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 is 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 Act.

The EMCA offers 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 Act as a company law paradigm, as it will be a modern competitive company law. Furthermore, it will be a low cost, easy to use alternative to drafting national company laws. At the same time it does not prevent each Member State from 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 Company 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 since been expanded with representatives from the non-represented Member States, in particular new Member States. At present the Group has 28 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 has been chaired by professor Paul Krüger Andersen, Department of Law, of the Aarhus School of Business and Social Sciences, Aarhus University, and the Group's secretariat has been situated at that same location. 


Publication

The final aim of the process has been a complete European Model Company Act covering all aspects of traditional company law. In excess of the Model Act itself, each section of the Model Act is followed by an official comment, also prepared by the Group, where the purpose and operation of the given section of the statute is explained.

During the preparation period several articles relating to the project have been published. 

The European Model Company Act was presented at an official ceremony in Rome in March 2017 and can be downloaded at www.ssrn.com (follow the link in the right column).