CELEX: 51988PC0153
Language: en
Date: 1988-03-28
Title: Amended Proposal for an ELEVENTH COUNCIL DIRECTIVE on company law concerning disclosure requirements in respect of branches opened in a Member State by certain types of companies governed by the law of another State (submitted by the Commission to the Council on the basis of Article 149(3) of the EEC Treaty)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 153
Vol. 1988/0045
 ---pagebreak--- Disclaimer
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                    COM ( 88 ) 153 final - SYN 63
                                                    Brussels , 28 March 1988
                           Amended Proposal for an
                         ELEVENTH COUNCIL DIRECTIVE
on company law concerning disclosure requirements in respect of branches
   opened in a Member State by certain types of companies governed by
                          the law of another State
       ( submitted by the Commission to the Council on the basis of
                     Article 149(3 ) of the EEC Treaty )
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 ---pagebreak--- I.   Explanatory memorandum
1 . The proposal for an Eleventh Directive based on Article 54 of the EEC Treaty
concerning disclosure requirements in respect of branches was first submitted to
the Council on 29 July 1986 .^
2.   The Economic and Social Committee and the European Parliament delivered their
                               2  _ « 4 A kl _ I  4 An*»3
opinions on 24 September 1987     and 18 November 1987    respectively .
3 . The object of this amended proposal is essentially to take account of those
opinions . The amendments relate to the following aspects :
Particulars concerning the object of the activities of the branch , the existence
of other branches in the same Member State , the dissolution of the company and the
appointment and powers of the liquidators , transfers of the location of the
branch , the equivalence or the compliance with Community accounting directives of
the accounting documents of companies from third countries which open branches in
the Community , disclosure of particulars relating to branches in the register in
which the company is recorded .
4 . In Article 11 , however , the Member States' right not to apply the provisions
of Article 3 and 7 to branches opened by insurance companies has been maintained .
Special rules in regard to accounting are required in respect of that sector and
these will form the subject of a subsequent Commission proposal .
loj No C 203, 12.8.1986, p . 12.
*0.J. C 319, 30.11.1987
  EP 117.884 , 18.11.1987 .
 ---pagebreak---                                          - 3 -
                                   AMENDED PROPOSAL
                for an Eleventh Council Directive based on Article 54
              of the EEC Treaty concerning disclosure requirements in
                     respect of branches opened in a Member State
                 by certain types of companies governed by the law
                                   of another State
II . Text of the proposai
Initial proposai                                 Amended proposai
THE COUNCIL OF THE EUROPEAN                      Unchanged
COMMUNITIES ,
Having regard to the Treaty establishing
the European Economic Community , and in
particular Article 54 thereof ,
Having regard to the proposal from the
Commission ,
In co-operation with the
European Parliament ,
Having regard to the opinion of the
Economic and Social Committee ,
Whereas in order to facilitate the
exercise of the freedom of establishment
in respect of companies covered by
Article 58 of the Treaty , Article 54(3)(g )
and the general programme on the
supression of restrictions on the freedom
of establishment require coordination of
 ---pagebreak---                                            4 -
Initial proposai                               Amended proposa 1
the safeguards required of companies
and firms in the Member States for the
protection of the interests of members
and others ;
Whereas hitherto this coordination has
been effected in respect of disclosure by
the adoption of the First Council
Directive 68/1 51 /EEC , 1 covering limited
liability companies and continued in
the field of accounting by the Fourth
                                2
Council Directive 78/660/EEC      on annual
accounts of certain types of companies ,
the Seventh Council Directive 83/349/EEC3
on consolidated accounts and by the Eighth
                                4
Council Directive 84/ 253/EEC     on the
approval of persons performing the
statutory audits of accounting documents ;
^OJ No L 65 , 14.3.1968 , p. 9 .
pj No L 222 , 14.8.1978 , p. 11 .
30J No L 193 , 18.7.1983 , p. 1 .
*OJ No L 126 , 12.5.1984 , p. 20 .
