Study on administrative costs of the EU Company Law...

Internal Market and Services Directorate General (DG MARKT):

Study on administrative costs of the

EU Company Law Acquis

Final report

July 2007

Internal Market and Services Di-rectorate General (DG MARKT): Study on administrative costs of the EU Company Law Acquis Final report July 2007

Table of contents

SECTION ONE: Introduction........................................................................................... 1 1. Background and objectives of the study ................................................................. 1 2. Organisation ....................................................................................................... 1 3. Structure of the report ......................................................................................... 2

SECTION TWO: Methodological approach and delimitation of the study ........................ 3 1. Methodological approach and design ...................................................................... 3

1.1. Phase 1: Defining the scope of the study .......................................................... 3 1.2. Phase 2: Assessment of the administrative costs ............................................... 8 1.3. Phase 3: Recommendations and suggestions for simplification............................. 12 1.4. Phase 4: Final reporting.................................................................................. 12

2. Information obligations included in the study .......................................................... 12

SECTION THREE: Assessment of administrative costs ................................................. 14 1. Overview of total administrative costs.................................................................... 14 2. Assessments of information obligations .................................................................. 19

2.1. Condensed balance sheet (4th Directive) ........................................................... 19 2.2. Annual report (4th Directive)............................................................................ 24 2.3. Group accounts (7th Directive) ......................................................................... 31 2.4. Capital movement (2nd Directive)..................................................................... 37 2.5. Merger (3rd Directive) ..................................................................................... 51 2.6. De-merger (divisions) (6th Directive) ................................................................ 57 2.7. Extraordinary dividend (2nd Directive)............................................................... 64 2.8. Capital loss (2nd Directive) .............................................................................. 66 2.9. Branches (11th Directive) ................................................................................ 68

SECTION FOUR: Recommendations for simplification .................................................. 70 1. Recommendations for deregulation........................................................................ 71

1.1. Condensed balance sheet................................................................................ 71 1.2. Annual report ................................................................................................ 71 1.3. Group account............................................................................................... 71 1.4. Capital loss, mergers/divisions, extraordinary dividends etc. ............................... 72 1.5. Branches ...................................................................................................... 73

2. Recommendations for targeted regulation .............................................................. 73 3. Digital solutions .................................................................................................. 74

ANNEX ......................................................................................................................... 75 1. Assessments of administrative costs, minutes (per company) ................................... 75 2. Assessments of administrative costs, administrative costs (total) .............................. 79 3. Assessments of administrative costs, minutes by activity (per company).................... 83 4. Assessments of value........................................................................................... 101

Study on administrative costs of the EU Company Law Acquis 1

SECTION ONE: Introduction

This report presents the output of the study on administrative costs of the EU Company Law Acquis. The findings presented in this report are based on the work completed by Rambøll Managements in cooperation with experts from five different countries with detailed knowledge of the compliance with the requirements in the Company Law, and representatives from the Internal Market and Services Direc-torate General (DG MARKT). It shall be noted that the assessments of the administrative workload related to the selected information obligations are the result of a comprehensive collection of data among national experts, followed by discussions of the results at a joint work-shop. All assessments are thus made on basis of the knowledge and expertise of the national experts, making the assessments subject for discussions. However, referring to the methodology applied for the study, the assessments are based on typical activities and models of typical companies within each segment. This section of the report introduces the study by providing a brief outline of the background and objectives of the study, and an overview of the organisations and people involved in the study. Finally, this section includes an overview of the con-tent of the report.

1. Background and objectives of the study

As described in the Action Programme for Reducing Administrative Burdens in the European Union (COM(2007)23), the European Commission in November 2006 proposed the launching of an ambitious Action Programme to reduce the adminis-trative burden of existing regulation in the EU. As part of this, the Commission proposed that the 2007 Spring European Council fix a reduction target of 25 %, to be achieved jointly by the EU and Member States by 2012. With a view to the 25% reduction target, the Company Law Acquis is frequently being mentioned as one area where the Commission should be doing something to reduce administrative burdens. On this background, DG MARKT has decided to carry out a study, identifying those requirements within the EU Company Law Acquis with the highest potential for rule simplification and burden-reduction. The main objectives of the study has thus been to identify requirements within the EU Company Law Acquis with high potential for rule simplification and burden-reduction, to provide an assessment of the administrative costs imposed on busi-nesses by these requirements, and to provide recommendations and suggestions for simplification.

