EUROPEAN COMPANY FORMATION

Abstract

The article analyses four different methods of formation of European company, envisaged in the proposal for a Council Regulation on the statute for a European Company. This Regulation proposal has been a contentious question for more than thirty years in European Union, and its last version (1991.) is a compromise between two different approaches in company law systems in the EU - civil law and common law system. European company may be formed in four different ways. These ways are: merger, setting up of a joint holding, setting up a joint subsidiary and transformation of national public limited company into European company. For each of these ways, common conditions are that involved companies must be registered in the EU, and that they must provide a minimum capital of 100 000 ECU, to form a European company. Author points to the fact that in previous proposals possibility of forming European company was much more restricted for private limited companies. In the recent proposal that possibility is significantly increased, by making it possible for a private limited companies to form a European company by setting up a joint holding or a joint subsidiary.