conditions laid down in the statutes, either on
his own initiative or at the request of any member. Any such
request shall indicate the reasons for calling the meeting. If no
action has been taken in respect of such a request within
15 days, the meeting of the management organ may be called
by the member(s) who made the request.

Article 39

Functions of the supervisory organ;
appointment of members

1.
The management organ shall be responsible for manag-
ing the SCE and shall represent it in dealings with third parties
and in legal proceedings. A Member State may provide that a
managing director is responsible for the current management
under the same conditions as for cooperatives that have
registered offices within that Member State’s territory.

1.
The supervisory organ shall supervise the duties perfor-
med by the management organ. It may not itself exercise the
power to manage the SCE. The supervisory organ may not
represent
It shall
the SCE in dealings with third parties.
represent the SCE in dealings with the management organ, or
its members,
in respect of litigation or the conclusion of
contracts.

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2.
The members of the supervisory organ shall be appointed
and removed by the general meeting. The members of the first
supervisory organ may, however, be appointed in the statutes.
This shall apply without prejudice to any employee partici-
pation arrangements determined pursuant to Directive 2003/
72/EC.

3.
Of the members of the supervisory organ, not more than
one quarter of the posts available may be filled by non-user
members.

4.
The statutes shall lay down the number of members of
the supervisory organ or the rules for determining it. A
Member State may, however, stipulate the number of members
or the composition of the supervisory organ for SCEs having
their registered office in its territory or a minimum and/or a
maximum number.

Article 40

Right to information

1.
The management organ shall report to the supervisory
organ at least once every three months on the progress and
foreseeable developments of the SCE’s business, taking account
of any information relating to undertakings controlled by the
SCE that may significantly affect the progress of the SCE’s
business.

In addition to the regular information referred to in
2.
paragraph 1, the management organ shall promptly communi-
cate to the supervisory organ any information on events likely
to have an appreciable effect on the SCE.

3.
The supervisory organ may require the management
organ to provide information of any kind, which it needs to
exercise supervision in accordance with Article 39(1). A
Member State may provide that each member of the supervis-
ory organ also be entitled to this facility.

The supervisory organ may undertake or arrange for any

4.
investigations necessary for the performance of its duties.

Each member of the supervisory organ shall be entitled

5.
to examine all information submitted to it.

2.
The chairman shall call a meeting of the supervisory
organ under the conditions laid down in the statutes, either on
his/her own initiative, or at the request of at least one third of
its members, or at the request of the management organ. The
request shall indicate the reasons for calling the meeting. If no
action has been taken in respect of such a request within
15 days, the meeting of the supervisory organ may be called
by those who made the request.

S e c t i o n 2

T h e o n e - t i e r s y s t e m

Article 42

Functions of the administrative organ; appointment of
members

The administrative organ shall manage the SCE and
1.
shall represent it in dealings with third parties and in legal
proceedings. A Member State may provide that a managing
director shall be responsible for the current management
under the same conditions as for cooperatives that have
registered offices within that Member State’s territory.

2.
The number of members of the administrative organ or
the rules for determining it shall be laid down in the statutes
of the SCE. However, a Member State may set a minimum and,
where necessary, a maximum number of members. Of the
members of the administrative organ, not more than one
quarter of the posts available may be filled by non-user
members.

The administrative organ shall, however, consist of at least
three members where employee participation is regulated in
accordance with Directive 2003/72/EC.

3.
The members of the administrative organ, and, where
the statutes so provide, their alternate members, shall be
appointed by the general meeting. The members of the first
administrative organ may, however, be appointed by the
statutes. This shall apply without prejudice to any employee
participation arrangements determined pursuant to Directive
2003/72/EC.

4. Where no provision is made for a one-tier system in
relation to cooperatives with registered offices within its
territory, a Member State may adopt the appropriate measures
in relation to SCEs.

Article 41

Article 43

Chairmanship and the calling of meetings
of the supervisory organ

1.
The supervisory organ shall elect a chairman from
among its members. If half of the members are appointed by
employees, only a member appointed by the general meeting
may be elected chairman.

Intervals between meetings and the right to information

1.
The administrative organ shall meet at least once every
three months, at intervals laid down in the statutes, to discuss
the progress of and foreseeable development of the SCE’s
business, taking account, where appropriate, of any infor-
mation relating to undertakings controlled by the SCE that
may significantly affect the progress of the SCE’s business.

