Tuesday, 27 January 2004

Questions (127)

Gay Mitchell

Question:

240 Mr. G. Mitchell asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will make a statement on the proposals for a European company (details supplied). [1298/04]

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Written answers (Question to Minister for Enterprise)

On 8 October 2001 Regulation EC No. 2157/2001 to establish a European company statute (Societas Europaea) and a related Directive 2001/86/EC concerning worker involvement in European companies was adopted by the European Council. The European company statute is a new legal instrument that gives companies with commercial interests in more than one member state the option of forming a European company, SE, the objective of which is to make it easier for such companies to operate across the EU.

The regulation, which has direct application in member states, and the directive, which will have to be transposed into law in all member states, will enter into force on 8 October 2004.

Under the European company statute, an SE can be set up by the creation of a holding company or a joint subsidiary or by the merger of companies located in at least two member states or by the conversion of an existing company set up under national law which has a subsidiary in another member state. The European company statute therefore provides existing companies with the option of restructuring on the basis of their being one legal entity European company, with branches throughout the EU rather than having subsidiaries under the national laws of each member state in which they operate.

The regulation contains other requirements relating, for example, to the manner of control and management, and where no specific requirements are stipulated, the national law relating to public limited companies will apply.

It is envisaged that the European company statute will be attractive for companies seeking an efficient structure to operate on a pan-European basis and that it will enable companies to expand and restructure their cross-border operations without the costly and time-consuming complex network of subsidiaries governed by different national laws. It is seen as a step forward in efforts to make the internal market a practical reality for business, and to encourage more companies to exploit cross-border opportunities.

My Department is currently engaged in consultations with interested parties regarding the necessary legislative arrangements to provide for the operation of the European company statute.