The Gazette 1967/71

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" 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 by GRAHAM M. GOLDING, Dip.Jur.Eur. (U.C.D.), M.A., LL.B. (T.C.D.), Solicitor

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 86