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2.
Each member of the administrative organ shall be entitled
to examine all reports, documents and information submitted
to it.

— is disqualified, under the law of the Member State in
which the SCE’s registered office is situated, from serving
on the corresponding organ of a cooperative governed
by the law of that State, or

Article 44

Chairmanship and the calling of meetings
of the administrative organ

1.
The administrative organ shall elect a chairman from
among its members. If half of the members are appointed by
employees, only a member appointed by the general meeting
may be elected chairman.

The chairman shall call a meeting of the administrative
2.
organ under the conditions laid down in the statutes, either on
his/her own initiative or at the request of at least one third of
its members. The request must indicate the reasons for calling
the meeting. If no action has been taken in respect of such a
request within 15 days, the meeting of the administrative
organ may be called by those who made the request.

S e c t i o n 3

R u l e s c o m m o n t o t h e o n e - t i e r a n d t w o -
t i e r s y s t e m s

Article 45

Term of office

1. Members of SCE organs shall be appointed for a period
laid down in the statutes not exceeding six years.

2.
Subject to any restrictions laid down in the statutes,
members may be re-appointed once or more than once for the
period determined in accordance with paragraph 1.

Article 46

Conditions of membership

1.
An SCE’s statutes may permit a company within the
meaning of Article 48 of the Treaty to be a member of one of
its organs, provided that the law applicable to cooperatives in
the Member State in which the SCE’s registered office is
situated does not provide otherwise.

That company shall designate a natural person as its represen-
tative to exercise its functions on the organ in question. The
representative shall be subject to the same conditions and
obligations as if he/she were personally a member of the
organ.

No person may be a member of any SCE organ or a
2.
representative of a member within the meaning of paragraph 1
who:

— is disqualified from serving on the corresponding organ
of a cooperative governed by the law of a Member State
owing to a judicial or administrative decision delivered in
a Member State.

An SCE’s statutes may,

in accordance with the law
3.
applicable to cooperatives in the Member State, lay down
special conditions of eligibility for members representing the
administrative organ.

Article 47

Power of representation and liability of the SCE

1. Where the authority to represent the SCE in dealings
with third parties, in accordance with Articles 37(1) and 42(1),
is conferred on two or more members, those members shall
exercise that authority collectively, unless the law of the
Member State in which the SCE’s registered office is situated
allows the statutes to provide otherwise, in which case such a
clause may be relied upon against third parties where it has
been disclosed in accordance with Articles 11(5) and 12.

Acts performed by an SCE’s organs shall bind the SCE
2.
vis-à-vis third parties, even where the acts in question are not
in accordance with the objects of the SCE, providing they do
not exceed the powers conferred on them by the law of the
Member State in which the SCE has its registered office or
which that law allows to be conferred on them.

Member States may, however, provide that the SCE shall not
be bound where such acts are outside the objects of the SCE, if
it proves that the third party knew that the act was outside
those objects or could not in the circumstances have been
unaware of it; disclosure of the statutes shall not of itself be
sufficient proof thereof.

3.
The limits on the powers of the organs of the SCE,
arising under the statutes or from a decision of the competent
organs, may never be relied on as against third parties, even if
they have been disclosed.

the power

A Member State may stipulate that

to
4.
represent the SCE may be conferred by the statutes on a single
person or on several persons acting jointly. Such legislation
may stipulate that this provision of the statutes may be relied
on as against third parties provided that it concerns the general
power of representation. Whether or not such a provision may
be relied on as against third parties shall be governed by the
provisions of Article 12.

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Article 48

Operations requiring authorisation

An SCE’s statutes shall list the categories of transactions

1.
requiring:

— under the two-tier system, authorisation from the super-
visory organ or the general meeting to the management
organ,

— under the one-tier system, an express decision adopted
by the administrative organ or authorisation from the
general meeting.

2.

Paragraph 1 shall apply without prejudice to Article 47.

3.
However, a Member State may determine the minimum
categories of transactions and the organ which shall give the
authorisation which must feature in the statutes of SCEs
registered in its territory and/or provide that, under the two-
tier system, the supervisory organ may itself determine which
categories of transactions are to be subject to authorisation.

2. Where there is no relevant provision in the statutes, the
chairman of each organ shall have a casting vote in the event
of a tie. There shall be no provision to the contrary in the
statutes, however, where half of the supervisory organ consists
of employees’ representatives.

