2007 No. 1949

EUROPEAN COMMUNITIES

The European Grouping of Territorial Cooperation Regulations 2007

Made9th July 2007

Laid before Parliament10th July 2007

Coming into force1st August 2007

The Secretary of State is a Minister designated1 for the purposes of section 2(2) of the European Communities Act 19722 in relation to the creation, operation, regulation or dissolution of companies and other forms of business organisation.

The Secretary of State makes the following Regulations in exercise of the powers conferred by section 2(2) of that Act.

PART 1GENERAL

Citation and commencementI11

1

These Regulations may be cited as the European Grouping of Territorial Cooperation Regulations 2007.

2

These Regulations come into force on 1st August 2007.

InterpretationI22

1

In these Regulations—

F2“the 2006 Act” means the Companies Act 2006;
“the 1986 Act” means the Insolvency Act 19864;
“the 1989 Order” means the Insolvency (Northern Ireland) Order 19895;
“the EC Regulation” means Regulation (EC) No 1082/2006 of the European Parliament and of the Council on a European grouping of territorial cooperation6;
“EGTC” means a European grouping of territorial cooperation formed under the EC Regulation;
“the Insolvency Rules” means in the case of a UK EGTC with its registered office in England and Wales the Insolvency Rules 19867, in the case of a UK EGTC with its registered office in Scotland the Insolvency (Scotland) Rules 19868, or in the case of a UK EGTC with its registered office in Northern Ireland the Insolvency Rules (Northern Ireland) 19919;
“UK EGTC” means an EGTC which has its registered office in the United Kingdom.

2

In any provision of an enactment applied to a UK EGTC by virtue of these Regulations—

“articles” means the statutes of a UK EGTC;
“board of directors” means the assembly of a UK EGTC, and all the directors of a UK EGTC if more than one, and if only one, the director of a UK EGTC ;
“company” means a UK EGTC;
“director” or “past director” of a company means a director or former director of a UK EGTC, a member or former member of the assembly of a UK EGTC or any other person who has or has had control of management of a UK EGTC’s business;
“officer” means a director or a member of the assembly of a UK EGTC, or a member of any other organ of a UK EGTC provided for in its statutes;
“registered office” means the office specified in the convention of an EGTC to be its registered office;
“ordinary resolution”, “written resolution” and “general meeting” mean the procedures of a UK EGTC set out in its statutes which most closely correspond to those things as provided for in F3the 2006 Act,

and other expressions used in these Regulations and defined F4in the 2006 Act.

PART 2PROVISIONS RELATING TO ARTICLES 4, 5, 11, 12, 13 and 14 OF THE EC REGULATION

Establishment of an EGTC (Article 4(3) of the EC Regulation)I33

A body falling within one of the categories set out in Article 3(1) of the EC Regulation which by virtue of any enactment is restricted in its ability to be a member of a company shall be restricted to the same extent in its ability to be a member of an EGTC.

Acquisition of legal personality (Article 5(1) of the EC Regulation)I44

1

For the purposes of Article 5(1) of the EC Regulation the statutes referred to in article 9 of the EC Regulation shall be published—

a

in the case of a UK EGTC with a registered office in England and Wales, in the London Gazette;

b

in the case of a UK EGTC with a registered office in Scotland, in the Edinburgh Gazette;

c

in the case of a UK EGTC with a registered office in Northern Ireland, in the Belfast Gazette.

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Competent authority and court (Articles 4(4), 13(1) and 14(1) of the EC Regulation)I55

1

The Secretary of State shall be the competent authority for the purpose of receiving the notifications and documents under article 4(2) of the EC Regulation.

2

The Secretary of State shall be the competent body for the purpose of prohibiting under article 13 of the EC Regulation any activity carried on in the United Kingdom by an EGTC where such an activity is in contravention of any enactment or rule of law providing for public policy, public security, public health or public morality, or in contravention of the public interest of the United Kingdom.

3

The High Court (in Scotland, the Court of Session) shall be the competent court for the purpose of ordering the winding up of a UK EGTC under article 14(1).

Budget (Article 11 of the EC Regulation)I66

F61

The following provisions in the 2006 Act about accounts and audit shall apply as if a UK EGTC were a company entitled to prepare accounts in accordance with the small companies regime—

a

Chapter 2 of Part 15 (accounting records);

b

section 390 (financial year);

c

section 391 (accounting reference periods and accounting reference date), except that references to the date of being incorporated and of incorporation shall be treated as references to the date of publication in the Gazette of the EGTC’s statutes pursuant to these Regulations;

d

Chapters 4, 5 and 7 of Part 15 (annual accounts, directors’ report and publication);

e

Chapter 11 of Part 15 (revision of defective accounts and reports), except section 456(2) and (7);

f

section 464(2) (accounting standards);

g

section 469 (preparation and filing of accounts in euros);

h

section 471 (meaning of “annual accounts” and related expressions);

j

section 472 (notes to the accounts);

k

section 475 (requirement for audited accounts), except—

i

the words “section 477 (small companies), or” in subsection (1)(a);

ii

subsection (1)(b);

l

section 476 (right of members to require audit);

m

sections 480 and 481 (exemption from audit: dormant companies);

n

sections 495 and 496 (auditor’s report);

o

section 498 to 501 (duties and rights of auditors);

p

section 503 (signature of auditor’s report), except that the reference in subsection (3) to the senior statutory auditor shall be read as a reference to the person who signed the report on behalf of the firm;

q

section 505 (names to be stated in published copies of auditor’s report), except—

i

that the reference in subsection (1)(a) to the senior statutory auditor shall be read as a reference to the person who signed the report on behalf of the firm, and

ii

subsection (1)(b).

