The European private company: an opportunity from an economic crisis?

Abstract

The European Commission is undertaking a legal modernisation initiative in order to facilitate small and medium-sized enterprises in unlocking their full potential as active players on the Single Market, being also the backbone of the Union’s economy. The flagship of this initiative is going to be a novel European legal form - the European Private Company (EPC) or as it is known the Societas Privata Europea (SPE). Designed as an instrument to do business in the Single Market the SPE aims to be transparent, flexible and offer a strong label everywhere. As with the Societas Europea, there are certain gaps in the SPE Statute, which prompt for the application of national laws. This could result in 27 different SPE forms in the EU, which leads to financial implications regarding the formation and day-to-day operations of the company. A detailed exploration of the corporate finance issues is followed by plausible solutions based on corporate governance theories.