3. Where employee participation is provided for in accord-
ance with Directive 2003/72/EC, a Member State may provide
that the supervisory organ’s quorum and decision-making
shall, by way of derogation from the provisions referred to in
paragraphs 1 and 2, be subject to the rules applicable, under
the same conditions, to cooperatives governed by the law of
the Member State concerned.

Article 51

Civil liability

Members of management, supervisory and administrative
organs shall be liable,
in accordance with the provisions
applicable to cooperatives in the Member State in which the
SCE’s registered office is situated, for loss or damage sustained
by the SCE following any breach on their part of the legal,
statutory or other obligations inherent in their duties.

Article 49

Confidentiality

The members of an SCE’s organs shall be under a duty, even
after they have ceased to hold office, not to divulge any
information which they have concerning the SCE the disclosure
of which might be prejudicial to the cooperative’s interests or
those of its members, except where such disclosure is required
or permitted under national
law provisions applicable to
cooperatives or companies or is in the public interest.

Article 50

Conduct of the business of organs

1.
Unless otherwise provided by this Regulation or the
statutes, the internal rules relating to quorums and decision-
taking in SCE organs shall be as follows:

(a)

(b)

quorum: at least half of the members with voting rights
must be present or represented;

decision-taking: a majority of the members with voting
rights present or represented.

S e c t i o n 4

G e n e r a l m e e t i n g

Article 52

Competence

The general meeting shall decide on matters for which it is
given sole responsibility by:

(a)

this Regulation; or

(b)

the legislation of the Member State in which the SCE’s
registered office is situated, adopted under Directive
2003/72/EC.

Furthermore, the general meeting shall decide on matters for
which responsibility is given to the general meeting of a
cooperative governed by the law of the Member State in which
the SCE’s registered office is situated, either by the law of that
Member State or by the SCE’s statutes in accordance with that
law.

Article 53

Conduct of general meetings

Members who are absent may take part in decisions by
authorising another member of the organ or the alternate
members who were appointed at the same time to represent
them.

Without prejudice to the rules laid down in this section, the
organisation and conduct of general meetings together with
voting procedures shall be governed by the law applicable to
cooperatives in the Member State in which the SCE’s registered
office is situated.

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Article 54

— the agenda, indicating the subjects to be discussed and

the proposals for decisions.

Holding of general meetings

1.
An SCE shall hold a general meeting at least once each
calendar year, within six months of the end of its financial
year, unless the law of the Member State in which the SCE’s
registered office is situated applicable to cooperatives carrying
on the same type of activity as the SCE provides for more
frequent meetings. A Member State may, however, provide
that the first general meeting may be held at any time in the
18 months following an SCE’s incorporation.

General meetings may be convened at any time by
2.
the
the management organ or the administrative organ,
supervisory organ or any other organ or competent authority
in accordance with the national law applicable to cooperatives
in the Member State in which the SCE’s registered office is
situated. The management organ shall be bound to convene a
general meeting at the request of the supervisory organ.

3.
The agenda for the general meeting held after the end of
the financial year shall include at least the approval of the
annual accounts and the allocation of profits.

4.
The general meeting may in the course of a meeting
decide that a further meeting be convened and set the date and
the agenda.

3.
The period between the date of dispatch of the notice
referred to in paragraph 1 and the date of the opening of the
general meeting shall be at least 30 days. It may, however, be
reduced to 15 days in urgent cases. Where Article 61(4) is
applied, relating to quorum requirements, the time between a
first and second meeting convened to consider the same
agenda may be reduced according to the law of the Member
State in which the SCE has its registered office.

Article 57

Additions to the agenda

Members of the SCE who together number more than 5 000,
or who have at least 10 % of the total number of the votes,
may require that one or more additional items be put on the
agenda of any general meeting. The above proportions may be
reduced by the statutes.

Article 58

Attendance and proxies

Article 55

1.
Every member shall be entitled to speak and vote at
general meetings on the points that are included in the agenda.

Meeting called by a minority of members

Members of the SCE who together number more than 5 000,
or who have at least 10 % of the total number of the votes,
may require the SCE to convene a general meeting and may
draw up its agenda. The above proportions may be reduced by
the statutes.

Article 56

Notice of meeting

1.
A general meeting shall be convened by a notice in
writing sent by any available means to every person entitled to
attend the SCE’s general meeting in accordance with
Article 58(1) and (2) and the provisions of the statutes. That
notice may be given by publication in the official
internal
publication of the SCE.

