European Company / Societas Europaea (SE)

The European Company, known by its Latin name “Societas Europaea” (SE), is a corporate form that enables companies to operate on a European level using a uniform legal regime. In this article we will take a detailed look at the European Company, explain its legal basis and highlight the advantages and challenges of this type of company.

Definition and legal basis

The European Company (SE) is a stock corporation under European law. It was introduced by Council Regulation (EC) No. 2157/2001 of October 8, 2001. The SE enables companies to operate throughout the European Union (EU) without having to establish separate legal entities in each member state.

Foundation and capital

An SE can be established in various ways:

1. By merger: Two or more stock corporations from different EU member states can merge and form an SE.
2. As a holding company: Shareholders of companies from different EU member states can establish an SE as a holding company.
3. By conversion: An existing stock corporation which has had a subsidiary in another EU Member State for at least two years may convert into an SE.
4. As a subsidiary: One or more companies in the EU may establish a subsidiary in the form of an SE.

The minimum capital of an SE is 120,000 euros.

Management and employee participation

An SE may have either a monistic management structure with an administrative board or a dualistic structure with a supervisory board and an executive board. The choice of structure depends on the rules of the Member State in which the SE has its registered office.

Employee participation is an important aspect of the SE. The SE Regulation provides that the rights of employees with regard to participation in the management of the company must be safeguarded.

Advantages of the European Company

1. Flexibility and mobility: companies can more easily operate in different EU countries and relocate their headquarters within the EU.
2. Uniform legal regime: The SE is subject to a uniform European legal framework, which reduces legal uncertainty.
3. Image and brand perception: The “SE” label can be perceived as a sign of the company’s pan-European orientation.

Challenges and criticism

1. Complexity of the formation: The formation of an SE can be complex and time-consuming, especially with regard to employee participation.
2. Costs: The establishment and management of an SE may be associated with higher costs than national corporate forms.
3. Legal differences: Although the SE has a uniform legal regime, there are still differences in the national legal systems that must be taken into account.

Practical application and examples

Some well-known companies have adopted the legal form of the SE. These include, for example, the car manufacturer Porsche, the software producer SAP and the sporting goods manufacturer Puma. These companies use the SE to simplify their pan-European activities and benefit from a uniform legal framework.

Conclusion

The European Company (SE) is a corporate form that allows companies to operate throughout the EU using a single legal regime. While it offers significant benefits, especially for companies with cross-border operations, it also brings challenges and costs. Companies wishing to establish an SE should carefully review the legal requirements and, if necessary, seek legal advice.