Societas Europaea (SE) – The European Company
The SE is a European public limited company. An SE may be created on registration in any one of the Member States of the European Economic Area (EEA). Member States are required to treat an SE as if it is a public limited company formed in accordance with the law of the Member State in which it has its registered office.
The structure of an SE
An SE must have share capital and shareholders whose liability is limited in similar manner to that of a PLC. As with a PLC, an SE created in GB may denominate its share capital in any currency it chooses provided that at least £50,000 is denominated in Sterling.
Regardless of the currency in which it is expressed, an SE is required to have a minimum amount of subscribed share capital of the equivalent of at least EUR 120,000.
Minimum share capital
As with a PLC, an SE may only allot shares which are paid up to at least a quarter of their nominal value and the whole of any premium (except as part of an employees’ share scheme).
Managing a SE
There are two different systems for the structure of managing and controlling SEs. The SE’s statutes may, therefore, require either a one-tier or two-tier system of administration.
- In a one-tier system, management is undertaken by an ‘administrative organ’.
- In a two-tier system, management is undertaken by a ‘management organ’ and a separate ‘supervisory organ’ supervises the work of the management organ.
The Directive also makes provisions for employees to be involved in the management of an SE.
There are several ways of forming an SE and different types of bodies may be involved in each .
|Method of formation||Commercial bodies that may be involved|
|Merger||Two or more public limited companies (including SEs)|
|Holding SE||Two or more private or public limited companies (including SEs)|
|Subsidiary SE – Article 2(3)||Two or more companies (including SEs), firms or other legal bodies|
The commercial bodies forming an SE must have their registered offices in the EU.
In addition, at least two of the bodies must have a presence in different Member States; the exception being when an SE is itself forming a subsidiary SE. A PLC transforming into an SE must for 2 years have had a subsidiary company governed by the laws of another Member State.
How is an SE formed?
An SE cannot be registered and brought into existence until:
- agreement has been reached for employee involvement in company decisions; or
- the special negotiating body has decided to rely on the rules for employee involvement and consultation in force in the Member States where the SE has employees; or
- no agreement has been reached within the relevant period of time, so the standard rules apply.
Formation of a Holding SE
Two or more private or public limited companies (including existing SEs) formed under the law of a Member State and with a registered office in a Member State may form an SE by promoting the formation of a holding SE. At least 2 of the companies must be governed by the laws of a different Member State, or for 2 years have had a subsidiary company governed by the laws of another Member State or had a branch in another Member State.
Before forming a holding SE, draft terms for the formation and an explanatory report must be drawn up by the companies promoting the formation, and presented to general meetings of their shareholders. The explanatory report must explain and justify the legal and economic aspects of the formation and indicate the implications for the shareholders and for the employees of the adoption of the form of a holding SE.
Regardless of where the holding SE will be registered, any GB registered company involved in its formation must file the draft terms for its formation at Companies House at least one month before the company’s general meeting.
Once the draft terms have been approved, shareholders have 3 months to notify the company whether they intend to contribute their shares to the formation of the Holding SE.
Where the conditions are fulfilled, a notice to that effect must be delivered to Companies House within 14 days on Form SE70(1) . Shareholders who have not previously indicated they intend making their shares available have a further month in which to indicate whether they intend to make their shares available for the purposes of forming the holding SE.If the Holding SE is to be registered in GB, thregistration must be effected in the part of GB in which the SE will have its registered office address.
Formation of a Subsidiary SE
Two or more companies, firms or other legal bodies formed under the law of a Member State with registered offices and head offices within the Community may form an SE by subscribing for its shares. At least 2 of the companies or firms must be governed by the laws of a different Member State or for 2 years have had a subsidiary company governed by the laws of another Member State or had a branch in another Member State.
Formation by transformation of a PLC
A PLC registered in GB may transform into an SE registered in GB provided the PLC has for 2 years had a subsidiary governed by the laws of another Member State. The PLC cannot simultaneously transform to an SE and move its registered office to another Member State.
This process does not involve the winding up of the PLC or the creation of a new legal person in the form of an SE.
Before the transformation can take effect, the PLC must prepare draft terms of conversion and an explanatory report and present them for approval to a general meeting of shareholders. The explanatory report must explain and justify the legal and economic aspects of the conversion and indicate the implications for the shareholders and for the employees of the adoption of the form of an SE. In order to be approved, ¾ of the votes cast must be in favour.
What must the SE’s statutes contain?
There is no standard format prescribed for the statutes of an SE, which will depend to some extent on how the SE is formed. However, the Regulation sets out certain matters concerning the management and administration of the company that must be laid out in the statutes.
The statutes can normally only be changed by a decision of the shareholders in a general meeting. In order to be approved, ¾ of the votes cast must be in favour.
Other Member States may require a lower majority of ⅔ or, provided the shareholders present represent at least half of the subscribed capital, a simple majority of votes cast.
If the statutes conflict with the arrangements made for employee involvement, they may be amended by the management or administrative organ without a decision of shareholders but only to the extent needed to resolve the conflict.
Amendments to the statutes must be sent to Companies House within 14 days of the adoption of the amendment.
Transferring registration from one Member State to another
One of the aims of the Regulation is that an SE should be able to transfer its registered office to another Member State without being wound up. An SE registered in GB may transfer its registered office to another Member State and, conversely, an SE registered in another Member State may transfer its registered office to GB.. The principal requirement is the need to obtain shareholder approval.
