Experience with the SE in Germany

Abstract

referred to throughout as 'the SE Regulation'. Further information on those European Acts can be found in the precedent speech of Mrs. Lenoir. 3 Directive 2001/86/EC, OJ L 294/22, 10.11.2001, referred to throughout as 'the SE Directive'. 4 Winding-up, liquidation, insolvency and suspension of payment and the taxation of corporations are to a large measure governed by national law. Besides, important issues of governance and minority and creditors' rights are governed by national law: Procedure of the review of the exchange-ratio in a formation of an SE (Sec. 6, 11 SEAG) and appraisal-right (Sec. 9 SEAG), other forms of protection of minority and creditors rights in a merger (Sec. 7, 8 SEAG), certain (pre-)registration formalities (Sec. 10(2) SEAG of the German Transformation Act) and see Wicke, MitBayNot 2006, 196, 203 et seq. for the application of national law in a general meeting. 5 See for all precedent data: J. Schmidt, '"Going European" -Die Europäische Aktiengesellschaft (SE) als attraktive Rechtsformalternative', in W. Bayer (ed.), Die Aktiengesellschaft im Spiegel der Rechtstatsachenforschung, 2007, pp. 51, 56 et seq.

The Economic Impact of Forming a European Company

“…(), who conjecture that companies that can choose the one‐tier board structure should incur lower direct costs because only a single corporate body is involved. Moreover, the level of board‐level worker participation not only has to be negotiated ex ante under the legal form of the SE, the pre‐existing level of worker participation most often also remains unchanged ex post because the SE is not subject to the enhanced worker participation requirements stipulated under national law (Eidenmüller et al ., ; Reichert, ). Hence, companies just below a certain national size threshold to be eligible for enhanced worker participation may freeze the current extent or even the non‐existence of worker participation at the board level by using the SE.…”

“…While a recent body of academic literature has emerged on the SE, many questions remain open, especially with regard to the economic and financial impact of forming an SE. Without formally testing its impact, legal scholars have argued that an important reason for reincorporating into an SE is legal arbitrage (Eidenmüller et al ., ; Enriques, ; Reichert, ). Companies located in countries with legal rules that are particularly favourable to worker representation may choose to become an SE as a way to restrict board‐level worker participation that is otherwise mandatory under national co‐determination laws.…”

The Economic Impact of Forming a European Company

“…The Economic Impact of Forming a European Company Eidenmüller et al (2009), who conjecture that companies that can choose the one-tier board structure should incur lower direct costs because only a single corporate body is involved. Moreover, the level of board-level worker participation not only has to be negotiated ex ante under the legal form of the SE, the pre-existing level of worker participation most often also remains unchanged ex post because the SE is not subject to the enhanced worker participation requirements stipulated under national law (Eidenmüller et al, 2009;Reichert, 2008). Hence, companies just below a certain national size threshold to be eligible for enhanced worker participation may freeze the current extent or even the nonexistence of worker participation at the board level by using the SE.…”

“…While a recent body of academic literature has emerged on the SE, many questions remain open, especially with regard to the economic and financial impact of forming an SE. Without formally testing its impact, legal scholars have argued that an important reason for reincorporating into an SE is legal arbitrage (Eidenmüller et al, 2009;Enriques, 2004;Reichert, 2008). Companies located in countries with legal rules that are particularly favourable to worker representation may choose to become an SE as a way to restrict board-level worker participation that is otherwise mandatory under national co-determination laws.…”

Worker Directors: A German Product that Did Not Export?

“…Although some German companies close to the employment threshold for introduction of (quasi) parity‐based codetermination have set up SEs with a single board of directors not including employee representatives, none of the large public limited companies in Germany that have turned themselves into SEs (e.g., Porsche, BASF, and Allianz) has deviated from (quasi) parity representation of shareholders and employee representatives 4 . On the other hand, among other flexibilities provided for by the legislation, most companies have streamlined (i.e., reduced the size of) their supervisory boards (see, in particular, Reichert 2008).…”