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GAZETTE
SEPTEMBER
1989
The "European Economic
Interest Grouping"
The following is an outline of the
main features of the European
Economic Interest Grouping, what
it is and how it works.
A) Statutory Basis of the EEIG
1. The Regulation on the European
Economic Interest Grouping
was adopted on 25th July 1985
by the Council of Ministers of
the European Communities and
came into force on 1st August
1989. A Regulation, unlike a
Directive, is binding in its en-
tirety and is directly applicable
in all Member States without
further national implementing
legislation. In this instance,
however, supplementary legisla-
tion will be needed to fulfil
certain requirements of the
Regulation.
2. The Company Law section of
the Department of Industry and
Commerce has prepared a
Statutory Instrument (S.I. No.
191 of 1989) entitled European
Communities (European Econ-
omic Interest Groupings)
Regulations, 1989. This Instru-
ment gives full effect to Council
Regulation 2137/85. It provides
a legal framework for groupings
of natural persons, companies
and other legal entities to enable
them to co-operate effectively
in economic activities across
national frontiers within the
European Community. The
Statutory Instrument is divided
into two parts, Part I relating to
Formation and Registration of
Groupings,
Part II relating to
Membership of Groups.
There
are two schedules attached to
the I ns t rumen t, the first
consisting of the full text of the
Council Regulation and the
second consisting of forms
relating to EElGs.
B) What is an EEIG?
1. An EEIG is unlike anything
known to Irish law, being
neither a company nor a
partnership but having some of
the characteristics of both.
Basically, it is a hybrid form of
undertaking designed to link
together two or more busi-
nesses from separate Member
States for the purpose of
promoting co-operation within
the Common Market.
2. Its
raison d'etre
is to enable its
members to become more
profitable by pooling activities,
By
Anne M . Neary, Solicitor,
and
Richard Caplan, Solicitor*
resources and services. It
cannot be formed for the
purpose of making a profit for
itself, but there is no prohibition
on making a profit as a con-
sequence of its activities.
3. It is intended to facilitate and
develop the business activities
of its members, while respect-
ing their legal and economic
independence. Therefore, it can
only carry on activities which
are related to but no more than
ancillary to the business of its
members.
4. The economic link between the
EEIG and its members is
essential and entails two kinds
of restrictions. Firstly, it cannot
be used to create a new activity
that has no connection with the
activities of its members. This
would necessitate the forming
of a company. Secondly, the
EEIG must not replace the
economic activities of its mem-
bers or become so important
that their activities are taken
over by it or become dependent
on it. If that were to happen, it
would behave like a company
under the cloak of an EEIG.
5. The above limitations apart, the
EEIG is entirely autonomous,
having full legal capacity. The
regulation leaves Member
States the option whether to
accord it legal personality. The
view favoured in Britain is that
the EEIG should be given full
legal personality.
C) For what purpose can the
EEIG be used?
1. The concept of the EEIG is
based on the French GIE
(Groupement d'lnteret Econom-
ique)
which was introduced in
France in 1967 and has been
used in large scale international
co-operations such as the
Airbus and the Ariane Space
Project. Since its inception in
1967, 9,000 GlEs have been
formed in France.
2. The EEIG can undertake
activities in a multitude of
fields. However, it must pursue
an activity or activities which
each of its members has in
common and which would
justify its existence.
3. The most obvious use of the
EEIG is for the provision of
services i.e. as a service
company to provide manage-
ment or specialist services (e.g.
accountancy), or for joint leasing,
selling, buying or distribution or
joint research and development.
Within its parameters, the use
to which the EEIG can be put is
varied and flexible.
D) Differences between en Irish
compsny and an EEIG
An EEIG differs in many respects
from a company registered under
the Companies Act 1963 in Ireland
e.g.:
1. A company can be formed for
a wide variety of purposes. An
EEIG is required to be formed
solely for the purpose of facil-
itating and developing the econ-
omic activities of its members.
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