No decision to transfer can be taken for 2 months after a proposal for the transfer has been published. During this time, the relevant authorities in the Member State where the SE is registered can oppose the transfer.
The transfer can only take place once the authorities in both Member States are satisfied that all the acts and formalities have been completed. The registry to which the SE is transferring relies on a certificate issued by the ‘old’ registry confirming they are complete. When an SE is transferring out of GB, the certificate will be supplied by the Secretary of State for Trade and Industry, following the correct completion and delivery to Companies House of the forms listed below.
The effective date of the transfer is the date on which the SE is registered in the Member State to which it is transferring.
When an SE transfers its registered office to GB, an accounting reference date will be set by Companies House in preparation for delivery of annual accounts. This date will be:
- the anniversary of the last balance sheet date required to be drawn up before the date of registration of the transfer; or
- if no balance sheet has been required to be drawn up under the laws of the Member State where it had its registered office or was first registered, the anniversary of the date the SE was first registered on formation.
Company type designators
The name of an SE must be preceded or followed by the abbreviation SE.
Use of the term ‘SE’ at the beginning or end of the name designates that it is a European Company. It must be in the exact form, SE, as required by Article 11(1) of the Regulation. It will not be acceptable to use, for example, S.E. or se or (SE) as the designator at the beginning or end of the name, although all these would be acceptable if they appeared within the name (i.e. not as the company type designator).
Administration and management
An SE may operate under either a one-tier or two-tier system of administration, as laid down in its statutes. Each is outlined below.
In this system an ‘administrative organ’ manages the SE. The administrative organ must meet at least once every three months. A chairman must be appointed from amongst the members.
The number of members of the administrative organ or the rules for determining it must be laid down in the SE’s statutes. However, the SE must have at least 2 members (unless employee participation is regulated in accordance with Directive 2001/86/EC with regard to the involvement of employees, in which case the minimum number is 3). There is no upper limit on the number of members.
In this system a ‘management organ’ manages the SE and a separate ‘supervisory organ’ supervises the work of the management organ. In general, no person may be a member of both.
The supervisory organ may not exercise management powers. It must appoint a chairman from amongst its members. Members of the management organ may be appointed by the supervisory organ. The management organ must report to the supervisory organ at least every 3 months.
The number of members of each organ or the rules for determining it must be laid down in the company’s statutes. However, both the management and supervisory organs must have at least two members. There is no upper limit on the number of members of either organ.
Other Member States may set different lower and upper limits on the number of members of an SE’s administrative, management and supervisory organs.
The first general meeting of an SE’s shareholders must be held within 18 months of the company’s incorporation. Thereafter, a general meeting must be held at least once in each calendar year within 6 months of the end of the company’s financial year.
General meetings may be convened at any time by the administrative organ, management organ or supervisory organ. Shareholders holding at least 10% of the SE’s subscribed capital (or some lesser percentage, if this is set down in the statutes) may request the SE convene a general meeting, stating in the request the items to be put on the agenda. Shareholders holding at least 5% of the SE’s subscribed share capital may request that additional items be placed on the agenda of a general meeting.
What accounts must an SE prepare?
The accounting requirements that apply to an SE are the same as those that apply to a PLC.
The accounts of an SE may be prepared in any currency, including Euros.
What other information does an SE need to register at Companies House?
In matters not covered by the Regulation or Statutory Instrument, an SE registered in GB must deliver to Companies House the same forms or documents that a PLC is required to register at Companies House. These include copies of certain resolutions, the location of certain statutory registers if not kept at the registered office address, change of accounting reference date, changes made to the share capital (e.g. increases to the share capital, allotment of shares, changes to the share capital structure or class rights), prospectuses and listing particulars, details of mortgages and charges created by the SE.
Public and Private Limited Companies in each Member State
|Member State||Public Limited Liability Companies||Private Limited Liability Companies|
|Belgium||la société anonyme / de naamloze vennootschap||la société privée à responsabilité limitée / besloten vennootschap met beperkte aansprakelijkheid|
|Germany||die Aktiengessellschaft||die Gesellschaft mit beschränkter Haftung|
|Greece||εταιρια περιοριομενης||ενώυμη εταιρια ευζύνης|
|Spain||la sociedad anónima||la sociedad de responsabilidad limitada|
|France||la société anonyme||la société à responsabilité limitée|
|Ireland||public companies limited by shares, public companies limited by guarantee having a share capital||private companies limited by shares, private companies limited by guarantee having a share capital|
|Italy||società per azioni||Società a responsabilità limitata|
|Luxembourg||la société anonyme||la société à responsabilité limitée|
|Netherlands||de naamloze vennootschap||de besloten vennootschap met beperkte aansprakelijkheid|
|Austria||die Aktiengessellschaft||die Gesellschaft mit beschränkter Haftung|
|Portugal||a sociedada anónima de responsabilidade limitada||A sociedada por quotas de responsabilidade limitada|
|Finland||julkinen osakeyhtiö / publikt aktiebolag||aktiebolag|
|United Kingdom||public companies limited by shares, public companies limited by guarantee having a share capital||private companies limited by shares, private companies limited by guarantee having a share capital|