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Societas Unius Personae (SUP): what’s in it for SMEs?

Association of Chartered Certified Accountants

4 min read Partner content

Main objectives of the proposal for a Directive on single-member private limited liability companies (SUP) welcomed, but safeguards needed, say experts.

Speakers at a conference jointly organised in Brussels by UEAPME, ACCA (the Association of Chartered Certified Accountants) and BUSINESSEUROPE recently welcomed the objectives of the SUP proposals, but also cautioned that a number of safeguards need to be put in place before its introduction.

In April 2014, the European Commission, as part of its package on corporate governance and company law, published a proposal for a directive on single-member private companies with limited liability, called the Societas Unius Personae (SUP). This aims to make it easier and less costly to establish companies across the EU and facilitate cross-border trade.

This proposal is currently being discussed in the European Parliament and in the Council, so in this context UEAPME, ACCA and BUSINESSEUROPE organised their conference to raise further awareness on this initiative and discuss the way it should be carried forward.

Jason Piper, ACCA Business Law Manager, who moderated the debate, said: “Our conversation revealed that the overarching goals of the SUP, which are encouraging entrepreneurship and exploiting untapped opportunities through a simplified, cost-effective and transparent mechanism aimed at creating employment and stimulating economic growth, are unanimously commended. Similarly, there is a majority of views in favour of bringing businesses into the digital era. However, the discussions also revealed divergent views, as well as some concerns, regarding the concrete implementation of certain elements of the proposal.”

The main issues at stake include:

·       the legal basis of the proposal

·       the scope of the proposal with several attendees indicating that the scope should be limited to SMEs, or even to micro and small entities

·       the online registration including a uniform template for articles of association. All speakers were in favour of the principle, but called for safeguards regarding the verification of the single shareholder's identity   and integrity

·       the minimum share capital of 1 EURO which some thought should be higher and that member states should be allowed to oblige companies to build reserves.

·       Regarding the questions of the separation of seats, distribution of benefits, and labor rights, it was largely felt that these subjects should be left to subsidiarity.

Luis de Grandes Pascual, MEP, rapporteur on the issue for the JURI Committee, said in his video message: “I firmly believe that this is a project with EU-added value. However, we will combine whatever is necessary to harmonise this EU-added value and leave to subsidiarity what is not necessary. And this goes hand-in-hand with the Juncker Commission’s idea that we should respect subsidiarity when the Member States are better prepared to do so.”

Marlene Mizzi, MEP, opinion rapporteur in the IMCO Committee, said:

“I would like to encourage a healthy debate on this issue. Opinions will differ, as stakeholders have different interests. I am all for simplification and cost reduction of current systems in order to encourage more business activities. But we must be careful not to encourage quantity at the cost of quality and find that companies who have been lured into cross-border activities because it had been made so easy, do not find themselves insolvent a few months later, leaving creditors and employees high and dry. It seems that we might want to arrive at the same destination, but we might want to use different routes. What I want to ensure is that there will be no casualties resulting from the routes chosen.

Luc Hendrickx, Director Enterprise Policy and External Relations at UEAPME, said: “Apart from reducing costs and red tape, the proposal should encourage the creation of healthy and sustainable SMEs, along with the development of tailored, professional advice for the SME. The provisions on a minimum capital should ensure that the SUP becomes a trusted company statute. We also need a European system of verification for the registration of the company.”

Ivan Štefanec, MEP, shadow rapporteur for the EPP in the IMCO Committee, stressed that: “The objectives of the SUP directive reflect the priorities of the Junker Commission’s plan. It will offer great opportunities in terms of simplification of procedures, transparency, reduction of costs and facilitation of the cross-border activities of SMEs on the Internal Market. In addition, the SUP initiative could contribute to the creation of growth and job opportunities in the EU and respond to the challenges of the Digital Age. The unemployment of young people is a very serious issue in Europe. The best way to support young people is to break the barriers and promote tools like SUP.”

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