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light of the observations of the Joint Committee and of
the Commission.
10.2 The Council Resolution of 17 December 1973
on Industrial Policy (OJ No. CI 17, 31 December 1973)
provides that the Council will act
(a) by 1 January 1975 on the draft Second Directive
which deals with the formation of public limited liab-
ility companies and with the maintenance and operat-
ion of their capital
(b) by 1 July 1975 on the draft Third Directive con-
cerning mergers between public limited liability com-
panies and
(c) by 1 January 1976 on the draft Fourth Directive
which deals with the annual accounts of limited liabil-
ity companies.
10.3 A working group of the Council has been exam-
ining the draft Second Directive. The draft contains
measures to maintain the integrity of company capital
in the interests of shareholders and third parties. It
also contains provisions requiring companies to which
the draft applies to maintain a minimum subscribed
capital. There are still substantial differences of opinion
between the Member States on the draft; these are
mainly of a technical nature. It now seems unlikely
that the draft directive will be adopted by 1 January
1975 as provided for in the Council Resolution.
10.4 The draft Third Directive deals with Mergers by
"fusion", as distinct from Take-overs, between public
limited liability companies in the same member State.
The purpose of the draft is to make certain information
about proposed mergers available to shareholders and
employees. The adoption of the draft directive is a neces-
sary prerequisite to the harmonisation of legislation
on mergers across frontiers which will be dealt with by
a Community Convention under Article 220 of the
EEC Treaty (paragraph 10.3 Second Report). Work in
the Council on the draft directive has been suspended
until the Council of Ministers has examined the draft
second directive.
10.5 On 26 February 1974 the Commission submitted
to the Council a revised draft Fourth Directive on com-
pany law. The draft deals with the formal content of
the published accounts of limited companies. The re-
vised draft takes into account comments made by the,
new member States on the original draft and the opin-
ion of the European Parliament. A working group oi
the Council resumed examination of the draft in Nov-
ember 1974.
10.6 The Resolution on Industrial Policy provides
that examination of the draft Fifth Directive which deals
with the structure of public limited liability companies
will begin as soon as the opinions of the European
Parliament and of the Economic and Social Committee
are given. The Economic and Social Committee has
delivered its opinion on the draft Fifth Directive. The
draft proposes a three tier structure comprising a Super-
visory Board, a Management Board and a General
meeting of shareholders. Under the draft the Supervisory
Board will have power to appoint and dismiss the Man-
agement Board, to approve contracts and decisions con-
cerning the location and organisation of companies
and to approve the annual report and accounts. The
draft also provides for worker representation in com-
panies with more than 50 employees and suggests mod-
els for such representation. As the European Parliament
has not given its opinion examination of the proposal
has not yet commenced at working group level.
10.7 The Council's Resolution on Industrial Policy
also provides that the Council will begin its examinat-
ion of the Draft Statute for a European Company as
soon as the Commission has submitted its revised pro-
posal which will take into account the opinion of the
European Parliament and of the Economic and Socirl
Committee. The draft provides for the creation of com-
panies under a law common to the member States of
the Community. It also provides for worker particip-
ation. The European Parliament and the Economic and
Social Committee have both delivered their opinions
on the draft; the Commission will submit a new pro-
posal by May 1975 which will take account of these
opinions.
Draft Directive on Guarantees
11.32 The Committee of Experts from the Member
States which is examining the Draft Directive on the
Harmonisation of the Laws of the Member States relat-
ing to guarantees expects to complete its work at its
meeting which has been tentatively fixed for January
1975. The purpose of the Draft Directive is to achieve
rules in regard to contracts of Guarantee which would
apply throughout the whole Community in order to
facilitate the movement of capital which is envisaged
in Article 67 of the EEC Treaty. Legal, academic and
interested commercial bodies are being consulted on
the implications of the proposals for Ireland.
Economic Penal Law
11.33 A series of meetings has been held between ex-
perts from the Member States and the Commission to
consider co-operation in suppressing infringements of
European Economic Law. This follows a Council Decis-
ion in June 1961 to study the problems posed in relation
to the prevention and punishment of 'breaches of Com-
munity Regulations, Directives and Decisions. The co-
operation is aimed at the suppression of frauds by any
person which involves breaches of Community Legisla-
tion in the fields of Taxation, Customs, Agriculture, In-
dustry and Transport. The Conference of Ministers for
Justice on 26 November 1974 took formal note of a
report by the Commission on progress in this area.
The report concluded that the Commission together
with the national experts had evolved certain funda-
mental guidelines which would form the basis of a
system of co-operation. The Commission was invited
to continue with its work in order to submit a Draft
Convention to the Council in 1975.
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