2. Organisation

The study, which was initiated in January 2007, has been lead by Rambøll Man-agement in corporation with representatives from DG MARKT as well as experts from five different countries with detailed knowledge of the compliance with the requirements in the Company Law. The national experts involved in the study rep-resent Member States from different locations within the European Union, and dif-ferent country-sizes, and new and old Member States. The following national ex-perts have been involved in the study:


Country Name and position Company Denmark Mr. Jan Molin, Partner HLB Mortensen & Beierholm Denmark Mr. Morten Normann Alsted, Senior Manager HLB Mortensen & Beierholm Poland Mr. Maciej Hadas, Senior Consultant HLB Frąckowiak i Wspólnicy Sp. z o.o. UK Mr. Simon Noakes, Partner Vantis UK Mrs. Danielle Stewart, partner Vantis France Mr. Eric-Daniel Plenois, Partner HLB Maupard Fiduciaire Portugal Mr. Carlos Rodrigues, Senior Consultant Oliveira, Reis & Associados, SROC, Lda

* All experts represent companies that is a member of HLB International (for more information on HLB International, see hlbi.com)

3. Structure of the report

In addition to this introduction, the status report contains the following sections:

• Section 2 provides an overview of the applied methodological approach and design of the study, including a summary of the activities within the main phases of the study, and a summary of the delimitation of the study with regard to the selection of requirements included.

• In section 3, the output of the assessments made by the national experts

with regard to administrative costs is reported. First, an overview of the assessments of all selected requirements is given, which is followed by a more detailed reporting on the assessments.

• Section 4 includes a summary of the output of discussions between the

national experts on initiatives for rule simplification

• All data collected during the study are included in the annexes.


SECTION TWO: Methodological approach and delimitation of the study

As outlined above, this section provides an overview of the applied methodological approach and design of the study, including a summary of the activities within the main phases of the study, and a summary of the delimitation of the study with re-gard to the selection of requirements included.

1. Methodological approach and design

The activities of the study has followed the tasks and steps outlined and described in the EU Net Administrative Cost Model, as set out in COM (2005) 518 final. In alignment with the objectives of the study, the study has been arranged around four main phases as illustrated in the figure below:

Figure 1: Overview of the methodological approach and study design

Phase 1:

Scoping

Assessment of burdens and value:

Id. of requirements with highest potential for simplification:

Output of workshop

Id. and assessment of requirements:

Long-list based on areas of focus

Workshop with experts

Report and meeting:Reporting of output from workshop

Meeting to discuss report

Phase 2:

Assessment

Standardisation

Calculations:Extrapolation of costs

Data-collection:

Analysis of data

Prioritisation of methods,Recruitment, Basic data (pop’s etc.)Data on costs

Phase 3:

Recommendations

Recommendations:WorkshopReporting

Phase 4:

Reporting

Reporting:Draft final reportFinal report

Below the activities within each of the phases are summarised.

1.1. Phase 1: Defining the scope of the study

As the Company Law Acquis is relatively comprehensive, and as the primary pur-pose of the study is to identify those requirements within the EU Company Law Acquis with the highest potential for rule simplification, a number of activities have been completed to identify these requirements, including:

1. Identification and assessment of the most costly requirements within se-lected parts of the Company Law Acquis

2. Assessment of the value of the identified requirements for the businesses 3. Identification of requirements with a high potential for simplification in

terms of a high level of administrative costs and limited value The identification the most potential requirements have been completed by the involvement of national experts with understanding of the working processes of businesses complying with the national implementation of the EU requirements.


Following the identification of requirements with the highest potential for simplifi-cation in phase 1, data on the administrative costs of these requirements is col-lected in phase 2. Please refer to section three for a description of the suggested activities of phase 2 and 3 of the study.

