Overview and new laws of EC in 1992
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Introductory Guide by Clifford Chance
▪ THE European Commission has proposed
the creation of a new form of company, the European Company, based on Community law It believes that this proposal will encourage Community co-operation, explains 1992: An Introductory Guide, from international law firm Clifford Chance.
The firm has published this 93-page report in the belief that a proper understanding of the 1992 proposals and directives can only be achieved by a careful analysis in the context of each business sector.
In its section on company law, Clifford Chance says that the right to incorporate a European Company would be limited to certain cases: for instance, to give effect to a merger, or to form a holding company, subsidiary or joint subsidiary.
A European Company, which could establish its registered office in any member state, would have characteristics including: • A two-tier management structure; • Employees involved in at least major decisions with a direct effect on jobs; • Profits of a permanent establishment in any member state taxable in that country alone; • The European Company able to be converted to a limited company under the law of the state in which effective management is located.
In its section on transport, the booklet says that the Commission's white paper makes the point that transport services are fundamental to the economic development of the Community, representing more than seven per cent of the Community's gross domestic product.
The Commission's aims include the phasing out of road transport quotas; allowing cabotage; and establishing freedom to provide services for the transport of passengers by road.
"As the Commission's Third Progress Report makes clear," says Clifford Chance. "the implementation of these proposals is hindered by the insistence by certain member states that the fiscal harmonisation aspects of liberalisation in this sector be examined in parallel. In January 1987, a proposal was made by the Commission covering these aspects. This should improve prospects for progress."
The date 1992 really means 31 December 1992, Clifford Chance points out. It is a dynamic process that will continue beyond 1992.
Anyone requiring a copy of a Clifford Chance publication should contact the publications department, London, tel: 01 600 0808.