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Bilateral screening meeting on Company Law 16 November 2010

Bilateral screening meeting on Company Law 16 November 2010. Incorporation of European company law into Icelandic legislation. Initial incorporation Act on Public Limited Companies, No. 2/1995 Act on Private Limited Companies, No. 138/1994 Act on Annual Accounts, No. 144/1994

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Bilateral screening meeting on Company Law 16 November 2010

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  1. Bilateral screening meeting on Company Law 16 November 2010

  2. Incorporation of European company law into Icelandic legislation Initial incorporation Act on Public Limited Companies, No. 2/1995 Act on Private Limited Companies, No. 138/1994 Act on Annual Accounts, No. 144/1994 Act on the European Economic Interest Grouping, No. 159/1994

  3. Incorporation of European company law into Icelandic legislation Amendments Dir. 92/101 (own shares, etc.): Act 2/1995 Dir. 2003/58/EC (website and electronic registration): Acts 35/1997 and 43/2008 Dir. 2004/913/EC (remuneration in general): Act 89/2006 Dir. 2005/56/EC (cross-border merger): Act 54/2007

  4. Incorporation of European company law into Icelandic legislation Dir. 2006/68/EC (capital paym. in cash, simplification): Act 47/2008 Dir. 2007/36/EC (shareholders’ rights): Act 126/2009 Dir. 2007/63/EC (mergers and divisions, simplification): Act 81/2009 Dir. 2009/385/EC (remuneration in general): Act 68/2010

  5. Incorporation of European company law into Icelandic legislation Questions?

  6. Disclosure requirements in respect of (public and private) limited companies (1) • Directive 2009/101/EC on coordination of safeguards within the meaning of the second paragraph of Article 48 of the Treaty • First Council Company Law Directive 68/151/EEC • Act on PLC (2/1995), mainly the section on registration • Art 147 on the register • Art 148 on items to be registerd • Art 9 on the statutes • In the section on boards – Validity obligations

  7. Disclosure requirements in respect of (public and private) limited companies (2) • Directive 2003/58/EC on disclosure requirements • Websites: Act 18/2006 amending Act on PLC (2/1995), Art. 1 • Electronic register: Act 43/2008 amending Act on PLC (2/1995), Art. 147 • Eleventh Council Company Law Directive 89/666/EEC on disclosure requirements of branches • Act on PLC (2/1995) – Section on branches • Contents of letters and order forms – Art. 1

  8. Disclosure requirements in respect of (public and private) limited companies • Questions?

  9. European Economic Interest Grouping • Council Regulation (EEC) No. 2137/85 on the European Economic Interest Grouping (EEIG) • Act 159/1994 on the EEIG

  10. European Economic Interest Grouping • Questions?

  11. Capital maintenance (1) • Second Council Company Law Directive 77/91/EEC on the formation of public limited-liability companies and the maintenance and alteration of their capital • Act on Public Limited Companies, No. 2/1995 • Arts. 4-5 – memorandum of association • Art. 9 – articles of association • Art. 1 – minimum capital requirement • Art. 6 – consideration in cash • Arts. 16-17 – obligation to pay contributions • Art. 84 – the case of serious loss of the subscribed capital • Section on own shares • Art. 104 – advancing of funds, loans, provision of security

  12. Capital maintenance (2) • Council Directive 92/101/EEC amending Directive 77/91/EEC • Act on PLC (2/1995) • Directive 2006/68/EC amending Directive 77/91/EEC • Act 47/2008, amending Act on PLC (2/1995), Art. 6 • Directive 2009/109/EC amending Directives 77/91/EEC ... on reporting and documentation requirements (under preparation)

  13. Capital maintenance Questions?

  14. Domestic mergers of public limited-liability companies (1) • Third Council Company Law Directive 78/855/EEC concerning mergers of public limited-liability companies • Act on PLC (2/1995), section XIV • Art. 119 – types of mergers • Art. 120 – draft terms of merger • Art. 123 – publication of the draft terms of merger • Art. 124 – general meeting of merger companies • Art. 121 – written report • Art. 122 – examination • Art. 124 – documents for inspection by the shareholders • Art. 126 – protection

  15. Domestic mergers of public limited-liability companies (2) • Directive 2007/63/EC amending 78/855/EEC ... on the requirement of an independent expert´s report on a merger • Act 81/2009 amending the section on domestic mergers and divisions in the Act on PLC (2/1995), especially Art. 122 • Directive 2009/109/EC amending 78/855/EEC ... on reporting and documentation requirements in the case of mergers and divisions (under preparation)

  16. Division of public limited-liability companies • Sixth Council Company Law Directive 82/891/EEC on the division of public limited-liability companies • Act on PLC (2/1995), section XIV (Arts. 119-133) • Directive 2007/63/EC amending 82/891/EEC ... on the requirement of an independent expert´s report on a division • Act 81/2009 • Directive 2009/109/EC amending 82/891/EEC ... on reporting and documentation requirements in the case of mergers and divisions (under preparation)

  17. Single-member private limited-liability company • Twelfth Company Law Directive 89/667/EEC, as codified by Directive 2009/102/EC on single-member private limited-liability companies • Act on Private Limited Companies, No. 138/1994 • Similar to rules on public limited companies, except • Arts. 1 and 3 – sole member/founder of a company • Art. 55 – sole member’s exercise of powers • Other differences

