European private company

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The European Private Company ("Societas Privata Europaea"-SPE) is a European legal form intended to facilitate the establishment and operation of small and medium sized enterprises (SMEs) in the European single market and to promote their development in the European Union At the same time, it will benefit larger groups in organizing their subsidiaries abroad.
It is currently based on the proposal of the EU commission for a Council Regulation on the Statute for a European Private Company(SPE) presented in June 2008.
There is no restriction on the formation of the SPE. It may set up by one or more founders, natural persons and/or companies or firms under Article 48 of the EC Treaty. In addition, an SE ,a European Co-operative Society ,a European Economic Interest Grouping or another SPE may also take part in the formation of an SPE.
The SPE can be formed ex nihilo by one or several natural persons and/or legal entities. It may also be formed by transforming, merging or dividing existing companies. The later can have a statute governed by national or Community law, such as those recorded as being a European Company (Societas Europeaea) or SE.
The name of any European Private Company must be followed by the abbreviation "SPE.
In order to facilitate start- ups ,the Legal Affairs of the European Parliament agrees with the lighter approach that suggest two amendments :first, - 1 minimum capital requirement shall only be sufficient for SPEs which apply the "solvency test", otherwise the minimum capital shall be at - 8.000.Secondly, in order to establish an SPE, a cross border component is required. This can be through a corresponding business object ,or by the founding members, or the central office and registered place of administration ,being located in different Member States(Opinion 2008/0130(CNS)of 5 November 2008)
Seat of the company
An SPE shall have its registered office and its central administration or principal place of business in the territory of the Member States However ,in accordance with the Centros judgment of the European court of Justice ,the SPE may be set up with its registered office and central administration or principal place of business in different Member State. Shareholders may also decide to transfer the registered office of the company to another Member State.
The registered office and the central administration or main establishment of the SPE are established in the European Community. The company is registered in the Member State in which the statutory registered office is located. Its subsidiaries are governed by the national law where they are established. An SPE is not bound to establish its central administration or main establishment in the Member State in which the registered office is located. Administrative formalities and registration costs must be reduced as much as possible.
The registered office of the SPE may be transferred to another Member State, without having any consequences on the legal personality or on the rights and obligations created by contracts concluded previously. The transfer takes effect on the date of registration in the host Member State.
The advantages of the SPE are the following: 
- it exists in all Member States 
- it is a flexible yet transparent company form 
- it allows entrepreneurs to set up all their companies and/or their subsidiaries with the same management structure, regardless where they are located 
- it offers a European label that is easily recognizable throughout the EU.
These features allow entrepreneurs to save time and reduce costs, especially legal costs related to setting up different company forms in different Member States.

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