1.1.1. Information obligations and data requirements

In this study, information obligations are defined as the requirements arising from the EU Company Law Acquis on businesses to provide information and data to the public or third parties. An information obligation is thus a duty for businesses according to the EU Com-pany Law Acquis to procure or prepare information and subsequently make it available to either a public authority or a third party. An information obligation does not necessarily mean that information has to be transferred to the public or private persons, but may include an obligation to keep information available for inspection or supply on request.

Box 1: Examples of information obligations

Information obligations to public authorities: Corporate tax returns, drawing up and registering annual accounts, applying for permits, general obligations to retain business records, provision of information on sick employees to working conditions services, annual statement of employee insurance to social security body, on site control of employee permits. Information obligations to third parties: The obligation of businesses to keep the works council informed, the obligation to supply a financial insert, the obligation of pension funds to provide information to participants, the obligation to supply information on goods labels, instructions for use on medicines and other goods, consignment notes during the transportation of goods, the obligation to pro-vide an invoice for certain transactions.

Each information obligation comprises one or more data requirements. Data re-quirement thus constitute the elements of information that must be provided when complying with an information obligation. In order to comply with an information obligation, businesses must thus fulfil each data requirement subject to the infor-mation obligation. The figure below shows an example of the usage of information obligations and data requirements:


Figure 2: Example of an information obligation with data requirements

Information obligation

Data requirements

Annual Report

4th Directive

Regulation

Auditors report

Management review

Publication

Balance sheet

Due approval

Incomestatement

Notes

Statement by Management

1.1.2. Company categories

The work completed so far in the study, shows that a segmentation according to company size/category is needed. The decision on the company categories used in this study is based on the criteria of the 4th Directive regarding balance sheet to-tals, net turnover, and number of employees. However, these criteria apply only to the annual report and using these criteria will result in a relative large number of small businesses. For these reasons and for the purpose of this study, it has been decided that the group of small companies needs to be separated into two catego-ries: micro companies and small companies. The Commission requested information from the Member States through the Ac-counting Regulatory Committee to define micro companies. On basis of the an-swers from the Member States and the criteria of the Fourth Council Directive, the following company categories apply for this study:

Table 1: Company categories

Company category Micro Small Medium Large Listed com-

panies

Balance sheet total ≤ 500,000 € ≤ 3,650,000 € ≤ 14,600,000 € > 14,600,000 € All

Net turnover ≤ 1,000,000 € ≤ 7,300,000 € ≤ 29,200,000 € > 29,200,000 € All

Number of employees ≤ 10 ≤ 50 ≤ 250 > 250 All


1.1.3. Stakeholders

A Company has a number of different stakeholders. The stakeholders can be illus-trated in the following figure:

Figure 3: Stakeholders

Competitors

Customers

Lenders

Suppliers Public authorities

Employees

Investors

Management

Owners

Company

The punctuated circle around “Owners” and “Management” is to illustrate that these stakeholders in a large number of companies – mainly micro and small – constitute the same group. In the table below, each of the above-illustrated stakeholders are defined:

Table 2: Definitions of stakeholders

Stakeholder Definition

Owners Participating owners, meaning owners who at high level are involved in the opera-tion of the Company

Management Management comprises Board of Directors and Executive Management

Employees The Company’s hired staff, which is not a part of the Management

Investors Owners who are not involved in the operation of the Company

Public Authorities Authorities and agencies under Government as well as EU. E.g. Tax Authorities, Agencies regarding Commerce and Companies, Environment and Competition

Suppliers Companies or persons who are supplying goods or services to the Company

Lenders Companies or persons who are lending money to the Company

Customers Companies or persons who are buying the goods or services, produced by the Company

Competitors Companies or persons who are in the same line of business as the Company


Two categories of stakeholders: internal and external

The stakeholders can be divided into two categories based on their relationship with the Company: internal and external stakeholders.

