Mirosław Cejmer, Jacek Napierała, Tomasz Sójka (eds.)

European Company Law, Vol. II, Legal Institutions of the Capital Directive, Part 2, Zakamycze 2005

(in Polish)

The second volume of "European Company Law" series continues to discuss the Second Directive's fundamental institutions which are expected to be widely modified in accordance with the European Commission's directive entitled, "Action Plan to Move Forward". In this volume, the authors analyze and address issues concerning legal capital as a critical element of the current model of European shareholders' and creditors' protection. This book is designed to contribute to the growing debate about advantages and disadvantages of traditional institutions governing rules on public limited liability companies' capital formation and maintenance in the face of strong capital market pressure on European corporate structure.

The EU Commission's proposal for amending the Second Directive provides evidence that the legal capital rules modernization process is becoming both increasingly visible and viable. Thus, the present development in legal capital rule is a natural prelude to the possible introduction of an alternative regime in the 3rd stage of the modernization program of European Company Law, that is scheduled for the time after 2008. Also, additional measures are taking shape—described in the 'Action Plan to Move Forward' as the Commission's recommendation concerning independent members of a supervisory board or remunerations of listed companies' directors. An analysis of the above-mentioned problems, commencing with the innovation of Corporate Governance, will be the key issues of next volume of "European Company Law."

Table of contents


Sense and nonsense of legal capital - contribution to the economic analysis of a legal protection of corporate creditors

Arkadiusz Radwan

2.The conflict of interest between shareholders (equity holders) and creditors (debt holders)
2.1."Rules of the game"
2.2.Possible conduct of shareholders to the detriment of creditors' position
2.3.Factors mitigating opportunistic behavior by shareholders
3.A need for legislative protection from a perspective of different categories of creditors
3.1.Categories of creditors
3.2."Strong" contractual creditors
3.3."Weak" contractual creditors
3.4.Involuntary creditors
4.Statutory creditor protection - regulatory strategies
4.1.Affiliation strategy
4.2.Standards Strategy
4.3.Rules Strategy
5.Creditors protection through legal capital rules
5.1.Legal Capital - conception and context
5.2.Drawbacks of a legal capital rules for creditors protection
6.Towards the new regime of creditor protection
6.1.Factors influencing a shape of a desirable system of creditor protection
6.2.Paradigm change in creditor protection and historical and infrastructural background (path dependence issues)
7.Proposals for reform
7.1.Proposals for European legislator
7.2.Proposals for national legislator

No par value shares

Mirosław Cejmer, Kamil Zawicki

2.Nominal value system in the law of public companies
3.No par value shares
4.No par value shares in European Union Law
5.Review of particular solutions in domestic legal systems
6.Perspectives on no par value shares introduction into Polish Law system

Contributions in kind in European and Polish Company Law - capability of being contributed, sufficient safeguards of a proper valuation, hidden contributions in kind

Krzysztof Oplustil

1.Rules on contributions in kind in the Second Company Law Directive as an element of European Legal Capital Doctrine
2.Contribution in kind regulation in the Second Company Law Directive- minimum or maximum standard?
3.Rules on contributions in kind in the Second Company Law Directive and their implementation into Polish Law system
3.1.Contribution in kind - definition
3.2.Protection of a proper valuation
3.3.Making contribution in kind
4.Future development of the Second Company Law Directive concerning contributions in kind
5.Protection against circumvention of the rules on contributions in kind
5.1.General comments
5.2.So called post-incorporate acquisition in European and Polish legal system
5.2.1.Regulation of Article 11 of the Second Directive
5.2.2.Regulation of Article 394 Polish Commercial Companies Code as an example of incorrect implementation of EU law
5.3.Non- statutory conception (approach) of fighting with hidden contribution in kind and compliance with the EU law
5.3.1.General approach
5.3.2.Question of a compliance of the concept of a hidden contribution in kind with the EU law
5.3.3.Proposals for the Polish legal system

Contract stipulating transfer of profits by public limited liability company and legal capital maintenance rule

Tomasz S├│jka

2.A contract stipulating transfer of profits from a dependent company to a dominant company as a contract creating a right of participation for a dominant company
3.Transfer of profit as a transfer pricing
4.Economic function of transfer of profits contract
5.Prerequisites for conclusion of a contract stipulating transfer of profit by a dependent company to a dominant company
6.Allowable content of transfer of profits contract
6.1.Time of creation of claim for transfer of profits
6.2.Maximum part of a profit that may be transferred to dominant company
7.Obligation to file to the registration files of a dependent company an extract from a contract of transfer of profits
7.1.Provisions concerning responsibility of a dominant company towards a dependent company
7.2.Provisions concerning responsibility of a dominant company towards a dependent company creditors

