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EU Company Law Directives

Simplification of Capital Maintenance Rules - 2^nd Company Law Directive

On 29 October 2004 the European Commission published its proposal for a directive of the European Parliament and of the Council to amend Council Directive 77/91/EEC as regards the formation of public limited liability companies and the maintenance and alteration of their capital (The Second Company Law Directive). The proposals were agreed and Directive 2006/68/EC was published in the Official Journal on 25 September 2006 with an implementation date of 15 April 2008.

The overall objective behind the proposals is to improve the efficiency and competitiveness of companies by making it easier for them to react more promptly and at less cost to developments in the markets relevant to them by simplifying some of the provisions in the Second Directive.

The consultation on the implementation of the amendments to the 2nd Company Law Directive (Simplification of the Capital Maintenance Rules) was published on 28th February 2007 and closed on 1st June 2007. It formed part of Chapter 6 of the consultation on "Implementation of the Companies Act 2006". The Government response to the consultation on the implement of amendments to the 2nd Company Law Directive.

DBERR lead: Julie Ford – tel: 020 7215 2162

E-mail to Julie.ford@berr.gsi.gov.uk

Company Disclosures - 4^thand 7^th Company Law (Accounting) Directives

Company Disclosures - 4thand 7th Company Law (Accounting) Directives
On 27 October 2004 the European Commission published its proposal for a Directive of the European Parliament and of the Council to amend Council Directives 78/660/EEC and 83/349/EEC concerning the annual accounts and consolidated accounts of certain types of companies. The proposals were agreed and Directive 2006/46/EC was published in the Official Journal on 16 August with an implementation date of 5 September 2008.

The UK consultation on the implementation of the measures in the Directive opened on 5th March 2007 and closed on 1 June 2007. Legislation implementing the Directive will be introduced with the secondary legislation implementing the accounting provisions under section 15 of the Companies Act 2006. The government response to the consultation was published on 19 July 2007 and is available from the consultations website.

DTI lead: Julie Ford – tel: 020 7215 2162

Email julie.ford@berr.gsi.gov.uk

Cross Border Mergers Directive

The Directive, agreed in 2005, on cross border mergers requires Member States to put in place a legal framework enabling public and private companies to engage in cross border mergers. Member States have until December 2007 to implement the Directive into national law.

On 5 March 2007, the Government has launched a public consultation on the implementation of the Cross-Border Mergers Directive. This Directive establishes a facilitative framework for cross-border mergers to occur between UK companies and companies elsewhere in the EEA.

This Directive provides for the first time:

• A legal framework to enable cross-border mergers between companies with share capital from member states in the European Economic Area.
• The Directive removes legislative and administrative difficulties that UK limited liability companies may encounter when merging in the EEA.
• Increased choice to UK companies seeking to merge with companies in the EEA.

We are keen to gather views both on the approach to implementation and on some specific issues. The consultation opened on 5 March and closed 1 June 2007, the department is currently considering the responses.

Further information about the Directive is available on the Commission's website on EU company law and corporate governance.

DBERR lead: Sudha Oza – tel: 020 7215 2529

mailto:sudha.oza@berr.gsi.gov.uk

Auditing – Revised Audit Directive (8^th Company Law Directive

The Directive updates provisions of the earlier Audit Directive and introduces new provisions on public oversight, third country auditors and various other matters. The Directive was published on 9 June 2006 and came into force on 29 June 2006.
A copy of the DTI consultation document on the negotiation of the proposal, including a copy of the Commission proposals, the summary of consultees’ responses and the Government response (URN 05/1005 & 04/1382) can be viewed or obtained by clicking on the REPORTS and PUBLICATIONS link at the top right hand corner of this page. Further information about the Directive is available on the Commission's website on EU company law and Corporate Governance (please see the link on the right of this page).

Implementation of Directive 2006/43/EC on Statutory Audits of Annual and Consolidated Accounts (8th Company Law Directive)

The Department published on 5 March 2007 a consultation document on implementing options for this Directive (URN 07/609). The consultation closed on 1 June 2007. Government conclusions and a set of draft regulations were published on Thursday 19 July. You are invited to send comments and supporting evidence on any part of the consultation by email to AuditDirective@berr.gsi.gov.uk  the deadline for responses is Monday 15 October 2007.

DBERR  lead: Amita Randhawa– tel: 020 7215 3585

mailto:amita.randhawa@berr.gsi.gov.uk

Cross Border Transfer of Registered Office of Company Directive

No formal proposal for a Directive on cross-border transfer of registered office has been made by the Commission. The possible need, scope and contents of such a Directive form part of the Commission’s consultation on the EU Company Law Action Plan referred to above. The Directive, if brought forward, would provide a legal framework for companies registered in the EU to transfer their registered office from one Member States to another.

A copy of the DTI consultation document including an outline of the Commission proposals, the summary of consultees’ responses and the Government response (URN 05/544 & 05/1615) can all be viewed by clicking on the REPORTS and PUBLICATIONS link at the top right hand corner of this page.

DBERR lead: Maureen Beresford – tel: 020 7215 3342

mailto:maureen.beresford@berr.gsi.gov.uk

Shareholders’ Rights Directive

A directive proposal was made by the Commission in January 2006 and is now to be considered by the European Parliament and Council. The Directive is intended to help facilitate the exercise of basic shareholders’ rights and solve problems in the cross-border exercise of such rights, particularly voting rights. The UK public consultation on the directive was published on 26 October 2006 and closed on 22 January 2007.

The consultation and the government's response can be viewed by clicking on the Consultations link at the top right hand corner of this page. The final Directive will be published once the translation into EU languages has been officially cleared, the adopted text of the Directive, approved by the Council was published on 15 February 2007. Further information about the Directive proposal is available on the Commission's website on EU company law and corporate governance (please see the link on the right of this page).

DBERR lead: David Styles - tel: 020 7215 0211

Email david.styles@berri.gsi.gov.uk