22 Mar 2010

The European Private Company, its shareholders and its creditors

About a couple of years back this blog ran a post on the upcoming scenario of corporate law in Europe in as much as the Socieas Europea (Latin for European Company) was being discussed with full vigour. Now that much water has flown and the idea of having a company having common identify and entity across jurisdiction in Europe seems more clear than ever, in the paper entitled The European Private Company, its Shareholders and its Creditors, Sandra Van den Braak discusses some of the issues pertaining to European Private Company on the lines as proposed by the European Commission.

The reason why we have picked up this paper to run on our blog is not just the glaring issues pointed out by the author but also the aspect that the paper enumerates and discusses the tacit and underlying issues pertaining to the proposed structure of the European company in a manner as understandable to the common-folk, which has been the thrust of the idea behind this blog. The author begins the discussion with the requirements for the establishment of the European Private Company and thereafter discussing about the various legal rules applicable along with the potential need for such a structure discusses the issues relating to shareholder and creditors of the proposed structure in quiet detail.

The thurst of the paper is to pick out the issues which in the opinion of the author require a relook and further discussion in as much as a lot needs to be said and clarified on the relationship between the proposed strucutre vis-a-vis its shareholders and creditors in terms of their rights and obligations under the proposed regime. The issues pointed out are not just technical but rather cater to some of the heart-felt needs of such parties. In all, an interesting read.

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