mARCH 2012 www.lawyer-monthly.com World Report - Europe 7

European Company Law review and consultation

The European Commission has launched a public consultation on the future of European Company Law.

European company law comprises a

large body of legislation on issues such as public limited liability companies' capital, takeovers, branch disclosures, shareholder rights, financial reporting and accounting, and single-member private limited liability companies' governance.

The consultation seeks views from stakeholders on the following areas:

• Objectives and scope of European company law - what should be the main objectives of European company law? Are the current rules fit for today's challenges? In which areas is there need for further evolution? What is the relationship between company law and corporate governance?

• Codification of Europan company law - should the existing company law Directives be merged in a single instrument in order to make the regulatory framework more accessible and user-friendly?

• The future of company legal forms at European level - What are the advantages and shortcomings of European company forms? Do existing company forms need to be reviewed? Should alternative instruments be explored?

• Cross-border mobility for companies - What can be done to facilitate the cross-border transfer of a company's seat? What if a company splits into different entities cross border? Should the rules on cross border mergers be reviewed?

• Groups of companies - i.e. a set of companies under a single management or source of control - Is there need for EU policy action in this field?

• Capital regime for European companies - Should the existing minimum legal capital requirements and rules on capital maintenance be modified and updated?

Specifically the consultation paper asks whether the objective of EU company law should be improving the environment in which European companies operate and their mobility within the EU; facilitating the creation of companies in Europe; setting the right framework for regulatory competition allowing for a high level of flexibility and choice; better protection of employees or better protection of creditors, shareholders and members.

The consultation paper also seeks

opinion on whether the EU's priority should be to improve the existing harmonised legal framework (on, for example, take-over bids, cross border mergers, shareholders' rights etc) or to explore new areas for harmonisation, or both.

The paper asks whether the focus of

EU company law should move away from the distinction between public/private towards listed/unlisted in order to ensure adequate protection to shareholders.

The paper asks specific questions

about the future of the proposed European private company or societas privata europaea which has been debated for more than three years without an outcome or agreement on a regime. There is also a section on cross-border transfers of a company's registered office and how this should be best achieved.

The consultation is being carried out online and it is open until 14 May 2012.

Google in breach of EU privacy rules?

The EU Justice Commissioner has said that Google’s changes to its privacy system are in breach of EU laws. According to the BBC, Viviane Reding said that ‘transparency rules have not been applied’, and that ‘any company which wants to utilise the European market of 500 million citizens - which we've made borderless, a golden opportunity - then the European rules apply’. The changes to the internet giant’s

privacy settings, which came into effect this week (March 1) mean that Google can utilise data collected from one service for all of its services. This means that users will be subjected to tailored and focused advertising, reflecting personal data such as sites previously visited and items searched for, amongst other things. It is claimed that the changes are in

direct breach of the 1995 European directive on data protection, and it is believed that an investigation will be mounted in the near future. However, in a blog post, Google’s

director of privacy, product and engineering said: “It's the same Google experience that you're used to, with the same controls.”

Germany’s new insolvency law comes into force The Act – Gesetz zur weiteren

The new German Company Restructuring Facilitation Act came into force on March 1st, after almost ten years of discussion and preparation with the aim of bringing the German system more in line with the popular UK system.

Erleichterung der Sanierung von Unternehman (ESUG) - is a response to the major weaknesses of the previous German insolvency proceedings, has many benefits, namely improvements such as giving more influence to creditors on key decisions, facilitating

self-administration and a new umbrella proceedings which will help with pre-packaged restructuring.

Germany is hoping that these changes will act as a way of attracting large companies to the country in order to restructure.