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FIRST DIRECTIVE

FIRST DIRECTIVE. FIRST DIRECTIVE. Importance, scope and subject matter Importance the first company law directive the cornerstone for a European company law History proposal – 1964, adopted in 1968 amended in 2003 consolidated version in 2009 2012 – business registars. FIRST DIRECTIVE.

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FIRST DIRECTIVE

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  1. FIRST DIRECTIVE др Вук Радовић, LL.M.

  2. FIRST DIRECTIVE • Importance, scope and subject matter • Importance • the first company law directive • the cornerstone for a European company law • History • proposal – 1964, adopted in 1968 • amended in 2003 • consolidated version in 2009 • 2012 – business registars

  3. FIRST DIRECTIVE • Importance, scope and subject matter • Personal scope of application • enumeration • applies to all limited liability companies European company law as a law of limited liability companies

  4. FIRST DIRECTIVE • Importance, scope and subject matter • Subject matter • Disclosure • Validity of obligations entered into by a company • Nullity of the company

  5. FIRST DIRECTIVE • Formation and validity of companies • Formation • only with respect to disclosure • exception: Article 11 preventive control

  6. FIRST DIRECTIVE • Nullity of the company • policy • limit the grounds for nullity • limit the retroactive effect • limit a period for challenging • grounds for nullity • scope of the rule • only as from registration • enumerates six grounds for nullity

  7. FIRST DIRECTIVE GROUNDS FOR NULLITY • failure to execute an instrument of constitution or to comply with the rules of preventive control or legal formalities • objects of the company are unlawful or contrary to the public policy • failure to state in the instrument of constitution or the statutes the name of the company, the amount of the individual subscriptions of capital, the total amount of the capital subscribed or the objects of the company

  8. FIRST DIRECTIVE GROUNDS FOR NULLITY • failure to comply with the national law requirements for minimum amount of paid-up capital • incapacity of all the founder members • contrary to the national law the number of founder members is less then two Exhaustive list Optional for EU members

  9. FIRST DIRECTIVE • Nullity of the company • procedure • mandatory court decision • narrow time limits for challenging the decision • the company goes into liquidation • consequences • effects as against third parties • liabilities incurred before nullification remain unaffected • liabilities incurred after nullification? • ex nunc effect on the capacity of a company to enter into obligations

  10. FIRST DIRECTIVE • Nullity of the company • consequences • effects within the company • regulated by national laws • exception – Article 13(5) • implementation in Serbia

  11. FIRST DIRECTIVE • Disclosure • Importance and purpose • duty to transfer information to others • two ways to transfer information • Who are the addressees? • EC Company Law is mostly about information rules • nature of disclosure MANDATORY v. VOLUNTARY

  12. FIRST DIRECTIVE • Disclosure • Importance and purpose • precondition • advantages and disadvantages • capability to act on information received • disclosure rules in EC Directives • First Directive – what, where and effect • Second and Fourth Directive – what • SLIM Group • purpose – recital 3

  13. FIRST DIRECTIVE • Disclosure • What must be disclosed? • Legal sources: • First Directive – Art. 2(1) • Second Directive – Art. 2 and 3 • Fourth Directive • at least the following documents and particulars:

  14. FIRST DIRECTIVE ITEMS TO BE DISCLOSED • Instrument of Constitution and Statutes • instrument of constitution and statutes if they are separate documents • amendments to the documents mentioned in a) • consolidation of each document after amendment • minimal content of these documents

  15. FIRST DIRECTIVE ITEMS TO BE DISCLOSED • Composition of the Bodies • appointment and termination • particulars of the members • power of representation (alone or jointly) • number of members • procedure for appointing members • allocation of powers

  16. FIRST DIRECTIVE ITEMS TO BE DISCLOSED • Capital • the amount of subscribed capital • the amount of authorized capital • Accounts • previously – First Directive (Art. 2(1)(f)) • currently – Fourth Directive (Art. 47-51) • extension of the duty to disclose • the most disputed item