 ---pagebreak---                                        - 5 -
Initial proposai                                Amended proposai
Whereas these Directives apply to
companies as such but do not cover their
branches ; whereas , the opening of a branch ,
as well as the creation of a subsidiary
company , is one of the possibilities currently
open to companies in exercising their rights
of establishment in another Member State ;
Whereas in respect of branches the lack of
coordination , in particular concerning
disclosure , gives rise to disparity in respect
of protection of shareholders and thier
parties between companies which operate
in other Member States by opening branches
and those which operate by creating
subsidiary companies and it is appropriate
to eliminate such disparities in order to
ensure an equivalent level of protection
for those concerned ;
Whereas in this field the divergence among
the laws of the Member States interferes
with the exercise of the right of
establishment and it is therefore necessary
to eliminate such divergence to guarantee
the exercise of the said right ;
 ---pagebreak---                                          6
Initial proposai                            Amended proposai
Whereas to ensure the protection of         Whereas to ensure the
persons who deal with companies by way      protection of persons who deal
of a branch , measures in respect of        with companies by way of a
disclosure are required in the              branch , measures in respect of
Member State in which the branch is         disclosure are required in the
situated , and to effect such disclosure    Member State in which the
it is necessary to make use of the          branch is situated ;
procedure already instituted for limited    whereas the economic and social
liability companies within the Community ;  influence of a branch may be
                                            comparable to that of a
                                            subsidiary company , so that to
                                            that extent the public interest
                                            in disclosure is comparable ;
                                            whereas to effect such
                                            disclosure it is necessary to
                                            make use of the procedure
                                            already instituted for limited
                                            liability companies within the
                                            Community ;
Whereas the said disclosure with an         Whereas the said disclosure
exception in respect of those having powers with an exception in respect of
or representation may be confined to        those having powers of
information concerning the branch itself    representation and the
together with a reference to the register   winding-up of the company may
of the company of which the branch is       be confined to information
part , given that , pursuant to Community   concerning the branch itself
rules , all information covering the        together with a reference to
company as such is available on that        the register of the company of
register ;                                  which the branch is part , given
                                            that , pursuant to Community
                                            rules , all information covering
                                            the company as such is
                                            available on that register ;
 ---pagebreak---                                       - 7 -
Initial proposai                               Amended proposal
Whereas national provisions in respect         Unchanged
of disclosure of accounting documents
relating to the branch can no longer
be justified following the coordination
of national law in respect of the drawing
up , statutory audit and disclosure of the
accounting documents of the company ;
whereas in consequence it is sufficient
to disclose , on the register of the branch ,
the annual accounts of the company and ,
in default of those , the consolidated
accounts in which the company is included ;
Whereas to avoid any discrimination arising    Unchanged
out of the country of origin of the company ,
the Directive should also cover branches
created by companies governed by the law
of third countries and based on legal forms
comparable with limited liability companies ,
whereas for these branches it is necessary
to apply certain provisions different from
those applying to branches of companies
governed by the law of other Member States
given that the Directives set out above
do not apply to companies of third countries ,
 ---pagebreak---                                        - 8 -
Initial proposai                             Amended proposai
HAS ADOPTED THIS DIRECTIVE :                 Unchanged
                      I                                         I
         Branches of companies from          Unchanged
           other Member States
                Article 1                                 Article 1
Documents and particulars relating to        Unchanged
a branch set up in a Member State by
a company which is subject to the law
of another Member State and to which
Directive 68/1 51 /EEC applies shall be
disclosed according to the law of the
Member State of the branch in compliance
with Article 3 of the said Directive .
               Article 2                                  Article 2
1.  The compulsory disclosure provided       Unchanged
for in Article 1 shall cover the
following documents and particulars :
(a)  the address of the branch ;
                                             ( aa ) the object of the
                                                    activities of the
                                                    branch ;
 ---pagebreak---                                         9 -
Initial proposai                              Amended proposai
(b)  the register in which the company        Unchanged
     file mentioned in Article 3 of
     Directive 68/ 1 51 /EEC is kept ,
     together with the registration
     number in that register ;
                                              ( ba ) the existence of other
                                                     branches in the same
                                                     Member State , together
                                                     with the particulars
                                                     referred to in ( a ) and
                                                     (b) ;
(c)  the name of the branch if that is
     different from the name of the
     company ;
(d)  the appointment , termination of
     office and particulars of the persons
     who , either as a body constituted
     pursuant to law or as members of any
     such body and those who as permanent
     representatives of the company for the
     activities of the branch , are
     authorized to represent the company
     in dealings with third parties and
     in legal proceedings . It must be stated
     whether the persons authorized to
     represent the company may do so alone
     or must act jointly ;
                                              ( da ) the winding-up   of the
                                                     company and the
                                                     appointment of
                                                     liquidators , particulars
                                                     concerning them and their
 ---pagebreak---                                           10
Initial proposal                             Amended proposal
                                             powers in , accordance with
                                             Article 2(1 )( j ) of
                                             Directive 68/ 1 51 /EEC ;
(e)  the accounting documents covered
     by Article 3 ;                          Unchanged
(f)  the closure of the branch .             (f)  the closure of the branch
                                                  and transfers of its
                                                  location .