The notice calling a general meeting shall give at least

2.
the following particulars:

— the name and registered office of the SCE,

— the venue, date and time of the meeting,

— where appropriate, the type of general meeting,

2. Members of the SCE’s organs and holders of securities
other than shares and debentures within the meaning of
Article 64 and, if the statutes allow, any other person entitled
to do so under the law of the State in which the SCE’s
registered office is situated may attend a general meeting
without voting rights.

A person entitled to vote shall be entitled to appoint a
3.
proxy to represent him/her at a general meeting in accordance
with procedures laid down in the statutes.

The statutes shall lay down the maximum number of persons
for whom a proxy may act.

The statutes may permit postal voting or electronic
lay down the necessary

in which case they shall

4.
voting,
procedures.

Article 59

Voting rights

Each member of an SCE shall have one vote, regardless

1.
of the number of shares he holds.

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2.
If the law of the Member State in which the SCE has its
registered office so permits, the statutes may provide for a
member to have a number of votes determined by his/her
participation in the cooperative activity other than by way of
capital contribution. This attribution shall not exceed five
votes per member or 30 % of total voting rights, whichever is
the lower.

If the law of the Member State in which the SCE has its
registered office so permits, SCEs involved in financial or
insurance activities may provide in their statutes for the
number of votes to be determined by the members’ partici-
pation in the cooperative activity including participation in the
capital of the SCE. This attribution shall not exceed five votes
per member or 20 % of total voting rights, whichever is the
lower.

In SCEs the majority of members of which are cooperatives, if
the law of the Member State in which the SCE has its registered
office so permits, the statutes may provide for the number of
votes to be determined in accordance with the members’
participation in the cooperative activity including participation
in the capital of the SCE and/or by the number of members of
each comprising entity.

3.
A member refused information may require that his/her
question and the grounds for refusal be entered in the minutes
of the general meeting.

4. Within the 10 days preceding the general meeting
required to decide on the end of the financial year, members
may examine the balance sheet, the profit-and-loss account
and the notes thereon, the management report, the conclusion
of the audit of the accounts by the person responsible and,
where a parent company within the meaning of Directive 83/
349/EEC is concerned, the consolidated accounts.

Article 61

Decisions

3.
As regards voting rights which the statutes may allocate
to non-user (investor) members, the SCE shall be governed by
the law of the Member State in which the SCE has its registered
office. Nevertheless, non-user (investor) members may not
together have voting rights amounting to more than 25 % of
total voting rights.

1.
A general meeting may pass resolutions on items on its
agenda. A general meeting may also deliberate and pass
resolutions concerning items placed on the agenda of the
meeting by a minority of members in accordance with
Article 57.

If, on the entry into force of this Regulation, the law of
4.
the Member State where an SCE has its registered office so
permits, the statutes of that SCE may provide for the partici-
pation of employees’ representatives in the general meetings
or in the section or sectorial meetings, provided that the
employees’ representatives do not together control more than
15 % of total voting rights. Such rights shall cease to apply as
soon as the registered office of the SCE is transferred to
a Member State whose law does not provide for such
participation.

Article 60

Right to information

1.
Every member who so requests at a general meeting shall
be entitled to obtain information from the management or
administrative organ on the affairs of the SCE arising from
items on which the general meeting may take a decision in
accordance with Article 61(1). In so far as possible, information
shall be provided at the general meeting in question.

The management or administrative organ may refuse to

2.
supply such information only where:

— it would be likely to be seriously prejudicial to the SCE,

— its disclosure would be incompatible with a legal obli-

gation of confidentiality.

A general meeting shall act by majority of the votes

2.
validly cast by the members present or represented.

The statutes shall lay down the quorum and majority

3.
requirements which are to apply to general meetings.

Where the statutes provide for the possibility of an SCE to
admit
investor (non-user) members, or to allocate votes
according to capital contribution in SCEs involved in financial
or insurance activities, the statutes shall also lay down special
quorum requirements with relation to members other than
investor (non-user) members or members that have voting
rights according to capital contribution in SCEs involved in
financial or insurance activities. Member States shall be free to
set the minimum level of such special quorum requirements
for those SCEs having their registered office in their territory.

4.
A general meeting may amend the statutes the first time
it is convened only if the members present or represented
make up at least half of the total number of members on the
date the general meeting is convened, and the second time it is
convened on the same agenda no quorum shall be necessary.

