Legal Business Forms & Company Group Structures

Legal Business Forms Company Group Structures CESL Beiijng(Module E) Dr. S.F.G. Rammeloo, Law Faculty, maastricht University Netherlands(Edition- April 2013) Universiteit Maastricht

Legal Business Forms & Company Group Structures CESL Beiijng (Module ‘E’) Dr. S.F.G. Rammeloo, Law Faculty, Maastricht University - Netherlands (Edition - April 2013)

Business Forms company groups -Treatment plan Std basics business formats national law EU ms Mnd-eU law harmonizing national company laws Companies crossing borders-Freedom of establishment Single Market EU Tsd -Company groups domestic and cross-border mergers divisions (eu law and national law) Wansd -Company groups: national law concepts EU MS laws, EU law concepts EEIG and SE Universiteit Maastricht

Business Forms & Company Groups -Treatment Plan Std Basics business ‘formats’; national law EU MS Mnd - EU law harmonizing national company laws… - Companies crossing borders - Freedom of establishment Single Market EU Tsd - Company groups, domestic and cross-border mergers; divisions (EU law and national law) Wdnsd - Company groups: national law concepts EU MS laws; EU law concepts: EEIG and SE

Business conduct-(European) Single Market Universiteit Maastricht

Business conduct - (European) Single Market

Business formats., company groups i Business formats stand alone A National law borne Sole trader Partnerships Limited liability companies(incl. single-member companies) Other.?(cf. Trust, Treuhand, foundation) B EU law borne II Business formats embedded in group structure National law and EU law concepts Universiteit Maastricht

Business formats…; company groups I Business formats – stand alone… A National law ‘borne’ • Sole trader • Partnerships • Limited liability companies (incl. single-member companies) • Other…? (cf. Trust, ‘Treuhand’, foundation) B EU law ‘borne’ II Business formats embedded in group structure National law and EU law concepts

Business - Zooming out . Global scale developments US, the end of the year 2008: Ford Motors on salary caps and new initiatives, cf same rise for employees at shop floor level US,2009, GM General Motors. . or Government motors. . NL, July 9 2010: Dutch Hoge Raad(Supreme Court) ASMI Stakeholder v Shareholders value? Common Law- versus Rhine delta(cf. Germany)? Sweden/NL, January 2010: SAAB taken over by spyker. By (cf Volvo! Chinese or ultimately by turkish investors (February 2012- another failed attempt)? Universiteit Maastricht

Business – Zooming out... Global scale developments • US, the end of the year 2008: Ford Motors on salary caps and new initiatives, cf. same rise for employees at shop floor level • US, 2009, GM: General Motors..., or Government Motors...? • NL, July 9 2010: Dutch Hoge Raad (Supreme Court) ASMI: Stakeholder v. Shareholders value? Common Law – versus Rhine Delta (cf. Germany)? • Sweden/NL, January 2010: SAAB taken over by Spyker... By (cf. Volvo!) Chinese..., or ultimately by Turkish investors (February 2012 – another failed attempt)?

Companies operating in an ever globalizing world Forget about europe Autumn 2010 Organon pharmaceutics NL, local shop' closed and outsourced' by Us parent company MSD Autumn 2010- today . Chinese enterpreneurs are coming.. Draka NV, Netherlands listed public limited company(high tech wire industries), targeted by European investors' and by Xinmao China but at the end of the day, January 2011, the Italians (Prysmian) came, saw and conquerred Sept 2012: 8th EU-China Business summit(Brussels) http://www.businesseurope.eu/content/default.asp?Pageid=752 Universiteit Maastricht

Companies operating in an ever globalizing world... ‘Forget about Europe...!’ • Autumn 2010 Organon, pharmaceutics NL, ‘local shop’ closed and ‘outsourced’ by US parent company MSD... • Autumn 2010 – today... Chinese enterpreneurs are coming...! - Draka NV, Netherlands listed public limited company (high tech wire industries), targeted by European ‘investors’ and by Xinmao, China... - but at the end of the day, January 2011, the Italians (Prysmian) came, saw and conquerred... • Sept 2012: 8th EU-China Business summit (Brussels) http://www.businesseurope.eu/Content/Default.asp?PageID=752

Business Zooming in on Europe again The financial crash 2008 -European responses EBA: European Banking authority(London) EIOPA: European insurance and occupational pensions Authority( Frankfurt) ESMA: European Securities and Markets authority( Paris) ESRB: European Systemic Risk Board (Frankfurt Universiteit Maastricht

Business – ‘Zooming in’ on Europe again... The ‘financial crash 2008’ – European responses • EBA: European Banking Authority (London) • EIOPA: European Insurance and Occupational Pensions Authority (Frankfurt) • ESMA: European Securities and Markets Authority (Paris) • ESRB: European Systemic Risk Board (Frankfurt)

Entrepreneurship- Economic Drives How to reconcile opposing interests? By formalizing business activities how to get business on track? how to balance interests Contractual cooperation by making use of partnership: either as partners behind closed doors or in public Universiteit Maastricht

Entrepreneurship - Economic Drives How to reconcile opposing interests? By ‘formalizing’ business activities - how to get business on track? - how to balance interests? Contractual cooperation by making use of partnership: - either as partners ‘behind closed doors’ - or ‘in public’

Potential stand alone business formats 1 Sole entrepreneurship(Einmanngeschaft; eenmanszaak, sole proprietaire) Advantages Easy and cheap formation Easy to control Distribution of profits Easy to dissolve rather than double taxation' at company shareholder ly r Beneficial tax law regime owner subject to tax income ol level Universiteit Maastricht

Potential ‘stand alone’ business ‘formats’ 1 ‘Sole entrepreneurship’ (Einmanngeschäft; eenmanszaak, sole propriétaire) Advantages: • Easy and cheap formation • Easy to control • Distribution of profits • Easy to dissolve • Beneficial ‘tax law regime’ owner subject to tax income only, rather than ‘double taxation’ at company + shareholder level

Potential stand alone business formats 1 Sole entrepreneurship(Einmanngeschaft; sole proprietaire Disadvantages: Un limited liability for business conduct Limited financial resources Joined powers with other investors hardly possible Continuity of business entity thwarted Since dec, 10, 2010: Art. L 526-6 et seg French Code de commerce: owner of an Entreprise Individuel a Responsabilite Limitee (EIRL) liable with property affected to the business only Universiteit Maastricht

Potential ‘stand alone’ business ‘formats’ 1 ‘Sole entrepreneurship’ (Einmanngeschäft; sole propriétaire) Disadvantages: • Unlimited liability for business conduct • Limited financial resources • Joined powers with other investors hardly possible • Continuity of business entity thwarted – Since Dec. 10, 2010: Art. L 526-6 et seq. French Code de Commerce: owner of an Entreprise Individuel à Responsabilité Limitée (EIRL) liable with property ‘affected’ to the business only