A European Company is a type of limited-liability Company that follows the European Union legislation and helps the owner run his business easier if he is active in more than one country in the European Union.
This type of company is a suitable choice for those who run activities in more countries and it needs to be created under the law of one European Union state member and have subsidiaries in other country than the headquarters.
In this article, the experts at our law firm in Romania answer the commonly asked questions about the European Company, its rules for the establishment and other details.
WHAT ARE THE REQUIREMENTS FOR THE EUROPEAN COMPANY?
Below, our team of Romanian lawyers lists the main requirements for the European company:
- office requirements: as stated above, for this company the registered office and the head office must be located in the same EU country.
- establish presence: the company needs to establish its presence in other EU countries, whether in the form of a subsidiary or a branch.
- minimum capital: for this type of company, the minimum subscribed capital is 120,000 euros.
- agreement: the company owner and the employees or the representative need to reach an agreement on the employee’s participation in the company bodies.
It is useful to know that the requirements set for the European Company can vary across different EU countries. Our team of agents who specialize in company formation in Romania can provide you with complete details.
HOW CAN YOU SET UP AN EUROPEAN COMPANY?
A European Company can be formed as follows:
Merger: this is suitable for public limited companies; at least two different ones from different EU countries are needed.
European holding company: public or private limited liability companies can form this type of holding company; additional requirements apply.
European subsidiary: suitable for companies, at least two entities from different EU countries can form this type of subsidiary.
Convert: a public limited liability company, that has had a subsidiary in another EU country for at least two years can be converted.
Our team of attorneys in Romania
can provide more details about each of these four manners in which the European Company can be set up.
After registration of the European company, the registered office and the transfer need to be published in the Official Journal of the European Union.
An alternative would be to transfer the registered office of the European Company to Romania, should this be the chosen EU country of choice. This means that the existing European Company does not need to be wound up, as long as it is not already going through processes such as liquidation or insolvency. A public notice, with two months in advance, it issued regarding the intention to transfer. The shareholders of the company need to approve this transfer and the authorities in Romania need to receive all of the relevant documentation for the transfer as well as proof that the formalities for transfer have been handled and that the interests of the creditors have been taken into account. The documents will differ according to the manner in which the European Company is established. Some information may be considered general, such as the name of the company, the registered office or sector of activity.
Our Romanian lawyers can provide investors with more information on how the transfer can be accomplished as well as the required documents.
Setting up such a company may bring you certain advantages, such as those related to the fact that insolvency, cessation of payments, liquidation or winding up are regulated by the country in which the company has the registered office, so you can choose the country that is more suited to your financial and procedural needs.
In conclusion, founding and European company to run business in more European countries is the cheapest and most convenient way.
What are some other issues concerning the European Company?
Understandably, investors who start this type of business will need to follow the accounting rules applicable to limited liability companies in the EU country in which the company is registered. For this purpose, our team of accounting experts can provide more details on the financial documents, the filing dates and the requirements for keeping the relevant accounting or transaction files. When the European Company is a financial institution, a credit company or an insurance undertaking it will follow the rules and regulations applicable to these businesses in Romania.
Investors who open a European Society have the following options regarding the organization of the new European Company:
One tier-system: here, the management consists of and administrative body, have a chairman appointed from one of the members, and the members must meet quarterly at least.
Two tier-system: where the management must be formed by a supervisory body and a management body, and no one can be a member of both bodies. The management needs to report to the supervisory body quarterly at least and send any important data or information as soon as possible.
According to Eurostat, the following statistics apply to business demography in the EU in 2016:
- the business economy of the EU comprised approximately 27 million active companies.
- these companies employed some 150 million individuals.
- the number of new companies in the EU increased by 3.5% in 2016 compared to 2015.
Our team of attorneys in Romania can answer any further questions about the legal requirements for opening an European Company can provide adequate details as per your situation.
Please feel free to contact us for more details about how to open an European Company.
Pentru versiunea in romana a acestui articol, va rugam sa vizitati Infiintare Companie Europeana.