Internal stakeholders comprise owners, management, and employees as it is expected that these stakeholders have access to internal information re-garding the Company. The extent of access may be different among these stakeholders. External stakeholders comprise the rest of the stakeholders, i.e. investors, public authorities, suppliers, lenders, customers, and competitors. It is ex-pected that these stakeholders have no or limited access to internal infor-mation regarding the Company and consequently may rely on external in-formation.

Stakeholders’ interests and information needs

The stakeholders’ interests are rather different and yet, a number of these inter-ests are alike among the stakeholders. Among the external stakeholders, investors are expected to be the stakeholder, which will require most information in order to predict the potential of the investment. The following external stakeholders have great interest in information disclosing the company’s ability to pay or fulfil its obligations and liabilities:

• Investors • Public Authorities • Suppliers • Lenders • Customers

Regarding the internal stakeholders, it is expected that their interests and informa-tion needs is covered by their access to internal information. With respect to the employees’ access to internal information, many groups of employees do not have this access and consequently, they may rely on external information. As mentioned, the stakeholders have a large number of different interests and in-formation needs. However, it is expected that these different interests and infor-mation needs are covered in many ways, e.g. authorities request of information.

1.1.4. Standard activities (actions)

In accordance with the EU Net Administrative Cost Model the following typology on the type of required actions or standard activities have been applied in order to facilitate reporting and the assessment of administrative costs.

1. Familiarising with the information obligation 2. Training members and employees about the information obligations 3. Retrieving relevant information from existing data 4. Adjusting existing data 5. Producing new data 6. Designing information material (leaflet conception…) 7. Filling forms and tables 8. Holding meetings (internal an external with an auditor, lawyer and the like) 9. Inspecting and checking (including assistance to inspection by public au-

thorities) 10. Copying (reproducing reports, producing labels or leaflets) 11. Submitting the information (sending it to the relevant authority, etc.) 12. Filing the information 13. Other


1.2. Phase 2: Assessment of the administrative costs

As mentioned, the activities of the assessment of the administrative costs have followed the tasks and steps outlined and described in the EU Net Administrative Cost Model.

1.2.1. Process of data collection

The process of data collection is naturally essential for the final analyses and rec-ommendations, and for this reason, process of data collection has been agreed with DG MARKT, before any work was begun. In previous studies on the impact of regulatory requirements on businesses in terms of administrative costs, the primary sources of data on administrative costs have been interviews and workshops with businesses and experts. These sources of data typically provide a valuable input to the standardisation, but also require a significant amount of resources and time. Taking into account the time and finan-cial constraints of the study and the necessity to achieve the overall objectives of the study, a high involvement of experts in the data collection process has been decided. To facilitate the high involvement of experts in the assessments of administrative costs, the Delphi-approach has been chosen. In general, Delphi studies are multi-stage data collection procedures, enabling experts in different locations to engage in a dialogue. The Delphi-approach entails (at least) two rounds of questioning among the na-tional experts. In the first round, the experts have been asked to estimate the ad-ministrative costs of all selected information obligations and data requirements. The assessments have been made in absolute terms and made on basis of the ex-perts’ knowledge on the businesses’ compliance with the requirements. All assess-ments have been expressed in minutes, which express the time it takes one com-pany to fulfil each requirement once. Secondly, the experts have been asked to provide qualitative descriptions of the considerations and assumptions lying behind each assessment. Based on the answers provided by each of the five national experts, the assess-ments and comments have been analysed and presented in a feedback-report, which have been distributed to all experts. On basis of the first round responses, a second-round questionnaire has been drafted and sent to the each expert. The second-round questionnaire included the same questions used in the first-round questionnaires, but in addition, the experts have been provided with a report showing the range of cost estimates and qualita-tive comments collected in the first round for each requirement. Based on this in-formation, each expert has been asked to review or confirm the original considera-tions and cost assessments.

1.2.2. Analysis of data

Similar to the first round, the information collected in the second round, the re-vised assessments and comments have been analysed and presented to the ex-perts. The presentation of the results took place at a joint workshop in Brussels, where all assessments were subject to a critical review. The objective of this exercise have been to provide a single estimate for a normally efficient business to complete each administrative activity to comply with for each of the EU-requirements included in the study.


