The European Economic Interest Grouping (EEIG)

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General features

The EEIG is a legal institution set up by the European Union to facilitate cooperation between entrepreneurs belonging to different member states, also in order to remove obstacles in this regard posed by the diversity of individual national laws.

The institution is governed by EU Regulation No. 2137 of 1985, which is directly applicable in all member states. In order to better understand the essential characteristics of European acts (regulations, directives, decisions..) see the page "EU Legal Sources" available at University of Oxford site.

Each national legislature has since issued specific supplementary rules, applicable to groups headquartered in individual member states.

The structure and function of the EEIG largely coincide with those of consortia with external activities.

In particular,

  • parties to the contract establishing the EEIG may be only natural or legal persons engaged in economic activity, who, however, unlike in the consortium, need not be entrepreneurs. The EEIG may also be formed by intellectual professionals, provided that the grouping is not used to directly engage in freelance practice.
  • At least two members must have a central administration or must carry out their activities in different states of the Union.
  • The EEIG is an associational body that has external relevance, which means it can assume rights and obligations in its own name. It also has procedural capacity. In other words, it constitutes an autonomous center of imputation of legal relations distinct from its members.
  • New members can be added but their admission must be decided by unanimous consent.

The function of the EEIG is to facilitate and develop the economic activity of its members. Therefore, the group does not aim to make profits for itself.

EEIG's formation

The constitutive contract must be in writing under penalty of nullity and is subject to legal publicity, i.e. it must be

  1. registered in the Commercial Register: it has constitutive effect, which means that the EEIG acquires legal personality with such registration;  
  2. published in the Official Gazette of the Republic: it has declaratory effect, which means that this procedure is necessary in order to grant enforceability against third parties.

Organization and decision-making processes

The internal organization and operating rules of the EEIG are largely left to private autonomy.

Two bodies are provided:

  1. assembly;
  2. administrative body.

The members of the group can collectively adopt any decision for the realization of the object of the group.

The most important decisions, specified in Article 17 of the Regulation[1], must be made unanimously, while for others the contract sets the required majorities. Unless otherwise stipulated by the participants, all decisions are made unanimously.

Each member has only one vote, but the contract may give more votes to some members, provided that no one member alone has a majority of votes.

The management of the EEIG is entrusted to one or more administrators, appointed by the founding contract or by decision of the members. A legal person may also be appointed as administrator.

Liability regime

Profits that result from the group's activities are considered directly as profits of the members and distributed among them according to the proportion provided for in the contract or, in the silence of the parties, in equal parts.

There is no compulsory formation of initial assets, and any fund established is not an independent asset in any case. However, the liability regime for obligations is very strict.

Obligations assumed by the group: all members of the group are jointly and unlimitedly liable, in addition to the group with its own assets. This strict discipline has been a strong disincentive to the formation of this type of group.

The liability of the members is subsidiary to that of the EEIG, which means that creditors of the group must first turn to the group itself to obtain payment and only if payment is not made do they turn to the individual members.

References

  1. Art. 17, second paragraph: "A unanimous decision by the members shall be required to: (a) alter the objects of a grouping; (b) alter the number of votes allotted to each member; (c) alter the conditions for the taking of decisions; (d) extend the duration of a grouping beyond any period fixed in the contract for the formation of the grouping; (e) alter the contribution by every member or by some members to the grouping's financing; (f) alter any other obligation of a member, unless otherwise provided by the contract for the forma­ tion of the grouping; (g) make any alteration to the contract for the forma­ tion of the grouping not covered by this paragraph, unless otherwise provided by that contract".