Shareholding of Companies

Shareholding of Companies in Europe

Requirements relating to the shareholding of companies in relation to the E.U. Services Directive

The following is an examination of requirements relating to the shareholding of companies regarding the European Union Servicies Directive [1]:

Requirements relating to the shareholding of companies: Requirements subject to evaluation

Article 15(2)(c) refers to requirements relating to the shareholding of companies. Such requirements include, for instance, obligations to hold a minimum amount of capital. They also encompass requirements to have a specific qualification in order to hold share capital. For example, as regards certain services provided by members of a regulated profession and carried out through a company, Member States sometimes require that the entire capital or a relevant part of it be directly owned by members of that profession.

In many cases Member States should be able to replace requirements to hold a minimum amount of capital by less restrictive arrangements. In particular, the ECJ has considered that such a requirement could not be justified by reasons relating to the protection of creditors, since less restrictive measures, for example obliging the provider to lodge a guarantee or to take up insurance, may be sufficient to attain the same objective95. Moreover, in other cases, imposing on the operators certain transparency and information requirements might also be deemed sufficient to protect creditors.

In the same way, requirements to have a specific qualification in order to hold share capital may not be justified in some cases because the same objective can be achieved by less restrictive measures. Thus, in a case concerning the establishment of opticians, the ECJ found that imposing a given level of participation of opticians in the share capital was not proportionate for attainment of the objective of protecting public health96. As the ECJ pointed out on this occasion, the high quality and professionalism of the service may often be ensured by measures that are less restrictive to the freedom of establishment, for example by requiring the physical presence of qualified, salaried or associate, professionals in each shop, by applying rules concerning civil liability for the action of others or national rules requiring professional liability insurance.

Resources

Notes

  1. Information on requirements relating to the shareholding of companies based on the EU Services Directive Handbook, UK Government

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