Additionally, the business’s internal costs and costs for external assistance have been standardised. The standardisation consisted of a critical and qualitative as-sessment of the data collected with a view to identifying the most reliable process and cost of a normally efficient entity within a segment.

1.2.3. Hourly wage rates

The average labour cost varies among staff categories and among EU Member States. The variation among staff categories have been assumed to follow the same pattern in all the five Member States and the variation among Member States have been analysed on the basis of data from Eurostat. Approximately every four years, a labour cost survey is conducted by Eurostat with the aim of gathering updated, empirical data on the costs of the production factor “labour”. The most recent data is collected in 2004. Data has been collected by the National Statistical institutes on the basis of stratified random samples of enter-prises or local units having at least 10 employees. The stratification is based on economic activity, size category, and region. The 2004 labour cost survey was suc-cessfully carried out within all the Member States. The Eurostat data provide a harmonized basis for comparisons of labour costs and its components between European countries. It contains data from all sectors on a two-digit NACE level, and provides a stringent definition of labour cost, which en-sures a good basis for comparison between European countries. The applied labour cost definition takes into account national labour market peculi-arities and includes the total expenditure borne by employers per staff employed, including employee compensation in terms of wages and salaries in cash and in kind, employers social security contributions, vocational training costs, other ex-penditures, such as recruitment costs, spending on working clothes, and employ-ment taxes regarded as labour costs with deduction of any subsidies received. Costs of apprentices are not included in the estimated labour cost. Based on the Eurostat estimates of wage rates and detailed Danish statistics on labour costs for different groups of employees in different sectors (applied in Dan-ish SCM measurements), the hourly wage rate costs applied in this study are shown in the table below:

Table 3: Wage rates

Eurostat Index Danish SCM,

€/hour Applied in

study, €/hour Danish wage rate (€/hour) 31.6 100.0 - -

EU-27 wage rate (€/hour) 21.8 69.1 - -

Finance manager, incl. overhead (internal) - - 64.3 44.8

State authorised public accountant (external) - - 160.0 111.3

1.2.4. Populations

No statistical databases within the European Union include the number of enter-prises targeted by the requirements of the EU Company Law Acquis. For this rea-son, no precise indication of the number of enterprises that prepare and publish an annual report for every financial year can be identified. As no official statistics exists, the total number of enterprises imposed by the re-quirements in the EU Company Law Acquis has been estimated on basis of the to-tal number of enterprises in EU-27 (18.9 million in 2004, Eurostat) and the as-


sumption that one third of these enterprises are targeted by the requirements in the EU Company Law Acquis. As a result, the total number of enterprises imposed by the requirements in the EU Company Law Acquis used in this study amounts to 6.3 million enterprises. Given the usage of the five company categories in this study, the total number of enterprises imposed by the requirements in the EU Company Law Acquis, has been distributed on these company categories on basis of the known distribution of Dan-ish companies (from Danish SCM Baseline measurements). The result of the distri-bution is presented in the table below:

Table 4: Overall populations

Company cate-gory

Micro Small Medium Large Listed Total

Balance sheet total

≤ 500,000 € ≤ 3,650,000 € ≤ 14,600,000 € > 14,600,000 € All -

Net turnover ≤ 1,000,000 € ≤ 7,300,000 € ≤ 29,200,000 € > 29,200,000 € All -

Number of em-ployees

≤ 10 ≤ 50 ≤ 250 > 250 All -

Number of rele-vant enterprises, EU-27

4,431,515 1,477,172 240,273 154,850 7,608 6,311,418

Share of total enterprises

70.2%* 23.4%* 3.8% 2.5% 0.1% 100.0%

* The Danish data from the SCM Baseline measurements do not distinguish between micro and small companies. However, is has been assumed in this study that 75% of the total number of small Danish companies affected by the Company Law regulation constitute micro-companies.