Suspension of shareholders' rights deriving from company's own shares and dominant company's shares possessed by dependent company

Daniel D─ůbrowski

2.Suspension of voting right as one of consequences of buy out of own shares in Second Company Law directive
3.Suspension of exercising shareholders' rights arising from company's own shares in Polish Commercial Companies Code
3.2.Right to attend the shareholders' meeting
3.3.Voting rights
3.4.Right to participate in company profits
3.5.Pre-emption rights
3.6.Participation of the company in the issue of shares within the increase in the share capital from the assets of the company
3.7.Disposal of a company's own shares
3.8.Performance of activities by a company aiming at preservation of shareholders' rights
3.9.Exercising shareholders rights by a third party acquiring shares on the company's behalf
4.Suspension of exercising shareholders rights resulting from dominant company's shares possessed by dependent company
4.1.Introductory comments
4.2.Suspension of corporate rights arising from dominant company shares
4.3.Suspension of property rights arising from dominant company shares
4.4.Performance of activities by a dependent company aiming at preservation shareholders' rights deriving from dominant company shares

Exclusion of pre-emptive right in Second Company Law Directive and authorised capital

Mirosław Cejmer

2.Notion of pre-emptive right
2.1.Introductory comments
2.2.Protection of corporate status
2.3.Protection of property status
2.4.Pre-emptive right in public companies
3.Pre-emptive right in Second Company Law Directive
3.1.Introductory comments
3.2.Material prerequisites of permissibility of pre-emptive right exclusion
3.2.1.Company's interest
3.2.2.Material control of legality of pre-emptive right exclusion within authorized capital
3.3.Duty to report by a management board (a board of directors)
3.3.1.Introductory comments
3.3.2.Duty to give reasons for a direct exclusion of shareholder's pre-emptive right by resolution of the general meeting within authorized capital
3.3.3.Duty to give reasons for an authorization of a management board (a board of directors) to exclude a pre-emptive rights
4.Perspectives on reform of rules on shareholders' pre-emptive rights in the Second Company Law Directive
4.1.Recommendations of SLIM working group and the Group of High Level Company Law Experts Report
4.2.Proposal for amending the Second Company Law Directive

Member States obligation to implement a directive into domestic legal system and results of failure to comply with the obligation

Maciej Mataczyński

1.A directive as a source of law
2.Member State obligation to implement a directive into a domestic legal system
3.Direct effect of a directive in domestic law
4.Responsibility of the Member State for damage resulting from a lack of or incorrect implementation
4.1.Responsibility of the Member State for damage resulting from a lack of or incorrect implementation damage resulting from a lack of or incorrect implementation
4.2.Responsibility of the Member State for damage resulting from a defective judgment
4.3.Responsibility of the Polish state for damage resulting from a lack of or incorrect implementation of a directive
5.Detailed problems connected with the implementation of Directive nr 77/91 into the Polish legal system

A Project of Modernization of Second Company Law Directive

Jacek Napierała, Tomasz Sójka

1.2.Goals of the envisaged changes
1.2.1.General remarks
1.2.2.Company interest
1.2.3.Shareholders and creditors interest
1.2.4.Capital market protection
1.3.Changes of the legal institutions of Second Company Law Directive
2.Contribution in kind valuation by an expert
2.1.Article 10, 11, 27 of Second Company Law
2.2.Projected changes
3.Company's own shares
3.2.Prerequisites for acquisition of company's own shares (Article 19)
3.3.Propositions of changes
4.Prohibition of financial assistance by a company for acquisition of its own shares
4.1.Existing provisions of Article 23 of Second Directive
4.2.A Proposal to amend Article 23
5.Pre-emptive right in public company
5.1.Regulation of Article 29 of Second Directive concerning pre-emptive rights
5.2.A proposal to amend Article 29.5a
6.Compulsory acquisition of shares
6.1.Existing regulations
6.2.Projected changes: squeeze out
6.3.Relationship to the provisions of Thirteenth Directive on company law concerning takeover and other general bids
7.Reduction in the share capital
7.1.Current regulation of Article 32 of Second Company Law Directive
7.2.A proposal to amend Article 32 .1 second sentence of Second Company Law Directive