R.I.P. SPE – Welcome to the SUP!
The SPE (Societas Privata Europaea), also known as the European private company, has been controversial since it was proposed by the European Commission in 2008. Although the Commission recently announced the withdrawal of this proposal, supporters of worker participation are worried about rumors that a new proposal on an SUP (Societas Unius Personae) will be forthcoming soon.
The European Commission has long argued that changes in company law and other kinds of regulations are needed to make it easier for small and medium sized enterprises (SMEs) to engage in cross-border business. As a result, it proposed a Statute for the SPE in 2008, which would be a European company form that could be more easily used by smaller businesses than the SE form; it would have had a lower capital requirement and private legal form.
However, the SPE proposal quickly ran into opposition from the European trade union movement. Major concerns were the lack of adequate provisions for the protection of worker participation and the ability of companies to use this form to avoid national social regulations. These were strengthened by the lack of a “cap” on the maximum size of these companies, opening the door for large companies to use this legal form. Various new proposals were made by different Council presidencies, none of which however fully addressed these concerns.
In the annex to the Commission’s REFIT proposal from 2013 it was announced that the Commission was withdrawing the SPE proposal. However, rumor has it that a new proposal has been prepared on the SUP (Societas Unius Personae) and will be forthcoming shortly. This proposal would be to harmonize national company law on single member limited liability companies, allowing companies to establish subsidiaries in any of the EU Member States. It is rumored that the proposal contains no provisions on worker participation, would allow companies to establish these subsidiaries via online registration (i.e. without physical presence), have a minimum capital of EUR 1, and allow for the separation of registered seat and headquarters between different countries.
On 9.4.2014, the EU Commission officially published a "Proposal for a Directive on single-member private limited liability companies" (COM(2014) 213 final).
"The proposed Directive would not introduce any new rules as regards employee involvement, i.e. how employees might be informed, consulted or participate in the running of a company. Instead, the rights of SUPs' employees would remain covered by existing national laws."
"The proposed Directive would provide an EU-wide set of harmonised rules for single-member private limited liability companies. As a result there should be in each Member State a national company law form called SUP (Societas Unius Personae) with the same requirements across the EU as regards:
- registration (possibility of completing the whole registration process electronically)
- uniform template of articles of association
- minimum capital requirement of €1
- and adequate protection of creditors"
"To enable business to enjoy the full benefits of the internal market, Member States should not require the registered office of an SUP and its central administration to be in the same Member State."
Further information and the text of the proposal can be found on the Commission website.
The ETUC strongly criticises the Commission's draft Directive calling it "a charter for avoiding tax and national labour rules" . The ETUC says "the Directive has two major faults in that it
- fails to define the size of company that the Directive applies to
- allows a company to register their business in a country different from the one in which they actually operate"
(see ETUC press release of 10.4.2014)