2 . The Member State of the place of the     Unchanged
branch may require the deposit in the
register of the branch of the certified
signature of the persons referred to in
paragraph 1 ( d ).
          Article 3                                       Article 3
1 . The compulsory disclosure of               1.  Unchanged
accounting documents provided for by
Article 2 ( 1 ) ( e ) shall be limited to
the annual accounts and annual report of
the company . These documents must have been
drawn up and audited in accordance with the
law of the Member State by which the company
is governed in compliance with
Directives 78/660 /EEC and 84/253/EEC .
 ---pagebreak---                                           11
Initial proposai                                     Amended proposal
2 . Paragraph 1 shall not apply where ,           2. Unchanged
pursuant to Article 57 of Directive
78/660 /EEC , the provisions thereof
concerning the content , auditing and
publication of the annual accounts do
not apply to a company which is a
subsidiary company within the meaning of
Directive 83 /349/EEC .  In this event the
compulsory disclosure provided for in
Article 1 shall cover the consolidated
accounts and the consolidated annual report
of the parent undertaking of the company .
Those documents must have been drawn up and
audited in accordance with the law of the
Member State by which the parent undertaking
is governed in compliance with Council
Directives 83 / 349/EEC and 84/ 253/EEC .
3.   The Member State in which the branch was
created may stipulate that the documents and
particulars referred to in paragraph 1 and 2
must be published in its official language
and that their translation must be certified .
             Artide 4                                     Article 4
Member States shall prescribe that letters and          Unchanged
order forms used by the branch shall state ,
 in addition to the information prescribed by
Article 4 of Directive 68/ 151 /EEC , the register
 in which the file in respect of the
 ---pagebreak---                                          12 -
Initial proposal                                       Amended proposal
branch is kept together with the number of
the branch in that register .
                 II                                         II
      Branches of companies from
         third countries                                  Unchanged
            Article 5                                      Article 5
Documents and particulars concerning a                    Unchanged
branch set up in a Member State by a
company which is not governed by the
law of a Member State but which is of
a legal form comparable with the types
of company to which Directive 68/ 1 51 /EEC
applies shall be published according to the
law of the Member State of the branch in
accordance with Article 3 of the said
Directive .
            Article 6                                       Article 6
1 . The compulsory disclosure provided for in          Unchanged
in Article 5 shall cover at least the following
documents and particulars :
                                                     /
(a)   The address of the branch ;
                                                ( aa ) the object of the
                                                activities of the branch ;
( b ) the law of the State by which the
company is governed ;
 ---pagebreak--- Initial proposai                                           Amended proposai
( c ) where the said law so provides ,
the register in which the company
is recorded and the registration
number of the company in that
register ;
                                                  ( ca )  the existence of other
                                                 branches in the same Member
                                                  State , together with the
                                                 particulars referred to in ( a ),
                                                  ( aa ) and < c );
( d ) the instruments of constitution , and         Unchanged
mémorandum and articles of association
if they are contained in a separate
instrument with all amendments to these
documents ;
( e ) the legal form of the company , its seat ,
its name and its object and the amount
of subscribed capital if these matters are
not shown in the documents covered by
subparagraph ( d ) ;
(f)    the name of the branch if that is different
from the name of the company ;
( g ) the appointment , termination of office and
particulars of the persons who either as a
body constituted pursuant to law or as members
of any such body and those who as permanent
representatives of the company for the activities
of the branch are authorized to represent the company in
 ---pagebreak---                                         n
Initial proposai                                   Amended proposai
dealings with third parties and in
legal proceedings . It must be stated
whether the persons authorized to
represent the company may do so alone or
must act jointly ;
                                                < ga ) the winding-up of the
                                                company and the appointment of
                                                liquidators , particulars
                                                concerning them and their
                                                powers ;
( h ) the accounting documents referred
to in Article 7 ;
(i)   the closure of the branch .               ( i)   the closure of the branch
                                                and transfers of its location .
2 . The Member State of the place of the        2.    Unchanged
branch may require the deposit in the
register of the branch of the certified
signature of the persons referred to in
paragraph 1 < g ).
