Contents
| Introduction |
| 1.
About EEIGs
|
| 2.
How to register
an EEIG |
| 3.
Further Information |
This
is a guide only
and should be
read with the
relevant legislation.
|
Introduction
This booklet explains
the main features
of European Economic
Interest Groupings
(EEIG). It tells
you what information
is required to be
registered at Companies
House when a grouping
is:
- being formed
in the UK;
- moving its official
address to the
UK from another
European Member
State; or
- establishing
a UK office but
retaining its
official address
outside the UK.
This
booklet also tells
you when notice
of changes to the
grouping's particulars
has to be delivered
to Companies House,
which forms to use
and where to get
them.
This booklet is
intended as an introductory
guide only. If you
are considering
forming an EEIG,
please refer to
the legislation
governing EEIGs,
or seek specialist
legal advice. You
will find the relevant
law in Statutory
Instrument 1989/638
covering Great Britain
and Statutory Rules
of Northern Ireland
1989/216 - see chapter
3.
Back to top
CHAPTER 1
About EEIGs
EEIGs are designed
to help businesses
establish and maintain
links with firms
in other Member
States. For businesses,
and smaller firms
in particular, other
development options
- mergers, take-overs,
joint ventures -
may be too expensive
and complicated.
The EEIG provides
an alternative way
to establish links
in other Member
States without losing
individual identity
and independence.
The
EU Regulations
(see chapter
3) require
and permit
Member States
to make certain
provisions
under national
law in respect
of EEIGs.
As a result,
there are
some differences
in the laws
of Member
States in
areas such
as legal capacity,
the managers
and auditing
requirements.
The information
given here
only covers
EEIGs registered
in the UK. |
1. What
is an EEIG?
The EEIG is a form
of association between
companies or other
legal bodies, firms
or individuals from
different EU countries
who need to operate
together across
national frontiers.
It carries out particular
tasks for its member-owners
and is quite separate
from its owners'
businesses. Its
aim is to facilitate
or develop the economic
activities of its
members.
An EEIG may be set
up in any one of
the Member States,
and operate in any
part of the EU.
It can also enter
into arrangements
with organisations
outside the EU,
although these organisations
cannot themselves
become members of
an EEIG.
2. What
can an EEIG do?
An EEIG's activities
must relate to the
economic activity
of its members but
must be ancillary
to them. The concept
of 'economic activity'
can be interpreted
very widely. For
example, universities
and research institutes
may participate
in an EEIG. The
creation of an EEIG
between people in
the professions
(for example, solicitors)
is also permitted.
However, professional
people will need
to consider whether
or not participation
in an EEIG would
be contrary to the
rules of their profession.
The Grouping may
not itself practice
a profession - as
this would replace
the activities of
the members - but
it may provide services
for its members
which relate to
their profession
(for example, consultation
on legal matters).
Apart from this,
and the restrictions
set out under question
3, the EEIG can
do whatever its
members wish. For
example, companies
in the UK, Spain
and France might
form an EEIG to
carry out scientific
research in an area
of common concern;
or firms in Portugal
and Scotland might
use an EEIG to create
a joint marketing
operation for a
new range of products;
or lawyers in England,
Denmark and Germany
could join together
to pool information.
3. What
can't an
EEIG do?
An EEIG cannot:
-
be
formed with
the object of
making a profit,
although it
may do so as
a consequence
of its normal
operations;
-
exercise
management control
over its members
own activities
or those of
any other undertaking;
- hold shares
in any of its
members;
- take investment
from the public;
- be a member
of another EEIG;
- employ more
than 500 people;
-
be
used to make
loans to a company
director or
any person connected
with him or
her where that
would be restricted
or controlled
by national
law;
-
be
used for the
transfer of
any property
between a company
and a director,
or any person
connected with
him or her,
except to the
extent allowed
by national
law.
4.
What are the advantages
of an EEIG?
An EEIG enjoys several
advantages including
'legal capacity'
- the right to enter
into contracts and
to sue (or be sued)
- and tax transparency
(see question 15).
Further, members
have flexibility
regarding the method
of financing the
Grouping. For example,
when smaller firms
or non-profit making
organisations are
involved, their
contribution may
be in the services
and skills they
can provide. There
is no capital requirement
for an EEIG. Members
may vary their funding
methods, rights
and obligations
by contract so that
the Grouping can
develop. And, since
an EEIG may not
hold shares in its
members, nor exercise
any management control
over them, it works
for the members,
not vice versa.
5. What
are the disadvantages?
The price to pay
for the lack of
a capital requirement
is unlimited joint
and several liability
of the members.
This means that
not only is there
no limit to the
financial liability
of any of the members
for the activities
of the EEIG, but
also that each member
can individually
be held liable for
those activities.
If no provision
were made for this
responsibility,
third parties might
not have the confidence
to sign contracts
with the EEIG. In
addition, whilst
an EEIG may, for
example, be funded
from members' funds,
by raising share
capital from its
members, or by bank
loans, it cannot
seek funds from
the public or buy
a share in another
EEIG.
6. How is
an EEIG structured?
