Commercial Law – European Private Company Legislation – Consultation – Communication

The objective of the European Private Company (“EPC”) legislation is to make it easier for European small and medium-sized enterprises (“SMEs”) to conduct cross-border business. This is achieved by providing SMEs with a special European legal form equalled across each Member State.

It is intended that the ability to operate in various Member States according to the same corporate rules should significantly reduce compliance costs and therefore enhance the mobility and competitiveness of European SMEs. The existing statute applicable to European Companies has been designed for large companies, and does not constitute a viable option for SMEs. This is particularly due to the fact that a minimum capital requirement of 120.000 EUR is stipulated.

Work has been carried out on the EPC legislation over the last three years. In 2004, the Commission launched a feasibility study for the EPC legislation targeting SMEs. It presented its results on the 13th of December 2005. In addition to this feasibility study, a question on the need for the EPC legislation was also asked in the public consultation on the future of the Company Law and Corporate Governance Action Plan (December 2005 to March 2006). The outcome of the study and the consultation were, however, unclear.

Even though the EPC legislation received a considerable support from SMEs, there were still some who were sceptical about it. The European Parliament has been working on the EPC legislation and the Committee of Legal Affairs has drafted an own-initiative report and a resolution on this issue together with recommendations on possible content of the EPC legislation. It was adopted by the European Parliament on the 1st of February 2007.

It is interesting to note that the European Parliament adopted a Resolution on the European Private Companies at the beginning of February 2007, yet little had been done for almost 6 months. The Commission has studied the European Parliament’s report and recommendations as well as the feasibility study conducted in 2005. Whilst doing this analysis the Commission discovered several issues which needed to be tested in the market. This is why the Commission launched a specific consultation on European Private Companies in July. It is intended that it should give the Commission the facts and evidence needed for a legislative proposal.

The public consultation continued until the end of October. Its results will then be analysed and incorporated into the impact assessment, which is likely to take a number of months. The next step would be the preparation of a possible proposal and consultation of the draft text with experts. Exact timing on these matters is likely to be made clearer by the end of 2007, but a draft proposal could only be ready in the first half of next year.

The Commission has also considered issues relating to a simplified business environment for companies in the areas of company law, accounting and auditing. This was highlighted by the Commission’s Communication published in July 2007. An important part of the Commission’s Better Regulation agenda is the revision of the existing European legislation. In this context a full review of European company law, accounting and auditing directives was carried out.

The objective of the exercise was not only to reduce the administrative burdens for companies, specifically SMEs, but to ascertain if the European rules are still adequate in today’s business environment. The Communication published in July contains the Commission’s proposals based on the outcome of the review of the directives in the fields of company law, accounting and auditing.

With regard to company law, the Communication outlines two approaches:

§ The first option would limit European legislation to matters that have cross-border relevance. For example: The registration of companies and branches as well as cross-border mergers. The directives that cover mainly domestic situations (For example: The Third Company law Directive on domestic mergers and the Second Company law Directive on companies’ capital) would be repealed.

§ The second option is a slightly more detailed approach that would allow for the analysis of individual provisions in the directives, such as reporting requirements in the case of a merger or a division. It would offer possibilities of simplification, repeal or introduction of alternative provisions.

With regard to accounting and auditing, the focus of the Communication is on reducing costs for SMEs. The following measures are accordingly set out:

§ To introduce a new, additional threshold for micro-enterprises (Namely those with less than 10 employees, balance sheet total below 500,000 EUR and turnover below 1,000,000 EUR ) in order to exempt them completely from any requirements on accounting and auditing under the two directives.

§ To extend the transition period for SMEs crossing the thresholds from two to five years.

§ To exempt small entities from the requirement to publish their account.

§ To give certain medium sized companies easier access to the exemptions for small companies.

Aside from the above, the Communication has had two further objectives:

§ Firstly, to amalgamate the views of businesses and stakeholders on the proposals. This consultation ran until mid-October 2007.

§ Secondly, to find a common ground with the Member States and the European Parliament on the matters future legislative proposals should cover in order to simplify business environment for companies. In accordance with the principles of Better Regulation, impact assessments will then be prepared. Subject to the results of these documents and the outcome of the public consultation, legislative proposals are expected to be presented within the first few months of 2008.

© RT COOPERS, 2007. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

How To Get An Unlimited Supply Of Money For All The Residential And Commercial Real Estate Deals You

As an investor one of the most important things that you’ll want to realize is that banks are not the only place that you can turn for loans. In fact, there are many people who are willing to invest in the idea that they, too will profit financially from the investment. If you are seen as a good investment, in other words, they feel that you can give what you’re promising; they will be willing to invest in you without the traditional hassles of going to the bank for such a loan.

A private lender may be a wonderful source for money for your investment idea. The biggest difference between a private lender and a bank is the fact that a private lender is looking into the investment more than your credit history. A bank sees the idea, but is really more interested in your credit standing and your debt to income ratio. If they feel that you, the person, are a good credit risk; that you will pay back your debt regardless of the success of the business, they will approve you for the loan and this will be the beginning of a long process. A private lender on the other hand will like to see a good credit rating and debt-to-income ratio, but they will place their focus on your business idea. If they feel that your idea will bring large profits, even if your credit isn’t perfect, they may be willing to invest in that idea. If they decide to invest, they can usually get you the money within a few days. This is much shorter than the process you’d have to go through with the bank.