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3

A UK EGTC shall—

a

make its latest accounts available for inspection at its registered office by any person, without charge and during business hours;

b

supply a copy of those accounts to any person on request at a price not exceeding the administrative cost of making and supplying the copy.

4

The members of a UK EGTC shall appoint an auditor in accordance with the decision-making procedures contained in the statutes of that UK EGTC.

F85

The auditor of a UK EGTC must be a person who—

a

is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006, and

b

if the appointment were an appointment as a statutory auditor, would not be prohibited from acting by section 1214 of that Act (independence requirement).

Insolvency and winding up (Article 12(1) of the EC Regulation)I77

A UK EGTC shall be wound up as an unregistered company under Part 5 of the 1986 Act, or in the case of a UK EGTC with a registered office in Northern Ireland, under Part 6 of the 1989 Order, and the provisions of—

a

that Act (or in the case of Northern Ireland, that Order), and

b

the Insolvency Rules,

shall apply to that UK EGTC with the modifications set out in Parts 2 and 3 of the Schedule to these Regulations.

PART 3EXERCISE OF MEMBER STATE OPTIONS UNDER THE EC REGULATION

Prohibition of members with limited liability (Article 12(2) of the EC Regulation)I88

A UK EGTC may not be formed with a member which has limited liability.

PART 4SUPPLEMENTAL PROVISIONS RELATING TO THE EFFECTIVE APPLICATION OF THE EC REGULATION

Application of the Company Directors Disqualification Act 1986I99

Where a UK EGTC is wound up as an unregistered company under Part 5 of the 1986 Act, or in the case of a UK EGTC with a registered office in Northern Ireland, under Part 6 of the 1989 Order, the provisions of the Company Directors Disqualification Act 198612 (“the 1986 Act”), or in the case of Northern Ireland, the Company Directors Disqualification (Northern Ireland) Order 200213, shall apply to a UK EGTC as if it were a company as defined by section 22(2)(b) of that Act, or as the case may be, by article 2(2) of that Order.

PenaltiesI1010

Where an enactment referred to in regulation 6, 7 or 9 provides a penalty for an offence which would exceed the limit in paragraph 1(1)(d) of Schedule 2 to the European Communities Act 1972, the limit in that paragraph shall apply to that penalty.

Stephen TimmsMinister of State for Competitiveness and Consumer AffairsDepartment for Business, Enterprise and Regulatory Reform

SCHEDULE

Regulations 6 and 7

F1PART 1MODIFICATIONS TO PART 7 OF THE COMPANIES ACT 1985

Annotations:

Amendments (Textual)

Sch. Pt. 1 omitted (6.4.2008) by virtue of The European Grouping of Territorial Cooperation (Amendment) Regulations 2008 (S.I. 2008/728), regs. 1, 2(7)

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PART 2MODIFICATIONS TO THE INSOLVENCY ACT 1986 AND THE INSOLVENCY (NORTHERN IRELAND) ORDER 1989

I116

Sections 117(2) to (5) (county court jurisdiction), 118 (proceedings taken in the wrong court), 119 (proceedings in county court) and 120(3) and (5) (sheriff court jurisdiction) of the 1986 Act do not apply.

I127

In section 221(1) of the 1986 Act and article 185(1) of the 1989 Order (winding up of unregistered companies) after the words “all the provisions” there shall be added the words “of Regulation (EC) No 1082/2006 of the European Parliament and of the Council and”.

PART 3MODIFICATIONS TO THE INSOLVENCY RULES

I138

Any requirement in the Insolvency Rules to provide the registrar of companies with information in relation to the winding up of an unregistered company, shall not apply where such a company is a UK EGTC.

I149

In rule 4.21 of the Insolvency Rules 198614 and rule 4.021 of the Insolvency Rules (Northern Ireland) 199115 (transmission and advertisement of order) the court is required to serve two copies of the winding-up order on the official receiver.

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make provision supplementing Regulation (EC) No 1082/2006 of the European Parliament and of the Council on a European grouping of territorial cooperation (O.J. No L210, 31.7.2006, p.19) (“the EC Regulation”) for the effective application of the EC Regulation in the United Kingdom.

The EC Regulation provides for the creation of a new form of body corporate, the European grouping of territorial cooperation (“EGTC”). It will be governed by the EC Regulation. An EGTC formed in the United Kingdom will also be governed by these Regulations.

Although directly applicable in the territory of the Community, the EC Regulation obliges each Member State to make arrangements in relation to a prospective member of an EGTC which is formed under its law and in relation to an EGTC the registered office of which is on its territory. The Regulations therefore:

a

make provision as to the establishment of an EGTC and a UK EGTC (regulations 3, 4 and 5(1));

b

contain provisions about what accounts and insolvency provisions are to apply to a UK EGTC (regulations 6 and 7);

c

contain provisions needed to achieve the effective application of the EC Regulation (regulations 5(2) and (3), 9 and 10).

The EC Regulation also enables Member States to exercise options set out in the EC Regulation. Regulation 8 exercises the option in Article 7(3) of the EC Regulation.

An Impact Assessment has not been prepared for this instrument, as it has no impact on business, charities or the voluntary sector.

A Transposition Note is available from the Company Law and Governance Directorate, Department for Business, Enterprise and Regulatory Reform, 1 Victoria Street, London, SW1H 0ET. A copy has also been placed in the libraries of both Houses of Parliament.