An EEIG is set up
in much the same
way as a company.
It must be formed
by at least two
members from different
Member States, and
a manager or managers
must be appointed
to operate the EEIG
on a day-to-day
basis.
7. Who may
be a member of an
EEIG?
The Regulations
aim to make membership
of an EEIG open
to as many people
and organisations
as possible within
the Union. The main
requirement is that
each member should
have been engaged
in an economic activity
in the EU before
becoming a member
of the EEIG.
8. Is there
a nationality requirement?
An EEIG must have
at least two members
with their central
administrations
or principal activities
based in different
Member States.
To be eligible for
membership, companies,
firms and other
legal bodies must:
-
have been formed
according to
the law of one
of the Member
States and have
their registered
or statutory
office (if applicable)
within the EU;
and
-
have
their central
administration
(that is, their
place of central
management and
control) within
the EU.
Individuals
may become members
if they carry on
any industrial,
commercial, craft
or agricultural
activity or provide
professional or
other services in
the EU.
Organisations from
non-EU countries
may not become members.
9. What
is the role of the
members?
The members decide
how the EEIG will
be run. Normally
this will be set
out in the formation
contract of the
EEIG, but there
is no requirement
that this must be
so. There is no
requirement for
regular meetings
or for decisions
of the members to
be taken only at
meetings: all communication
may be by fax, telephone
or video-conferencing
if the members so
desire.
Each member has
at least one vote.
The contract of
formation can give
more than one vote
to certain members
(for example, if
one member has subscribed
a greater share
of the capital or
expertise), provided
that no one member
holds a majority
of the votes.
The members are
free to decide the
voting procedures
to be set down in
the contract of
formation except
for certain decisions
fundamentally affecting
the existence and
operation of the
EEIG, for which
unanimous decisions
are required. The
decisions requiring
unanimity are:
- alteration of
the objects of
the grouping;
- alteration of
the number of
votes allotted
to each member;
- extension to
the duration of
the grouping;
- alteration to
members' contributions
to the grouping's
financing;
- alteration to
members' obligations,
unless otherwise
provided by the
formation contract;
-
alteration
to the formation
contract not
covered above,
unless otherwise
provided by
the contract
itself; and
-
transfer
of the official
address of an
EEIG to another
Member State.
10.
What is the role
of the managers?
The members appoint
managers who run
the EEIG and make
normal daily decisions.
At least one manager
must be appointed.EEIGs
registered in the
UK may appoint legal
persons (for example,
a company incorporated
under the Companies
Act) as managers,
provided that an
individual is then
registered as the
manager's representative.
The members determine
the limits of the
managers' powers.
The actions of the
managers are binding
on the EEIG and
the members are
jointly liable for
those actions. The
only limitation
that can be applied
to the managers
by the members in
this respect is
that of the 'double
signature'. This
means that the EEIG
is only bound by
the joint action
of two or more managers.
If this control
device is used it
will be effective
only if its existence
is published in
the appropriate
Gazette - see question
5 in chapter 2.
11. Does
an EEIG have legal
personality?
An EEIG registered
in the UK is accorded
legal personality
as a 'body corporate'
from the date shown
on its certificate
of registration.
12. What
competition rules
apply to EEIGs?
EEIGs are not exempt
from EU or domestic
competition laws.
They are subject
to control under
Articles 85 and
86 of the Treaty
of Rome and to national
competition legislation
in the same way
as any other undertaking.
For more information
contact the Office
of Fair Trading,
Field House, Breams
Buildings, London
EC4A 1PR.
13. How
is an EEIG funded?
The members of the
EEIG are not required
to subscribe any
capital. The grouping
can be financed
by capital invested
by the members or
by loans or donations
from them or others.
The contribution
of some members
may be in the form
of the services
and skills that
they can provide.
EEIGs may not seek
investment from
the public.
14. Are
grants available
for EEIGs?
There is nothing
to stop an EEIG
from bidding for
EU or Government
funds. However,
there are no special
grants available
specifically for
EEIGs.
15. What
taxation rules apply
to EEIGs?
Taxation operates
under a system of
fiscal transparency;
that is to say,
any profits, losses
or gains are shared
between the members
according to their
shares. These are
then taxed in the
hands of the members
according to the
relevant national
law in the normal
way. The provisions
for taxation of
EEIGs in the UK
are given in the
Finance Act 1990,
Schedule 11.
16 How do
they work?
For the purposes
of taxation, a grouping
is regarded as acting
as the agent of
its members: its
activities are those
of its members acting
jointly, and each
member is regarded
as having a share
of the property,
rights, liabilities
and profits of the
EEIG. The portion
of profits, losses
or gains going to
each member is determined
by the formation
contract where this
is stated. If the
contract says nothing
the members are
apportioned equal
shares. The shares
of property, rights
and liabilities
are determined in
the same way.
Returns, accounts
and information
are given by the
EEIG acting through
its managers. The
members of the grouping
are jointly and
severally liable
for any acts or
omissions relating
to the taxation
provisions.
The concept of tax
transparency does
not extend to other
taxes such as VAT
and stamp duty.