  18. Cross-border mergers of public limited-liability companies • Tenth Company Law Directive 2005/56/EC on cross-border mergers of limited-liability companies • Act 54/2007 amending Act 2/1995 and Act 138/1994 • New section, XIV A, on cross border mergers and cross border divisions • Directive 2009/109/EC amending ... Directive 2005/56/EC on reporting and documentation requirements in the case of mergers and divisions (under preparation)

  19. Limited liability companies Questions?

  20. Societas Europea (1) • Council Regulation (EC) No. 2157/2001 on the Statute for a European company • Special law on European companies, No. 26/2004 • Chapter I – general provisions • Art. 1 – the regulation has the force of law in Iceland • Art. 2 – book- keeping and annual accounts • Art. 3 – name • Art. 4 – employee participation (reference)

  21. Societas Europea (2) • Special law on European companies, No. 26/2004 • Chapter II – provisions on establishment • Art. 6 – participation of financial enterprises • Art. 7 - certificate • Chapter III – provisions on establishment • Art. 8 – registration authority • Art. 9 – disclosure of proposals for various decisions

  22. Societas Europea (3) • Special law on European companies, No. 26/2004 • Chapter IV – transfer of registered office • Art. 10 – the right of the Financial Supervisory Authority to oppose a transfer • Chapter V – organization • Art. 20 – number of members in governing organs • Art. 21 – managing director • Arts. 22-23 - supervision

  23. Societas Europea (4) • Special law on European companies, No. 26/2004 • Chapter VI – other provisions, incl. • Art. 27 – appeal • Art. 28 – penalties

  24. European cooperative companies • Council (EC) Regulation No. 1435/2003 on the Statute for a European cooperative society (SCE) • Act on European cooperative societies, No. 92/2006 • Art. 1 – regulation shall have the force of law.

  25. Societas Europea • Questions?

  26. Takeover bids (1) Hreinn Hrafnkelsson, Counsellor, Mission of Iceland to the EU Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids: • Incorporated into Act on Securities Transactions, no. 108/2007 (amended by Act no. 22/2009): Chapter X. Takeovers (Art. 99-111) • Art. 99 Scope: Takeovers of issuers with registered office & shares admitted to trading in Iceland. • Art. 100 Mandatory bid: 30% of voting rights, 4 weeks to make a bid, acting in concert, exemptions. • Art. 101 Voluntary bid: The chapter applies to voluntary bids, offer document must be prepared. • Art. 102 Notification of a bid: Bid must be notified & made public without delay. • Art. 103 Terms of a bid: Highest price paid by offeror last 6 months, bid open 4-10 weeks. • Art. 104 Obligations of directors: Not allowed to take any action that may influence the bid. • Art. 105 Revocation of a bid: Mandatory bids cannot be revoked. • Art. 106 Lapsing of a bid: If justified for legal reason/necessary approval of authorities not obtained. • Art. 107 Amendments to a bid: Bid may be amended if more favourable conditions are offered. • Art. 108 Competing bids: Shareholder may withdraw acceptance of conditional voluntary bid. • Art. 109 Information on bid results: Must be made public within 3 business days. • Art. 110 Right of squeeze-out and sell-out: If the offeror acquires more than 9/10 of voting rights. • Art. 111 Remedies if no bid is made: FSA may cancel voting rights if mandatory bid is not made.

  27. Takeover bids (2) Hreinn Hrafnkelsson, Counsellor, Mission of Iceland to the EU Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids: • Incorporated into the Act on Securities Transactions, no. 108/2007 (amended by Act no. 22/2009): Chapter XI Offer document (Art. 112-114) • Art. 112: Scope of the Chapter: Offer documents made in connection to takeover bids. • Art. 113: Contents of the offer document: Information about the offeror and the bid. • Art. 114: Publication of an offer document: Sent to shareholders& notice in newspapers 4 days before. Other: • Art. 133, 141-148: Supervisory Authority, Surveillance and Sanctions • Act on Official Supervision of Financial Operation, no. 87/1998: Art 13-14: Confidentiality, Professional secrecy and relations with other regulatory authorities. • Act on Annual Accounts, no. 3/2006: Art. 66a: Publication of certain information(Art. 10 of TD) English translation of the Act on Securities Transactions no. 108/2007 (incl. amendments 22/2009): http://eng.efnahagsraduneyti.is/laws-and-regulations//nr/2919 English translation of the Act on Official Supervision of Financial Operation, No. 87/1998: http://eng.efnahagsraduneyti.is/laws-and-regulations//nr/2829

  28. Takeover bids Questions?

  29. Rights of shareholders in listed companies • Directive 2007/36/EC on the exercise of certain rights of shareholders in listed companies • Incorporated into the Act on Public Limited Companies through Act 126/2009 • New Arts. 88 a-e

  30. Directors´ remuneration • Commission Recommendation 2004/913/EC on fostering an appropriate regime for the remuneration of directors of listed companies • Commission Recommendation 2009/385/EC complementing Recommendations 2004/913/EC and 2005/162/EC as regards the regime for the remuneration of directors of listed companies • Acts 89/2006 and 68/2010 amending Act on PLC (2/1995), Art. 19 a

  31. Independent directors and board committees • Commission Recommendation 2005/162/EC on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board • Rules set jointly by the Chamber of Commerce, the Stock Market and the Federation of Employers

  32. Remuneration policies in the financial services sector • Commission Recommendation 2009/384/EC on remuneration policies in the financial services sector • Act 75/2010 amending Act 161/2002 on Financial Undertakings, with subsequent amendments • Art. 57a – bonuses • Art. 57 b – termination agreements

  33. Shareholder rights and remuneration Questions?

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