Same principles wrapped in a new coat?
Notwithstanding the drastic changes to company law in the CAC, the three existing European company forms, including the European Cooperative Society (‘SCE’) remain untouched. The reason is that the European company forms originate from existing EU legislation.
Consequently, the CAC has left the European Company (SE), the European Cooperative Society (SCE) and the European Economic Interest Grouping (EEIG) almost fully intact.
The abbreviation SCE stems from the Latin name ‘Societas Cooperativa Europaea’. SCEs are, in essence, cooperative societies whose main characteristic is their internal democracy, which is reflected in observance of the ‘one member, one vote’ principle. This company form was created specifically to enable the development of cross-border activities (of existing cooperative societies) and the formation of European cooperatives. It facilitates the establishment on a European scale of new cooperative companies of natural or legal persons.
Formation of SCEs
This aspect has not changed under the CAC.
Just like a BV/SRL (private limited company), a CV/SC (cooperative society) and an NV/SA (public limited company), SCEs must be incorporated by public deed, failing which they are void. Consequently, amendments to the articles of association have to follow the same procedure of authentication as the deed of incorporation. Nevertheless, SCEs acquire legal personality from the day of their entry into the legal persons register.
Choices concerning management
The option of choosing either a one-tier or a two-tier management structure for SCEs also remained unchanged under the new CAC. The chosen management structure must be included in the SCE’s articles of association.
If the SCE opts for a one-tier board structure consisting of one unified board of directors, the rules concerning the management of Cooperative Societies (CV/SC) apply analogously. In that case the SCE may be managed by one or more managers – the minimum requirement of three managers no longer applies.
If the SCE opts for a two-tier board structure comprising a supervisory board and a management board, the rules concerning two-tier management that are applicable to public limited companies (NV/SA) apply analogously. In SCEs operating with a two-tier board, the management board has full mandate to exercise the SCE’s general policy, strategy, and all acts essentially reserved to the board of directors. Supervision of the management board is vested solely in the supervisory board. The supervisory board may not interfere with the management of the SCE in any way. Furthermore, the supervisory board cannot represent the SCE in respect of third parties – such representation is reserved to the management board. However, the supervisory board is allowed to represent the SCE in respect of the management board or its members in disputes as well as for entering into agreements.
The articles of association may detail which acts from the management board require approval from the supervisory board.
Voting rights: 1 share, 1 vote
Contrary to the former Belgian Companies Code, the new CAC provides explicitly that in principle and regardless of the number of shares held, each shareholder has one single vote. However, just like the former Companies Code, the CAC provides that depending on the nature of the SCE (e.g. SCEs active in the financial or insurance industry), the articles of association may derogate from this rule.
Relocation of the registered office
Analogous to the former provision, proposals for relocating the registered office must be filed and published in accordance with the CAC’s general disclosure formalities applicable to Belgian legal persons.
Converting SCEs to Cooperative Societies; modalities
As in the past, an SCE may be converted into a cooperative society in accordance with the laws of the Member State where it has its registered office.
Mergers of SCEs
In the new CAC, the option of approving mergers without the approval of the general meeting is extended to SCEs.
The former Belgian Companies Code already enabled public limited companies (NV/SA) to carry out a merger without the necessity of obtaining approval from the general meeting of the purchasing company, if the latter held at least 90% (but not all) of the shares and other securities with voting rights at the general meeting in the purchased public company and provided that certain other conditions were met.
Under the new CAC, this possibility is now extended to the private limited company (BV/SRL), the cooperative society (CV/SC), the European society (SE) and the European cooperative society (SCE).
Our next edition will focus on Book 17: European political parties and European political foundations.