What is a European company?
A European company (also known as Societas Europaea – SE) is a type of limited-liability company functioning under the European Union law with the purpose of easing the way you run your business in the case that you want to be active in more than one EU country.
Are there any special terms for starting a European company?
Considering the fact that a European company is the best way to function in more than one country in the EU, any such company must be created under the law of one of the EU countries and have a branch or subsidiary in other EU countries besides the registered and head offices in the EU. It is compulsory that the registered and head offices be in the same country, while some Member States go as far as requiring the registered and head offices have the same address. Furthermore, there must be a minimum subscribed capital of €120,000 that must be divided into shares.
Before getting started on any procedures, you must come to an agreement with your employees concerning the way they will be involved in supervising the activity of your company.
How can I set up a European company?
There are four ways of setting up a European company.
If you have one or more public limited liability companies, you can merge in order to form European companies. However, at least two of the companies must be from different EU countries.
Another way to form a European company, offered exclusively to public limited liability companies, is conversion. The requirement you need to meet is that the public limited liability company needs to have had a subsidiary in another EU country for at least two years.
Public or private limited liability companies can form a European holding company if at least two of these companies are from different EU countries or they have had a subsidiary or a branch in another EU country for at least two years.
Companies, firms or other legal bodies can form a European company subsidiary. The requirements for such a formation are the same as for the formation of a European holding company.
Moreover, a European company can decide the set up of one or more subsidiaries that are also European companies.
The registration of a European company, along with the transfer of the company’s registered office must be published in the EU’s Official Journal.
What is the structural organization of the European company?
You can choose one of the following structures under which your company can operate: one-tier system – the management of the company consists in an administrative body that has to meet at least once every three months and have a chairman appointed from one of its members or the two-tier system – the company management is represented by a management body and a supervisory body; however, you can’t be a member of both and the management must report to the supervisory at least once every three months and pass on important information.
What are the advantages of setting up a European company?
Liquidation, insolvency, cessation of payments or winding up are all regulated by the rules for public limited liability companies in the country in which the company is registered, so you can choose whatever country meets your procedural or financial expectations. Thus it is a cheaper and easier way to manage your business in more than one EU country.
You can also transfer your registered office to whichever EU country you may please without having to dissolve the company and creating a new one, by writing a transfer proposal and publishing it in the Official Journal of the EU.