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In the cases referred to in the first subparagraph, at least two
thirds of the votes cast validly must be cast in favour, unless
the law applicable to cooperatives in the Member State in
which the SCE’s registered office is situated requires a greater
majority.

CHAPTER IV

ISSUE OF SHARES CONFERRING SPECIAL ADVANTAGE

Article 62

Minutes

1. Minutes shall be drawn up for every general meeting.
The minutes shall include at least the following particulars:

— the venue and date of the meeting,

— the resolutions passed,

— the result of the voting.

Article 64

Securities other than shares and debentures conferring
special advantages

1.
An SCE’s statutes may provide for the issue of securities
other than shares, or debentures the holders of which are to
have no voting rights. These may be subscribed for by
members or by non-members. Their acquisition does not
confer the status of member. The statutes shall also lay down
the procedure for redemption.

Holders of securities or debentures referred to in para-
2.
graph 1 may be given special advantages in accordance with
the statutes or the conditions laid down when they are issued.

The attendance list,

2.
the documents relating to the
convening of the general meeting and the reports submitted to
the members on the items on the agenda shall be annexed to
the minutes.

The total nominal value of securities or debentures
3.
referred to in paragraph 1 held may not exceed the figure laid
down in the statutes.

3.
The minutes and the documents annexed thereto shall
be preserved for at least five years. A copy of the minutes and
the documents annexed thereto may be obtained by any
member upon request against defrayal of the administrative
cost.

The minutes shall be signed by the chairman of the

4.
meeting.

Article 63

Sectorial or section meetings

1. Where the SCE undertakes different activities or activities
in more than one territorial unit, or has several establishments
its statutes may provide for
or more than 500 members,
sectorial or section meetings,
if permitted by the relevant
Member State legislation. The statutes shall establish the
division in sectors or sections and the number of delegates
thereof.

4. Without prejudice to the right to attend the general
meeting provided for in Article 58(2), the statutes may provide
for special meetings of holders of securities or debentures
referred to in paragraph 1. Before any decision of the general
meeting is taken relating to the rights and interests of such
holders, a special meeting may state its opinion, which shall
be brought to the attention of the general meeting by the
representatives which the special meeting appoints.

The opinion referred to in the first subparagraph shall be
recorded in the minutes of the general meeting.

CHAPTER V

ALLOCATION OF PROFITS

Article 65

Legal reserve

The sectorial or section meetings shall elect their del-
2.
egates for a maximum period of four years, unless early
revocation takes place. Delegates so elected shall constitute the
general meeting of the SCE and shall represent therein their
sector or section to which they shall report on the outcome of
the general meeting. The provisions of Section 4 of Chapter III
shall be applied to the workings of the sectorial and section
meetings.

1. Without prejudice to mandatory provisions of national
laws, the statutes shall lay down rules for the allocation of the
surplus for each financial year.

2. Where there is such a surplus, the statutes shall require
the establishment of a legal reserve funded out of the surplus
before any other allocation.

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Until such time as the legal reserve is equal to the capital
referred to in Article 3(2), the amount allocated to it may not
be less than 15 % of the surplus for the financial year after
deduction of any losses carried over.

the Member State in which it has its registered office in
implementation of Directives 78/660/EEC and 83/349/EEC.
However, Member States may provide for amendments to the
national provisions implementing those Directives to take
account of the specific features of cooperatives.

3. Members leaving the SCE shall have no claim against the
sums thus allocated to the legal reserve.

Article 66

Dividend

The statutes may provide for the payment of a dividend to
members in proportion to their business with the SCE, or the
services they have performed for it.

Article 67

Allocation of available surplus

The balance of

the surplus after deduction of

1.
the
allocation to the legal reserve, of any sums paid out in
dividends and of any losses carried over, with the addition of
any surpluses carried over and of any sums drawn from the
reserves, shall constitute the profits available for distribution.

2.
The general meeting which considers the accounts for
the financial year may allocate the surplus in the order and
proportions laid down in the statutes, and in particular:

— carry them forward,

— appropriate them to any legal or statutory reserve fund,

— provide a return on paid-up capital and quasi-equity,

payment being made in cash or shares.

3.

The statutes may also prohibit any distribution.

