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Glossary of terms

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European company

European society is a form of a multinational society, the regulation of which is based on Community rules. The basis is Council Regulation (EC) No 2157/2001 on the Statute for a European Company (SE), followed by Council Directive 2001/86 / EC (SE Directive).

The SE Regulation foresees the adoption of laws in the Member States that fill the gaps that the regulation deliberately creates. The SE Regulation only regulates the basic status issues, their scope is far from exhaustive.

The Regulation either authorizes the Member States to create a specific rule - Member States may adapt the relevant issues for the SE without having to take into account the provisions they apply to the joint-stock company, are limited by the relevant European directives or refer directly to the stock law of Member States.

Benefits of a European Society:

  • Most legal orders do not allow a registered office to be relocated abroad without the cancellation of the company, and thus the interruption of the continuity of legal personality. European company allows relocation to another state, thereby changing the applicable law.
  • European society has a more flexible management and governance structure, and states are obliged to organize a SE based on their territory, both according to the dualistic and the monistic model (only the Board of Directors)

Capital Structure:

It does not differ from a regular joint-stock company. Mandatory share capital is created and is divided into shares and must be expressed in EURO. A minimum subscribed capital is of € 120,000 (however, conducting business in a particular field may require a higher amount).

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European Economic Interest Grouping (EEIG)

The basic purpose of regulation is to facilitate cooperation between entrepreneurs from different Member States. Based on the Council Regulation No 2137/85 establishing a European Economic Interest Grouping (EEIG). It is effective from 1 July 1989, with the exception of Articles 39, 41 and 42 which entered into force as from the entry into force of the Regulation. In the Czech Republic, effective from 1 May 2004.

EEIG differs from cooperatives and commercial companies in the CR by activity, which must meet the following conditions:

Positive definition of the activity:

  • The activity is intended to alleviate or develop the economic activities of its members, as well as to improve and increase the results of those activities
  • The EEIG's activities must be related to the economic activities of its members
  • Activities of the EEIG may be only ancillary activities in relation to the economic activities of its members

Negative definition of the purpose:

  • Purpose of the EEIG is not to achieve its own profit, but to support profit growth of members, EEIG can generate profit, but it should be divided among the members,
  • EEIG may not exercise executive or supervisory power over the actions of its members or other business activities (cannot be controlling person within the meaning of § 66a of the Commercial Code), an EEIG may exercise in relation to its members and other persons EEIG coordination activities.

The EEIG cannot carry out the activity instead of its members, but at the same time its activity cannot be independent of the activities of its members. E.g. EEIG whose members are lawyers, cannot practice law itself but only ancillary activities, such as organizing training, clients seek etc. Most EEIG were founded in services, 90% are private sector.

The EEIG may or may not be a legal person, it depends on the legislation of a Member State, it is always possible participant in substantive and procedural relationships.

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