European Model Company Act (EMCA)
Project description
On 27th and 28th September 2007, a commission formed on the initiative of Professor Paul Krüger Andersen and Professor Theodor Baums held its first meeting in Aarhus, Denmark to deliberate on its goal of drafting a "European Model Company Act" (EMCA). The members of the commission are prominent professors representing the different EU Member States.
The EMCA will be designed as a free-standing general corporation statute that can be enacted substantially in its entirety by the Member States, or they may enact selected provisions of the Model Law.
The EMCA will offer the Member States a model company law, which leaves it to each Member State to decide whether it will offer its businesses the advantages given by harmonisation. The major benefit from an integrated company law framework is that it establishes similar conditions for company shareholders and third parties all over the EU, thus facilitating cross-border investment and trading by ensuring shareholder rights and rebuilding investor confidence.
However, at the same time the EMCA allows special local considerations and for experimentation with new or different ideas, as Member States are free to opt out of parts of the Model Law in order to implement national company law innovations.
Thus, the EMCA can be a tool for better regulation in the EU, as it will prove to be a coherent, dynamic and responsive European legislative framework. Member States will benefit from using the Model Law as a company law paradigm, as it will be a modern competitive Company Law, and furthermore, it will be a low cost, easy to use alternative to drafting national company laws. At the same time it does not hinder each Member State in making its own Company Law, adopting none or only part of the provisions of the Model Act. Moreover, it allows the Commission to take part in, or to support, a continuous modernization of the Model Act, without enforcing legislation on the Member States.
An EMCA drafted and continuously further developed by a European Model Company Law Group may also be able to respond more rapidly to the changing circumstances and market conditions that modern businesses face. An EMCA may therefore overcome some of the criticism of traditional lawmaking being inflexible, as it will offer a more informal and organic convergence of European company law.
Thus, a European Model Law Act can be an effective catalyst to improve European Company Law and improve the competitiveness of European business. The success of the US Model Business Corporation Act in improving the single states' company acts supports this expectation.
Members of the group
From the beginning, the project group included representatives from 16 Member States, but has been and continue to will be expanded with representatives from the non-represented Member States, in particular the remaining new Member States. At present the Group has 19 members, who are all prominent and experienced professors from the EU Member States. Further, the Group has an extensive international network – including American researchers – who can and will be put to use in the Group's work.
Organisation of the work
The EMCA group is chaired by professor Paul Krüger Andersen, Department of Law, of the Aarhus School of Business and Social Sceinces, University of Aarhus, and the Group's secretariat is situated at that location and headed by post.doc. Evelyne Beatrix Cleff.
Publications
The final aim of the process is a complete European Model Company Law covering all aspects of traditional company law. In excess of the Model Law itself, each section of the Model Law will be followed by an Official Comment, also prepared by the Group, where the purpose and operation of the given section of the statute is explained.
The time schedule for the first draft of the complete Model Law will be 3-4 years. During this period sub-results will be published in a working paper series and the individual members will publish articles related to the work of the group.