CHAPTER VI

ANNUAL ACCOUNTS AND CONSOLIDATED ACCOUNTS

Article 68

2. Where an SCE is not subject, under the law of the
Member State in which the SCE has its registered office, to a
publication requirement such as provided for in Article 3 of
Directive 68/151/EEC,
least make the
documents relating to annual accounts available to the public
at its registered office. Copies of those documents must be
obtainable on request. The price charged for such copies shall
not exceed their administrative cost.

the SCE must at

3.
An SCE must draw up its annual accounts and its
consolidated accounts if any in the national currency. An SCE
whose registered office is outside the euro area may also
express its annual accounts and, where appropriate, consoli-
dated accounts, in euro. In that event, the bases of conversion
used to express in euro those items included in the accounts
which are or were originally expressed in another currency
shall be disclosed in the notes on the accounts.

Article 69

Accounts of SCEs with credit or financial activities

An SCE which is a credit or financial institution shall be
1.
governed by the rules laid down in the national law of the
Member State in which its registered office is situated under
directives relating to the taking up and pursuit of the business
of credit institutions as regards the preparation of its annual
and, where appropriate, consolidated accounts, including the
accompanying annual report and the auditing and publication
of those accounts.

2.
An SCE which is an insurance undertaking shall be
governed by the rules laid down in the national law of the
Member State in which its registered office is situated under
directives as regards the preparation of its annual and, where
the
appropriate,
accompanying annual report and the auditing and publication
of those accounts.

consolidated

including

accounts

Article 70

Auditing

Preparation of annual accounts and consolidated accounts

1.
For the purposes of drawing up its annual accounts and
its consolidated accounts if any, including the annual report
accompanying them and their auditing and publication, an
to the legal provisions adopted in
SCE shall be subject

The statutory audit of an SCE’s annual accounts and its
consolidated accounts if any shall be carried out by one or
more persons authorised to do so in the Member State in
which the SCE has its registered office in accordance with the
measures adopted in that State pursuant to Directives 84/253/
EEC and 89/48/EEC.

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Article 71

System of auditing

3.
The Member State in which the SCE’s registered office is
situated shall put in place the measures necessary to ensure
that an SCE which fails to regularise its position in accordance
with paragraph 2 is liquidated.

Where the law of a Member State requires all cooperatives, or
a certain type of them, covered by the law of that State to join
a legally authorised external body and to submit to a specific
system of auditing carried out by that body, the arrangements
shall automatically apply to an SCE with its registered office
in that Member State provided that this body meets the
requirements of Directive 84/253/EEC.

CHAPTER VII

WINDING UP; LIQUIDATION; INSOLVENCY
AND CESSATION OF PAYMENTS

Article 72

Winding-up, insolvency and similar procedures

As regards winding-up, liquidation, insolvency, cessation of
payments and similar procedures, an SCE shall be governed by
the legal provisions which would apply to a cooperative
formed in accordance with the law of the Member State in
including provisions
which its registered office is situated,
relating to decision-making by the general meeting.

Article 73

Winding-up by the court or other competent authority of
the Member State where the SCE has its registered office

1.
On an application by any person with a legitimate
interest or any competent authority, the court or any com-
petent administrative authority of the Member State where the
SCE has its registered office shall order the SCE to be wound
up where it finds that there has been a breach of Article 2(1)
and/or Article 3(2) and in the cases covered by Article 34.

The court or the competent administrative authority may
allow the SCE time to rectify the situation. If it fails to do
so within the time allowed,
the court or the competent
administrative authority shall order it to be wound up.

2. When an SCE no longer complies with the requirement
laid down in Article 6, the Member State in which the SCE’s
registered office is situated shall take appropriate measures to
oblige the SCE to regularise its situation within a specified
period either:

— by re-establishing its head office in the Member State in

which its registered office is situated, or

— by transferring the registered office by means of the

procedure laid down in Article 7.

The Member State in which the SCE’s registered office is
4.
situated shall seek judicial or other appropriate remedy with
regard to any established infringement of Article 6. That
remedy shall have suspensory effect on the procedures laid
down in paragraphs 2 and 3.

5. Where it is established on the initiative of either the
authorities or any interested party that an SCE has its head
office within the territory of a Member State in breach of
Article 6, the authorities of that Member State shall immedi-
ately inform the Member State in which the SCE’s registered
office is situated.

Article 74

Publication of winding-up

Without prejudice to provisions of national
law requiring
additional publication, the initiation and termination of wind-
ing-up including voluntary winding-up, liquidation, insolvency
or suspension of payment procedures and any decision to
continue operating shall be publicised in accordance with
Article 12.

