Proposal for a COUNCIL REGULATION on temporary measures concerning the general meetings of European companies (SE) and of European Cooperative Societies (SCE)
Date: 2020-04-29
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: European company, European cooperative, company law, epidemic, infectious disease, right of establishment

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   EUROPEAN COMMISSION  Brussels, 29.4.2020  COM(2020) 183 final 2020/0073 (APP)  Proposal for a COUNCIL REGULATION on temporary measures concerning the general meetings of European companies (SE) and of European Cooperative Societies (SCE) (Text with EEA relevance)  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

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

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

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

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

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The proposal is based on Article 352 of the Treaty on the Functioning of the European Union 
(TFEU). That provision specifies that if action by the Union should prove necessary, within 
the framework of the policies defined in the Treaties, to attain one of the objectives set out in 

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the  Treaties,  and  the  Treaties  have  not  provided  the  necessary  powers,  the  Council,  acting 
unanimously  on  a  proposal  from  the  Commission  and  after  obtaining  the  consent  of  the 
European  Parliament,  shall  adopt  the  appropriate  measures,  and  it  already  served  as  a  legal 
basis  for  the  adoption  of  Regulation  (EC)  NO  2157/2001  and  of  Regulation  (EC)  No 
1435/2003. 

• 

Subsidiarity 

The objectives of the proposal cannot be sufficiently achieved by the Member States because 
European  Companies  (SEs)  are  regulated  at  Union  level  by  Council  Regulation  (EC)  No 
2157/2001  and  European  Cooperative  Societies  (SCEs)  are  regulated  at  Union  level  by 
Council  Regulation  (EC)  No  1435/2003.  Any  temporary  measures  due  to  the  COVID-19 
crisis departing from these Regulations need to be adopted at Union level. 

• 

Proportionality 

The proposal does not go beyond what is necessary to achieve the objective of alleviating the 
impact of the current COVID-19 outbreak for the holding of general meetings of SEs and of 
SCEs. The proposed measure is therefore proportionate including in respect of its application 
in time.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

This urgent measure is triggered by the sudden and unforeseeable outbreak of the Covid-19 
pandemic. For this reason, no impact assessment or ex-post evaluation has been carried out. 
Several stakeholders have called for a legislative solution on the issue.  

4. 

BUDGETARY IMPLICATIONS 

Not applicable. 

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2020/0073 (APP) 

Proposal for a 

COUNCIL REGULATION 

on temporary measures concerning the general meetings of European companies (SE) 
and of European Cooperative Societies (SCE) 

(Text with EEA relevance) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 352 thereof, 

Having regard to the proposal from the European Commission, 

Having regard to the consent of the European Parliament, 

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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In order to contain the spread of the Coronavirus COVID-19, which on 11 March 2020 
was declared a pandemic by the World Health Organisation, Member States have put 
in  place  a  set  of  unprecedented  measures,  particularly  measures  of  confinement  and 
social distancing of persons.  

Those measures may prevent the companies and cooperative societies from complying 
with  their legal  obligations under national  and Union  company law, in  particular, by 
creating considerable difficulties for them to organise their general meetings. 

At  national  level,  Member  States  have  put  in  place  emergency  measures  supporting 
companies and cooperative societies and providing them with the necessary tools and 
flexibility in the current exceptional circumstances. In particular, many Member States 
have enabled the use of digital tools and processes to hold general meetings and have 
extended the time-limits for the holding of general meetings in 2020. 

At Union level, European companies (SEs) are regulated by Council Regulation (EC) 
No 2157/20011 and European Cooperative Societies (SCEs) are regulated by Council 
Regulation (EC) No 1435/20032. Both Regulations require in their respective Articles 
54 that a  general meeting is held  within six months of the  end of the financial  year. 
Having regard to  the current  exceptional  circumstances  a temporary derogation from 
that requirement should  be granted.  Given that the holding of  general  meetings is  of 
essential  importance  to  ensure  that  legally  required  or  economically  necessary 

Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European company (SE) 
(OJ L 294, 10.11.2001, p. 1). 
Council  Regulation  (EC)  No  1435/2003  of  22  July  2003  on  the  Statute  for  a  European  Cooperative 
Society (SCE) (OJ L 207, 18.8.2003, p. 1). 

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decisions  are  taken  in  due  time,  the  SEs  and  SCEs  should  be  allowed  to  hold  their 
general meeting within 12 months of the end of the financial  year provided that it is 
held no later than 31 December 2020. Being a temporary measure due to Covid-19, the 
derogation  should  only  be  applicable  to  the  general  meetings  that  are  required  to  be 
held in 2020. 

The  Treaty  on  the  Functioning  of  the  European  Union  does  not  provide,  for  the 
adoption of this Regulation, powers other than those under Article 352. 

Since  the  objectives  of  this  Regulation,  namely  to  provide  a  temporary  emergency 
solution  derogating  from  a  provision  of  Regulation  (EC)  No  2157/2001  and  from  a 
provision  of  Regulation  (EC)  No  1435/2003,  cannot  be  sufficiently  achieved  by  the 
Member States but can rather, by reason of its scale and effects, be better achieved at 
Union  level,  the  Union  may  adopt  measures,  in  accordance  with  the  principle  of 
subsidiarity  as  set  out  in  Article  5  of  the  Treaty  on  European  Union.  In  accordance 
with the principle of proportionality, as set out in that Article, this Regulation does not 
go beyond what is necessary in order to achieve those objectives. 

In view of the fact that the six months period referred to in Articles 54 of Regulations 
(EC)  No  2157/2001  and  (EC)  No  1435/2003,  will  expire  in  May  or  June  2020,  and 
given that convening periods will have to be taken into account, this Regulation should 
enter into force as a matter of urgency.  

In view of that urgency, it is considered to be appropriate to use the exception from the 
eight-week  period  referred  to  in  Article  4  of  Protocol  No  1  on  the  role  of  national 
Parliaments in the European Union, annexed to the Treaty on European Union, to the 
Treaty  on  the  Functioning  of  the  European  Union  and  to  the  Treaty  establishing  the 
European Atomic Energy Community 

(5) 

(6) 

(7) 

(8) 

HAS ADOPTED THIS REGULATION: 

Temporary measure concerning the general meetings of European companies (SE) 

Article 1 

Where,  in  accordance  with  the  first  sentence  of  Article  54(1)  of  Regulation  (EC) 
No 2157/2001,  a  general  meeting  of  an  SE  is  to  be  held  in  2020,  the  SE  may,  by  way  of 
derogation from that provision, hold the meeting within 12 months of the end of the financial 
year, provided that the meeting is held on 31 December 2020 at the latest. 

Temporary measure concerning the general meetings of European Cooperative Societies 
(SCE) 

Article 2 

Where,  in  accordance  with  the  first  sentence  of  Article  54(1)  of  Regulation  (EC)  No 
1435/2003,  a  general  meeting  of  an  SCE  is  to  be  held  in  2020,  the  SCE  may,  by  way  of 
derogation from that provision, hold the meeting within 12 months of the end of the financial 
year, provided that the meeting is held  on 31 December 2020 at the latest. 

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Article 3 

Entry into force 

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

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

Done at Brussels, 

For the Council 
The President 

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