An EEIG will have
to register for
VAT purposes if
it makes taxable
supplies in excess
of the registration
limits, in the same
way as any other
person.
17. What
are the accounting
requirements?
The EEIG is not
subject to any accounting
or auditing requirements,
and therefore does
not have to file
an annual return
with Companies House.
It is, however,
required to make
a return to the
Inland Revenue.
Back to top
CHAPTER 2
How to register
an EEIG
1. Can I
register an EEIG
in any EU Member
State?
An EEIG must be
registered in the
Member States of
the EU where its
'official address'
is situated. The
official address
must be either:
2.
Where do I register
an EEIG in the UK?
If the grouping's
official address
is to be in England
or Wales it must
register with:
The Registrar of
Companies for England
and Wales
Companies House
Crown Way
Cardiff
CF14 3UZ
If the grouping's
official address
is to be in Scotland
it must register
with:
The Registrar of
Companies for Scotland
Companies House
37 Castle Terrace
Edinburgh
EH1 2EB
If the grouping's
official address
is to be in Northern
Ireland it must
register with:
The Registrar of
Companies for Northern
Ireland
IDB House
64 Chichester Street
Belfast
B11 4JX
EEIGs in Northern
Ireland are subject
to separate but
similar implementing
legislation to those
registered in Great
Britain - see chapter
3.
3. Is there
an obligation to
register in other
Member States if
the EEIG also has
activities there?
If a UK-registered
EEIG opens an establishment
in another Member
State that establishment
must be registered
in that State.
The same applies
in reverse: if a
grouping opens an
establishment in
the UK but has its
official address
in another Member
State it must register
in that part of
the UK where the
establishment is
situated.
4. Can the
official address
be transferred from
one Member State
to another?
Yes. The official
address may be transferred
within the Union.
If the transfer
is to another Member
State a transfer
proposal must be
drawn up and filed
with Companies House.
No decision to transfer
may be taken until
2 months after the
proposal has been
published.
5. What
information must
be published?
The formation and
termination of an
EEIG must be published
in the London, Edinburgh
or Belfast Gazette
(as appropriate)
and then, within
one month, in the
Official Journal
of the European
Union. In addition,
various changes
and other events
must also be published
in the Gazette.
The full list of
these is set out
in Articles 8 and
14 of the Regulations
- see chapter
3.
In the UK, the responsibility
for publication
of these particulars
has been placed
on the Registrar
of Companies.
If an EEIG is transferring
its official address
to another Member
State, the registry
there will require
evidence that the
proposal to transfer
has been published.
It is the EEIG's
responsibility to
obtain a copy of
the relevant Gazette,
which can be obtained
from:
| The
London Gazette |
The
Edinburgh Gazette |
| HMSO
Publications |
The
Stationery Office |
| 51
Nine Elms Lane |
73
Lothian Road |
| London
SW8 5DR |
Edinburgh
EH3 9AW |
| |
| The
Belfast Gazette |
| The
Stationery Office |
| 16
Arthur Street |
| Belfast
BT1 4GD |
6. What
name can I give
the grouping?
EEIGs must include
either 'European
Economic Interest
Grouping' or 'EEIG'
in their name. The
name cannot include
any of the following:
'limited', 'unlimited'
or 'public limited
company', their
abbreviations or
their Welsh equivalents.
With this exception,
substantially the
same rules and restrictions
on names apply for
EEIGs registered
in the UK as for
companies formed
and registered under
the Companies Act
1985. For further
information see
our booklet, 'Company
Names'.
7. What
is required for
registration?
There are 3 different
registration possibilities:
(i) A new EEIG which
is to have its official
address in the UK
must submit to the
appropriate registrar:
- Form EEIG1;
- the contract
of formation;
and
- if the contract
is not in English,
a certified translation.
(ii)
An existing EEIG
that is transferring
its official address
from another Member
State to the UK
must submit to the
appropriate registrar:
(iii)
An existing EEIG
which is setting
up an establishment
in the UK but which
will continue to
have its official
address outside
the UK must submit
the following documents
to the appropriate
registrar:
8.
What does the formation
contract have to
say?
The contract of
formation must,
as a minimum, contain
the following information
about the EEIG:
- its full name
- see question
6;
- its official
address;
- the objects
for which the
grouping was formed;
- the names, business
names and legal
form of each member;
- the permanent
address or registered
office of each
member;
- the number and
place of registration
(if any) of each
member; and
- the duration
of the EEIG, except
where this is
indefinite.
9.
Do any other documents
have to be registered?
After the EEIG is
registered, certain
other additional
documents and details
must also be filed.
These are:
-
Notice
of the appointment
and removal
of managers.
In Great Britain
use Form EEIG3
where the official
address is in
Great Britain,
and Form EEIG4
where it is
elsewhere. In
Northern Ireland
use Form EEIG3
where the official
address is in
Northern Ireland,
and Form EEIG4
where it is
elsewhere.
- Form EEIG4 must
also be used to
file the following
documents and
particulars:
-
Form
EEIG5 must be
used to file
notice of the
| 