Article 75

Distribution

Net assets shall be distributed in accordance with the principle
of disinterested distribution, or, where permitted by the law of
the Member State in which the SCE has its registered office, in
accordance with an alternative arrangement set out in the
statutes of the SCE. For the purposes of this Article, net assets
shall comprise residual assets after payment of all amounts
due to creditors and reimbursement of members’ capital
contributions.

Article 76

Conversion into a cooperative

1.
An SCE may be converted into a cooperative governed
by the law of the Member State in which its registered office is
situated. No decision on conversion may be taken before two
years have elapsed since its registration or before the first two
sets of annual accounts have been approved.

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The conversion of an SCE into a cooperative shall not

2.
result in winding-up or in the creation of a new legal person.

3.
The management or administrative organ of the SCE
shall draw up draft terms of conversion and a report explaining
and justifying the legal and economic aspects as well as the
employment effects of the conversion and indicating the
implications of the adoption of the cooperative form for
members and holders of shares referred to in Article 14 and
for employees.

4.
The draft terms of conversion shall be made public in
the manner laid down in each Member State’s law at least
one month before the general meeting called to decide on
conversion.

5.
Before the general meeting referred to in paragraph 6,
one or more independent experts appointed or approved, in
accordance with the national provisions, by a judicial or
administrative authority in the Member State to which the SCE
being converted into a cooperative is subject, shall certify that
the latter has assets at least equivalent to its capital.

The general meeting of

6.
the SCE shall approve the
draft terms of conversion together with the statutes of the
cooperative. The decision of the general meeting shall be
passed as laid down in the provisions of national law.

CHAPTER VIII

ADDITIONAL AND TRANSITIONAL PROVISIONS

Article 77

Economic and monetary union

1.
If and so long as the third phase of EMU does not apply
to it, each Member State may make SCEs with registered offices
within its territory subject to the same provisions as apply to
cooperatives or public limited-liability companies covered by
its legislation as regards the expression of their capital. An SCE
may, in any case, express its capital in euro as well. In that
event the national currency/euro conversion rate shall be that
for the last day of the month preceding that of the formation
of the SCE.

2.
If and so long as the third phase of EMU does not apply
to the Member State in which an SCE has its registered office,
the SCE may, however, prepare and publish its annual and,
where appropriate, consolidated accounts in euro. The Member
State may require that the SCE’s annual and, where appropriate,
consolidated accounts be prepared and published in the
national currency under the same conditions as those laid
down for cooperatives and public limited-liability companies
governed by the law of that Member State. This shall not
prejudge the additional possibility for an SCE of publishing its
annual and, where appropriate, consolidated accounts in
euro in accordance with Council Directive 90/604/EEC of
8 November 1990 amending Directive 78/660/EEC on annual
accounts and Directive 83/349/EEC on consolidated accounts
as concerns the exemptions for small and medium-sized
companies and the publication of accounts in ecu (1).

CHAPTER IX

FINAL PROVISIONS

Article 78

National implementing rules

1. Member States shall make such provision as is appropri-
ate to ensure the effective application of this Regulation.

2.
Each Member State shall designate the competent auth-
orities within the meaning of Articles 7, 21, 29, 30, 54 and 73.
It shall inform the Commission and the other Member States
accordingly.

Article 79

Review of the Regulation

Five years at the latest after the entry into force of this
Regulation, the Commission shall forward to the European
Parliament and to the Council a report on the application
of the Regulation and proposals for amendments, where
appropriate. The report shall, in particular, analyse the appro-
priateness of:

(a)

(b)

allowing the location of an SCE’s head office and
registered office in different Member States;

allowing provisions in the statutes of an SCE adopted by
a Member State in execution of authorisations given to
the Member States by this Regulation or laws adopted to
ensure the effective application of this Regulation with
regard to the SCE which deviate from, or are complemen-
tary to, these laws, even when such provisions would not
be authorised in the statutes of a cooperative having its
registered office in the Member State;

(1) OJ L 317, 16.11.1990, p. 57.

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(c)

allowing provisions which enable the SCE to split into
two or more national cooperatives;

Article 80

Entry into force

(d)

allowing for specific legal remedies in the case of fraud or
error during the registration of an SCE established by way
of merger.

This Regulation shall enter into force on the third day
following its publication in the Official Journal of the European
Union.

It shall apply from 18 August 2006.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 22 July 2003.

For the Council

The President

G. ALEMANNO