Law on European Cooperative Societies


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OFFICIAL TRANSLATION
 
REPUBLIC OF LITHUANIA
LAW ON EUROPEAN COOPERATIVE SOCIETIES
 
 
15 June 2006 – No X-696 Vilnius
 
 
Article 1. Objective and Scope of the Law
1. This Law shall regulate the formation, management, conversion and transfer of the registered office of the legal persons whose legal form is a European cooperative society.
2. This Law shall ensure the application of Council Regulation (EC) on the Statute for a European Cooperative Society (SCE) (hereinafter referred to as the “Regulation”) as listed in the Annex to this Law.
3. The European cooperative societies which have their registered office in the Republic of Lithuania shall be governed mutatis mutandis by the legal provisions of the Republic of Lithuania regulating cooperative societies (cooperatives) and public limited-liability companies to the extent that the Regulation permits and the Regulation, this Law and other legal acts regulating European cooperative societies do not provide otherwise.
 
Article 2. Transfer of the Registered Office of a European Cooperative Society to Another State
1. A decision on the transfer of the registered office of a European cooperative society may not be taken by secret ballot. A document attesting to a decision taken by the general meeting of a European cooperative society on the transfer of the registered office of the European cooperative society must, not later than within 5 days of the taking of the decision by the general meeting, be submitted to the Administrator of the Register of Legal Entities.
2. A proposal on transfer of the registered office of a European cooperative society drawn up by the management or administrative organ must be publicised in a daily newspaper referred to in the statutes 3 times at the intervals not less than 30 days or publicised once in a daily newspaper referred to in the statutes and notified to all creditors of the European cooperative society in writing. The publication and the notice must state the name, registered office and number of the European cooperative society, the data listed in Article 7(2)(a) and (e) of the Regulation, where and when the documents listed in Article 7(4) of the Regulation could be examined.
3. A proposal on transfer of the registered office of a European cooperative society must be submitted to the Administrator of the Register of Legal Entities not later than on the first day of publication of the proposal on transfer in a daily newspaper referred to in the statutes.
4. A European cooperative society shall acquire the status of a European cooperative society whose registered office is being transferred on the day of publication by the Administrator of the Register of Legal Entities about a proposal on transfer of the registered office of the European cooperative society. 
5. Rights of creditors of a European cooperative society whose registered office is being transferred shall be protected mutatis mutandis by the legal provisions of the Republic of Lithuania regulating protection of the rights of creditors of a legal person under reorganisation.
6. The Ministry of Justice shall, in accordance with the procedure laid down by the Government, have the right to oppose transfer of the registered office of a European cooperative society to another state where such a transfer of the registered office of the European cooperative society would harm public interest.
7. The Bank of Lithuania shall, in accordance with the procedure laid down by the legal acts regulating its activities, have the right to oppose transfer of the registered office of a European cooperative society to another state where the European cooperative society is supervised by the Bank of Lithuania.
8. Disputes regarding transfer of the registered office to another state shall be settled in court.
 
Article 3. Formation of a European Cooperative Society
1. The Ministry of Justice shall, in accordance with the procedure laid down by the Government, have the right to oppose participation of a cooperative society (cooperative) in the formation of a European cooperative society by way of merger as referred to in the fourth indent of Article 2(1) of the Regulation where this could harm public interest. Disputes regarding participation of a cooperative society (cooperative) in the formation of a European cooperative society by way of merger shall be settled in court.
2. The taking of a decision on the approval of the draft terms of merger by the meeting of a cooperative society (cooperative) pursuant to Article 27 of the Regulation shall be governed mutatis mutandis by the legal provisions of the Republic of Lithuania regulating the taking of a decision regarding reorganisation of a cooperative society (cooperative) by the meeting. The draft terms of merger may not be approved by secret ballot.
3. In the case of formation of a European cooperative society by way of conversion of a cooperative society (cooperative) into a European cooperative society as referred to in the fifth indent of Article 2(1) of the Regulation, the draft terms of conversion of the cooperative society (cooperative) drawn up by the board (where the board is not formed – by the head of the administration) of the cooperative society (cooperative) to be converted must include at least the following particulars:
1) the information specified in Article 2.44 of the Civil Code of the Republic of Lithuania;
2) the name, registered office and legal form of a legal person of the new form – a European cooperative society;
3) the allotment of shares of the cooperative society (cooperative) to be converted and payments to members of the cooperative society (cooperative);
4) the special rights conferred on an audit firm performing an evaluation as specified in Article 35(5) of the Regulation.
4. A report certifying that the requirements of Article 35(5) of the Regulation are respected shall be drawn up by an audit firm wherewith a cooperative society (cooperative) shall enter into an agreement.
5. When converting a cooperative society (cooperative) into a European cooperative society Article 5(3) (4) (5) and (6) of this Law shall apply mutatis mutandis.
 
