CELEX: 51986PC0397
Language: en
Date: 1986-07-23
Title: PROPOSAL FOR AN ELEVENTH COUNCIL DIRECTIVE BASED ON ARTICLE 54 ( 3 ) ( G ) OF THE TREATY CONCERNING DISCLOSURE REQUIREMENTS IN RESPECT OF BRANCHES OPENED IN A MEMBER STATE BY CERTAIN TYPES OF COMPANIES GOVERNED BY THE LAW OF ANOTHER STATE

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