Another tremendous benefit to a private lender is the fact that through discussion with you the amount that will be borrowed will be decided upon. If you find later that you need more money for some unexpected problem with your investment such as re-wiring a house or something along those lines, a private lender can do that with a little conversation rather than another long drawn out loan process. The terms for paying the loan back will be more flexible with the private lender as will the flexibility of those terms. If you run into trouble in the repayment you can speak to the lender and work out some short term solution until you are able to resume full payments. All decisions of repayment and terms will be between you and the lender.

The main benefit to the private lender to some is the ability to avoid a hard money loan. This type of loan (hard money) is one that caters nicely to those that are having financial difficulty. They are willing to loan money to those that have credit trouble or have had credit trouble in the past. The good part of that is quickly dwarfed by the downside. A hard money loan will have very high interest rates and a strict repayment term. If the loan is defaulted on, the hard money lender will have the right to claim the property and sell it in order to recoup the loss of the loan. You will be putting yourself and the property you’re investing in at great risk through a hard money loan. The term of a hard money loan will come to maturity much faster than with a private lender. A private lender will not be as worried about your credit and they will be willing to work with you to stay in good standing with the payback of your loan. In some cases, you may be able to borrow the entire amount of investment into the property including any necessary repairs or updates and pay the entire amount of the loan back when the property has been sold. No bank or hard money loan will allow this type of term.

Some may think that this all sounds great if you can find a private lender willing to work with you. There are more places to look than you may think. A good place to start is with the local investor’s association. Most areas should have some association made up of local investors. Since these people have been in the investing game for some time, probably, at least some of them may have had dealings with a private lender. If you can find some that have, they can also give you some tips as to how to appeal best to the lender. They will know what’s important to the lender and what things they would like emphasized. This will help you to land the loan you’re looking for.

Some other places you may want to ask around about private lenders are your local professionals. Local doctors, lawyers, or dentists, may be private lenders themselves, or they may know people that are. They may be able to again tell you exactly what they or their acquaintances are looking for in a business proposal. They will give you tips as to how to present your business plan and what kind of things included will get you the loan you’re looking for.

Friends and family would be the next area that you may want to investigate. You may think that you’d know if they could help you, but you may be surprised. Your aunt’s cousin’s sister-in-law’s little girl may have had a teacher that does private lending. It’s always possible so if you’re thinking of putting together a business plan and investing in some real estate, commercial or residential, be sure that everyone you talk to knows about it. You may find that there are people among those that you know that can help you get exactly what you’re looking for.

A Google search will also help you when you’ve exhausted all other avenues. You can do a search on “local private money lenders” in your area and the internet may just be able to give you a place to start. You can start calling around from there and through talking to the first on the list, you may be able to find the others.

Wherever you find your investor, know that they are there to help you and themselves with the profits you are both looking for. Be sure that there is paperwork between you and your lender and make sure you have only one lender per property. That will help avoid confusion and may build a lasting relationship between you and your chosen lender. This will keep your profits coming and make your lender money at the same time.

The Services of a Property (Real Estate) Law Firm

Many people, when purchasing or selling real estate, are unfamiliar with the laws and practices. A Property Law Firm can help an individual or business understand all of the legal aspects of buying or selling real estate. This is an extremely valuable resource that can make the selling or purchasing of real estate much smoother for an individual or a large corporation

Numerous property law firms work beside both private and corporate international clients. A property lawyer is experienced in all of the arenas of commercial law. This includes corporate takeovers, foreign investment rules, property investment portfolios and information technology. This type of lawyer must not only be able to invest in a successful real estate project but also develop successful real estate projects.

One of the most popular services that a property law firm performs is a contracts review. This means that an experienced lawyer is given the task of reviewing contracts to sell, buy, estate, lease of land, land and house, condominium, apartment and villa prepared by the seller or project. Also, the lawyer is in charge of revising the contracts in order to ensure the optimum interest of the buyer.

Another service provided by a property law firm is contracts drafting. A lawyer will draft all legal contracts to buy, sell or lease of real estate for individual clients or for project clients. Contracts can be drafted that deal specifically with the Leasehold or Freehold approach.

Land due diligence is a type of service that deals with the quintessential step in the acquisition process that is designed to check the legitimacy of purchasing property or real estate.

A property law firm is also a great resource for receiving advice that deals with the legal and tax aspects that can affect an individual acquiring property or making a return on the investment. One of the goals of a real estate lawyer is to devise a plan to maximize the return.

A property law firm can also prepare the necessary document that is needed for the transfer or conveyance of property. These documents include expenses estimation and the property transfer. All of the above mentioned services are usually performed for individual clients.

A property lawyer can also handle the needs of corporations and businesses. This particular lawyer is knowledgeable in company formation. Meaning that the lawyer is able to help a corporation become established or move to another location.

A property lawyer can also give advice on applying for an extended VISA or work permit on top of several other services. A property law firm is a very important resource to rely on when purchasing or selling real estate.