542 / 736
creditors in the case of mergers.
The Commission said states without merger
laws should enact them and all interested parties
should receive adequate information about any
proposed merger. This
included disclosure, an
independent approval of any share exchange ratio
and discussions with workers on how the merger
would affect them. Creditors too would be pro
tected from any threat to their claims.
But the Commission noted that this directive
could not apply
to
transborder mergers, yet
another reason why the Six should proceed quickly
with the Eurocompany law.
COMMON MARKET PROPOSES
ESTABLISHING THE
"EUROPEAN COMPANY"
by
GRAHAM M. GOLDING, Dip.Jur.Eur.
(U.C.D.), M.A., LL.B. (T.C.D.), Solicitor
Since 1958, with all its ups and downs, there
has in fact been a series of European Communities
—ECSC, EURATOM and EEC, together now
known as "The European Communities". It is
into this elect group (comprised at present of the
"Big" Six, i.e. France, Italy, the Federal Republic
of Germany, Belgium, Luxembourg and
the
Netherlands) which we (with Britain and others)
have at long last been accorded the right to
negotiate terms of entry.
The purpose of this article is not to sketch the
history of what led to the Common Market, or
what now exists in fact; or whether or not it
would be a good thing for Ireland to join. All
these factors are matters for the historians and
politicians. The present writer merely seeks
to
draw attention
to one of the latest and most
significant of the developments within the
law
of the Common Market, namely the proposed
setting up of the European Company
(Societe
Anonyme Europeenne,
hereafter referred to sim
ply as the European Company, or more shortly,
as "S.E.", i.e. Societe Europeene).
Why should a European Company be necessary
and why should provision for one be made? Well,
the Treaty of Rome (which, of course,
is
the
Charter of the Common Market) provides for full
freedom of movement of capital, services and the
right of freedom of establishment, e.g. of busi
nesses—that is, to set up a company or business,
in any of the member States. Each of the member
States has a different company law, so imagine
the difficulties involved in, for example, a Dutch
company wanting to set up a similar company in,
say, Italy. Or, if
we
were a member of the Com
mon Market, imagine the problems of an
Irish
company wanting to set up a company in France,
Western Germany or some other member State.
The Treaty of Rome also provides
that all
member States must bring about "harmonisation"
of their laws so as to approximate, in the cases
under discussion, company and tax law. But this
is
much
more easily said than done. In England
and Ireland—which are not yet members of the
Common Market, there are, of course, several
forms of incorporated company provided for by
our laws. In Germany, there are, basically, the
Aktiengesscllschaft
(A.G.) or a
Gescllschaft mit
beschrdnkter Haftung
(G.m.b.H.); in France, the
Societe a
responsabihte
limitec
(S.A.R.L.) and
Societe Anonyme
(S.A.); in Holland, the nearest
similar legal entity is the
Naamloze Vennootschap
(N.V.); in Italy, the
Societd a responsabilitd limi-
tada
(Ltd. Co.) and the
Societd per Azioni
(Cor
poration); in Belgium the most attractive form of
company is the
Societe Anonyme
with not less
than three directors. In Luxembourg a company
may be formed with a minimum of formality.
The Six have been busily harmonising their
company and tax laws, which it will be appre
ciated go hand in hand. But, as the ultimate aim
of the Common Market is a Europe fully inte
grated and united economically, it was thought
desirable some years ago to ask Professor Pieter
Sanders, doyen of the Faculty of Law at Rotter
dam, to prepare suggestions for a Common Mar
ket Statute to set up the S.E. Professor Sanders'
Report was published in 1967. A further Report
by Professor Lyon-Caen of the Faculty of Law
and Economic Science of Paris was published in
1970 (which mainly dealt with the rights of repre
sentation of employees on the boards of manage
ment of the S.E.).
On 24 June 1970 the European Commission at
Brussels approved a draft based on the works of
Professors Sanders and Lyon-Caen, of a European
Law on the S.E., the European Company.
What would be the situation if the differing
company laws of member States of the Common
Market were to be harmonised? Would this alone
not be enough? Some simple examples will suffice
to illustrate the difficulties at present.
Firstly, even before the member States' company
and tax laws arc harmonised (which, of course,
has not yet been entirely done, not by a long shot),
it was always possible for a firm X in Common
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