Statute for a European Cooperative Society (SCE)

The European Union

1) OBJECTIVE

To facilitate cooperatives wishing to engage in cross-border business, by making legislative provision which takes account of their specific features. To provide for the involvement of employees in the European cooperative society (EEC) so that employees can play their proper part in the organization.

2) PROPOSAL

Proposal for a Council Regulation on the Statute for a European Cooperative Society.

Proposal for a Council Directive supplementing the Statute for a European Cooperative Society with regard to the involvement of employees.

3) CONTENTS

Proposal for a Council Regulation on the Statute for a European Cooperative Society

1.
A European cooperative society (SCE - the abbreviation is based on a Latin form of words) is to be a private-law body with legal personality. The members' contributions are to form a capital, divided into shares which carry entitlement to a return. The SCE is to have legal personality from the day of its registration in the State in which it has its registered office.
2.
The SCE's registered office, which is to be specified in its rules, must be within the Community and must be in the same place as its central administration.
3.
An SCE may be set up by any two or more legal entities formed under the law of a Member State, provided at least two of them have their registered offices and central administrations in different Member States.
4.
A cooperative society with an establishment or subsidiary in a Member State other than that of its central administration may form an SCE by converting into SCE form, provided it can show that it is carrying on a genuine cross-border activity.
5.
The capital of an SCE may not be less than ECU 100 000 or the equivalent in national currency.
6.
The capital may be increased or reduced without amending the rules, and without any public announcement, provided the minimum level is observed and that the amount of the capital is disclosed annually. The general meeting is to pass a resolution each year recording the amount of the capital at the end of the financial year and the variation by reference to the preceding financial year.
7.
The rules of the SCE must provide for a general meeting and for either a management board, with a supervisory board monitoring its activities (the two-tier system), or for an administrative board (the one-tier system).
8.
A general meeting must be held at least once a year, not later than six months after the end of the financial year. Meetings are to be convened by the management board or administrative board on its own initiative or at the request of at least 25 % of the members.
9.
In the two-tier system a management board is to manage the SCE. The members of the management board have power to represent the SCE in dealings with third parties and in legal proceedings. They are to be appointed and removed by the supervisory board. The same person may not serve on both boards of the same SCE at the same time. The supervisory board may nominate one of its members to occupy a vacancy on the management board. The member concerned then ceases to exercise his functions on the supervisory board.
10.
In the one-tier system a single administrative board is to manage the SCE. The member or members of the administrative board have power to represent the SCE in dealings with third parties and in legal proceedings. The administrative board may delegate powers of management, but not other powers, to one or more of its members.
11.
The following operations require the authorization of the supervisory board or the deliberation of the administrative board:
12.
The SCE may offer "investor" shares, carrying no voting rights, for subscription by interested parties. To offset these disadvantages such shares may be given preferential entitlements. Where the rules authorize persons who do not expect to use the SCE's services to subscribe for voting shares, they make special provision for the benefit of such non-user members with regard to the distribution of surpluses.
13.
As regards the drawing-up, auditing and disclosure of its annual accounts, and its consolidated accounts if any, the SCE is to be subject to the law of the State in which it has its registered office giving effect to the Community legislation in force.
14.
An SCE may be wound up either by a decision of the general meeting, in particular where the period fixed in the rules has expired or where the subscribed capital has been reduced below the minimum capital laid down in the rules, or by the courts, in particular where the registered office has been transferred outside the Community.
15.
As regards liquidation, insolvency and suspension of payments, the SCE is to be subject to the laws of the State in which it has its registered office.

Proposal for Council Directive complementing the Statute for a European Cooperative Society with regard to the involvement of employees

1.
This Directive sets out to align the laws, regulations and administrative provisions in force in the Member States so as to cater for the involvement of employees in the running of the SCE.
2.
No SCE may be registered until a model of participation or an information and consultation system has been chosen.
3.
The Directive refers back to the domestic rules governing the participation of employees in the supervisory or administrative boards of domestic companies and societies in general. If the Member State in which the SCE has its registered office has no rules on the participation of employees, or does not wish to apply such rules to the SCE, it must nevertheless comply with the minimum requirements of the succeeding articles as regards the informing and consulting of employees.
4.
Where most of an SCE's employees are members of the cooperative it is exempted from this procedure, and from the information and consultation requirement, as de facto they participate in shaping the strategies of the SCE in their capacity as members.
5.
The Directive describes the procedure to be followed for the adoption of information and consultation arrangements in SCEs with at least 50 employees.
6.
The management board or administrative board of the SCE must inform and consult the employees in good time; the Directive supplies a minimum list of areas in which information and consultation are required, including any proposals which might significantly affect the interests of the employees and any question concerning conditions of employment.
7.
The Directive lays down certain basic principles concerning election procedures and the performance of their functions by elected representatives. The representatives of the employees of the SCE are to be elected, and not appointed, and are to represent the employees of all the SCE's establishments, plants and facilities, even if they are employed part time.

4) OPINION OF THE EUROPEAN PARLIAMENT

First reading: Parliament approved the Commission's proposals subject to certain amendments. Where the proposal on the statute for a European cooperative society is concerned, the amendments relate in particular to the following aspects of such entities: designation, establishment criteria, procedures for convening general meetings, powers of general meetings, legal status and financial arrangements. As regards the involvement of employees in these entities, the amendments relate to the arrangements for informing and consulting employees and for their participation in decisions taken.

5) CURRENT STATUS OF THE PROPOSAL

Cooperation procedure

The Commission presented the proposals on 18 December 1991.

First reading: On 20 January 1993 Parliament approved the Commission proposals subject to amendments. The Commission has accepted some of the amendments.

The Commission presented some amended proposals on 6 July 1993.

The amended proposals are currently before the Council for a common position.

6) REFERENCES

Commission proposals COM(91) 273/III and IV final
Official Journal C 99, 21.04.1992
Amended proposals COM(93) 252 final COD0388 and COD0389
Official Journal C 236, 31.08.1993
European Parliament opinion
First reading Official Journal C 42, 15.02.1993
Economic and Social Committee opinion
Official Journal C 223, 31.08.1992