  17. FIRST DIRECTIVE ITEMS TO BE DISCLOSED • Seat, Legal Form and Objects of the Company • transfer of the seat • seat and legal form • only in business correspondence • (plus trade name) must be specified in the statute, instrument of incorporation or separate document • objects of the company

  18. FIRST DIRECTIVE ITEMS TO BE DISCLOSED • Winding Up, Nullity and Liquidation • winding up of the company • declaration of nullity • liquidators – appointment, particulars and powers • termination of liquidation

  19. FIRST DIRECTIVE ITEMS TO BE DISCLOSED • Shares - characteristics of shares (nominal value, number, limitation of share transfer, types, rights) • Formation • contributions paid • contribution in kind • founders’ identity • costs of company’s formation • special advantages granted in the formation phase

  20. FIRST DIRECTIVE • Disclosure • Means of disclosure • source of information • the companies register • single file or sheet for each company • unique identifier • availability of all the documents in full • electronic versus paper publication • conversion to electronic form

  21. FIRST DIRECTIVE • Disclosure • Means of disclosure • registration rules • possibility of registration in electronic form • language rules • official language of the register • translation • changes • 21 days • exception

  22. FIRST DIRECTIVE • Disclosure • Means of disclosure THREE MEANS OF DISCLOSURE • extract from the register • right to obtain a copy (complete or in part) • application in paper or by electronic means • copies in paper or by electronic form • costs • certification (“true copies”)

  23. FIRST DIRECTIVE • Disclosure • Means of disclosure • publication • second level of disclosure • national gazette • indication on business correspondence • third level of disclosure • types of documents • subjects to be disclosed

  24. FIRST DIRECTIVE • Disclosure • Effects of disclosure • two sides of publicity: • negative side of publicity • no presumption that third party has knowledge • third party can rely on the real legal situation • company can prove otherwise

  25. FIRST DIRECTIVE • Disclosure • Effects of disclosure • positive side of publicity after disclosure company can rely on information before 16th day from 16th day rebuttable presumption conclusive presumption

  26. FIRST DIRECTIVE • Disclosure • Effects of disclosure • errors in the registration and publication • duty to avoid discrepancies • third party can invoke the published version • company can prove otherwise • Persons responsible for registration • not harmonised

  27. FIRST DIRECTIVE • Disclosure • Sanctions • partly harmonised • two kinds of violations • failure to publish accounts • failure to make the required indications on business correspondence • appropriate sanctions

  28. FIRST DIRECTIVE • Validity of obligations entered into by a company • Obligations entered by a company in formation • conditions: • before a company has acquired legal personality • obligation is entered in its name • the company does not assume the obligations

  29. FIRST DIRECTIVE LIABILITY OF ALL PERSONS • joint and several • unlimited • unless otherwise agreed

  30. FIRST DIRECTIVE • Validity of obligations entered into by a company • Obligations entered by directors who are irregularly appointed • purpose • applicable to third parties (not members)

  31. FIRST DIRECTIVE • Validity of obligations entered into by a company • Ultra vires doctrine • whether the company will be bound by acts done by the organs in excess of: • objects of the company • internal limitations of powers

  32. FIRST DIRECTIVE • Ultra vires doctrine • term: “organ” • organs of decision and deliberation • organs of representation • mandate theory v. Organtheorie • all member states recognized ultra vires doctrine (except Germany) • German model prevailed

  33. FIRST DIRECTIVE • Ultra vires doctrine • national law excludes the powers of the organ in a general way • national law defines situations where the company may not act I POWER OF REPRESENTATION RESTRICTED BY A GENERAL RULE OF LAW

  34. FIRST DIRECTIVE • Ultra vires doctrine • organ acts outside the objects of the company as fixed in its statutes • power of representation conferred by the statute on a single person or whole board • all other cases – other limitations of powers arising under statutes and decisions II POWER OF REPRESENTATION RESTRICTED BY COMPANY ACTS OR DECISIONS

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