Article 4. Management of a European Cooperative Society
1. The registered office of a European cooperative society indicated in the Register of Legal Entities and its head office must be located in the same place.
2. The number of members of the management or administrative organ of a European cooperative society must not be less than 3.
3. The number of members of the supervisory organ of a European cooperative society must not be less than 3 and must not exceed 15.
4. The management or supervisory organ must, in accordance with the procedure laid down in the statutes of a European cooperative society, appoint a member of the management organ, or the administrative organ must, in accordance with the procedure laid down in the statutes of the European cooperative society, appoint a member of the administrative organ who shall be responsible for the management of the European cooperative society in the same manner as the head of the administration of a cooperative society (cooperative) is in charge according to legal provisions of the Republic of Lithuania.
 
Article 5. Conversion of a European Cooperative Society into a Cooperative Society (Cooperative)
1. The draft terms of conversion of a European cooperative society drawn up by the management or administrative organ of the European cooperative society to be converted must include at least the following particulars:
1) the information specified in Article 2.44 of the Civil Code of the Republic of Lithuania;
2) the name, registered office and legal form of a legal person of the new form – a cooperative society (cooperative);
3) the allotment of shares of the European cooperative society to be converted and payments to members of the European cooperative society;
4) the special rights conferred on an audit firm performing an evaluation as specified in Article 76(5) of the Regulation.
2. A report certifying that the requirements of Article 76(5) of the Regulation are respected shall be drawn up by an audit firm wherewith a European cooperative society shall enter into an agreement.
3. Statutes of a cooperative society (cooperative) and a report of the management or administrative organ must be drawn up together with the draft terms of conversion.
4. The draft terms of conversion must be submitted to the Administrator of the Register of Legal Entities not later than on the first day of publication about the draft terms of conversion drawn up in a daily newspaper referred to in the statutes. A report drawn up by an audit firm and a report of the management or administrative organ must be submitted to the Administrator of the Register of Legal Entities together with the draft terms of conversion.
5. A European cooperative society shall acquire the status of a European cooperative society under conversion on the day of publication by the Administrator of the Register of Legal Entities about the drawing up of the draft terms of conversion.
6. A document attesting to a decision taken by the general meeting of a European cooperative society on the conversion of the European cooperative society must, not later than within 5 days, be submitted to the Administrator of the Register of Legal Entities.
 
Article 6. Categories of Transactions Requiring a Decision of the General Meeting
A European cooperative society’s statutes must list the following categories of transactions requiring a decision of the general meeting:
1) a decision on the acquisition, transfer or lease of a part of long-term assets exceeding 1/10 of the value of the equity capital of the European cooperative society;
2) a decision on standing surety for or guaranteeing of obligations of other economic entities or pledge of assets, or taking and granting of long-term loans, where the amount of such a transaction exceeds 1/10 of the value of the equity capital of the European cooperative society.
 
Article 7. Rights and Duties of the Administrator of the Register of Legal Entities
1. The Administrator of the Register of Legal Entities shall issue the certificates referred to in Article 7(8) and Article 29(2) of the Regulation.
2. A common audit firm which shall examine the draft terms of merger pursuant to Article 26(2) of the Regulation must be approved by the Administrator of the Register of Legal Entities.
3. The Administrator of the Register of Legal Entities shall ensure the publication of data and documents of a European cooperative society and the branches as well as representative offices of the European cooperative society, also submission of the notices about the European cooperative society as referred to in the Regulation to the Office for Official Publications of the European Communities.
4. The Administrator of the Register of Legal Entities shall be responsible for the provision of information pursuant to Article 73(5) of the Regulation.
 
Article 8. Proposals to the Government
The Government shall, by 1 July 2006:
1) supplement the Regulations on the Register of Legal Entities with the provisions required to ensure the application of this Law and the Regulation;
2) lay down the procedure for implementing provisions of Article 2(6) and Article 3(1) of this Law.
 
Article 9. Entry into Force of the Law
This Law, except for Article 8, shall enter into force on 18 August 2006.
 
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
 
 
 
 
 
PRESIDENT OF THE REPUBLIC                                                 VALDAS ADAMKUS
                                                                        Annex to
Republic of Lithuania
Law
on European Cooperative Societies
 
 
 
 
EU LEGAL ACT IMPLEMENTED BY THE LAW ON EUROPEAN COOPERATIVE SOCIETIES
 
Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE). OJ 2004 Special Edition: Chapter 17 Volume 01 P. 280.