           Article 7                                   Article 7
1 . The compulsory disclosure of accounting     1.    Unchanged
documents provided for by Article 6 ( 1 ) ( h )
shall apply to at least the annual accounts and
annual report of the company .
 ---pagebreak---                                        15
Initial proposal                                   Amended proposal
2 . Where the company produces consolidated      2 . Unchanged
accounts and a consolidated annual report
instead of annual accounts and an annual report
the compulsory disclosure provided for in
Article 5 shall cover such consolidated accounts
and the consolidated annual report .
3 . The documents covered by paragraphs 1       3.   The documents covered by
and 2 must have been drawn up and audited       paragraphs 1 and 2 must have
pursuant to the law which governs the           been drawn up in accordance
company and in accordance with the relevant     with     Directives
provisions of such legislation or , in          78 /660 /EEC and 83 / 349 /EEC
default thereof , in accordance with the        respectively , or so as to be
accounting principles generally accepted        equivalent to annual accounts
in the State in question .                      or consolidated accounts and an
                                                annual report or a consolidated
                                                annual report drawn up
                                                according to the Directive
                                                concerned ; they must also have
                                                been audited pursuant to the
                                                law which governs the company .
4.  Article 3 ( 3 ) shall apply .                4 . Unchanged
          Article 8                                 Article 8
Member States shall prescribe that letters      Member States shall
and order forms used by the branch shall        prescribe that letters and
state the register in which                     order forms used by the
                                                branch    state  the
                                                register in which
 ---pagebreak---                                       16
Initial proposai                          Amended proposai
the file in respect of the branch is kept the file in respect of the
together with the number of the branch in branch is kept together with
that register .                           the number of the branch in
                                          that register . If the law
                                          governing the company
                                          requires an entry in a
                                          register , that register and the
                                          number of the entry shall also
                                          be stated .
                                                      Ila
                                          Disclosure of particulars in
                                          respect of branches in the
                                          register in which the company
                                          is recorded
                                                   Article 8a
                                          The particulars of branches ,
                                          irrespective of their location ,
                                          opened by companies subject to
                                          the law of a Member State and
                                          to which Directive 68/ 1 51 /EEC
                                          applies , shall be disclosed by
                                          those companies in accordance
                                          with Article 3 of the said
                                          Directive .
 ---pagebreak---                                         17
Initial DroDosal                                  Amended DroDosal
   III                                                      III
Transitional and final provisions                 Unchanged
   Article 9                                              Article 9
Member States shall provide for appropriate       Unchanged
penalties in the case of failure to disclose
the matters set out in Articles 1 , 2 , 3 , 5 , 6
and 7 and of omission from commercial documents
of the compulsory particulars provided for in
Articles 4 and 8 .
   Article 18                                             Article 10
Each Member State shall determine by which        Unchanged
persons the disclosure formalities provided
for in this Directive are to be carried out .
   Article 11                                             Article 11
Pending subsequent coordination , Member          Unchanged
States need not apply the provisions of
Articles 3 and 7 to the branches of banks ,
other financial institutions and insurance
companies .
 ---pagebreak---                                          18
Initial DroDosal                                  Amended DroDosal
     Article 12                                            Article 12
1 . Member States shall bring into force the       1.  Unchanged
laws , regulations and administrative
provisions necessary for them to comply with
this Directive by 1 January 1990 . They shall
forthwith inform the Commission thereof .
2 . Member States may stipulate that the          2.   Member States shall
provisions referred to in paragraph 1 shall        stipulate that the provisions
not apply until 1 January 1992 .                  referred to in paragraph 1
                                                  apply from '1 January 1991 .
3.    Member States shall communicate to the      3.   Member States shall
Commission the texts of the main provisions        communicate to the Commission
of national law which they adopt in the           the texts of the provisions of
field covered by this Directive .                 national law which they adopt
                                                   in the field covered by this
                                                  Directive .
     Article 13                                            Article 13
The Contact Committee set up pursuant to           Unchanged
Article 52 of Directive 78/660 /EEC shall also :
 (a)   facilitate , without prejudice to the
       provisions of Articles 169 and 170 of the
       Treaty , the harmonized application of this
       Directive , through regular meetings dealing ,
       in particular , with practical problems arising
       in connection with its application ;
 ---pagebreak--- Initial proposai                                Amended proposai
(b)   advise the Commission , if necessary ,
      on any necessary additions or amendments to
      this Directive .
    Article 14                                          Article 14
This Directive is addressed to the Member       Unchanged
States .