It is clear that not all companies are affected by all requirements of the EU Com-pany Law Acquis. For this reason is has been necessary to assume the share of the total number of enterprises affected by each individual requirement on an annual basis. The table below show the results of the population exercise bases on these assumptions:


Table 5: Populations for information obligations (number of affected businesses per year)

Information obligation

Micro Small Medium Large Listed Total

Share 100.00% 100.00% 100.00% - Annual report

Number N/A N/A

240,273 154,850 7,608 402,731

Share 1.00% 2.00% 3.00% 4.00% - Branches

Number 44,315 29,543 7,208 6,194 N/A

87,261

Share 5.00% 5.00% 3.00% 2.00% 1.00% - Capital Loss

Number 221,576 73,859 7,208 3,097 76 305,816

Share 5.00% 5.00% 5.00% 5.00% 10.00% - Capital move-ment Number 221,576 73,859 12,014 7,743 761 315,951

Share 100.00% 100.00% - Condensed balance sheet Number 4,431,515 1,477,172

N/A N/A N/A 5,908,687

Share 3.00% 3.00% 3.00% 2.00% 1.00% - De-merger (divisions) Number 132,945 44,315 7,208 3,097 76 187,642

Share 10.00% 10.00% 10.00% 10.00% 15.00% - Extraordinary Dividend Number 443,152 147,717 24,027 15,485 1,141 631,522

Share 25% 75% 95% - Group account

Number N/A N/A

60,068 116,138 7,228 183,433

Share 1.00% 1.00% 1.00% 0.50% 0.25% - Merger

Number 44,315 14,772 2,403 774 19 62,283

Share 70.20% 23.40% 3.80% 2.50% 0.10% 100.00% Total

Number 4,431,515 1,477,172 240,273 154,850 7,608 6,311,418

1.2.5. Delimitation of assessments

Compared to previous studies on the impact of regulatory requirements on busi-nesses in terms of administrative costs, this study focuses more directly at provid-ing recommendations for simplification and at providing an overall assessment of the administrative costs imposed on businesses. For this reason, the study has some delimitation as regards the assessments of administrative costs. First, the study takes its point of departure in selected EU requirements of the EU Company Law Acquis and makes thus no attempts to provide an assessment of the total administrative costs imposed on businesses. Second, the study focus solely on the EU requirements as defined in the selected Directives and makes thus no attempt to assess the administrative costs imposed by any additional national requirements imposed on the businesses targeted by the EU Company Law Acquis. This also means that the study provides assessments of the administrative costs imposed on a business that fulfils the requirements as de-fined in the EC Directives. The study thus attempts to assess the administrative costs imposed on an “EU normal efficient business”. Third, it should be noted that the methodological approach chosen for this study and the process of data collection in particular, is not the only possible method of the SCM. The assessments of the total EU administrative costs for the selected re-quirements are thus based on a high involvement of experts from five different countries.


Fourth, the assessments of the administrative costs in this study are based on the overall assumption that all companies comply with the national requirements re-lated to bookkeeping. As this study focuses only on selected EU requirements within the Company Law Acquis, the administrative work and resources related to bookkeeping are excluded from the assessments of this study. The assessments of administrative costs in this study thus solely consider the net resources needed. Since the assessments of the administrative costs are based on an up-dated and reconciled bookkeeping, the administrative costs related to maintain an up-dated and reconciled bookkeeping as well as to any internal management accounting are not included in the assessments. In addition, any fee for national publication is not included in the assessments of the administrative costs.1 Finally, and with regard to the assessments of the administrative costs related to the annual report and the group accounts, the assessments solely include the ad-ministrative costs related to the 4th and the 7th Directives. This means that the as-sessments do not include any administrative costs related to any other interna-tional, Community or national provisions, for instance administrative costs related to the International Financial Reporting Standards (IFRS).

1.3. Phase 3: Recommendations and suggestions for simplification

With the purpose of developing recommendations and suggestions for simplifica-tion of the Company Law Acquis, the results of the assessment process have been presented and discussed with the national experts at a workshop. At the workshop, the results of the assessment process have thus been presented to the experts and followed by a discussion of any initiatives to be taken by the Commission to adapt the current legislation with the purpose of reducing the ad-ministrative burdens. The primary focus of the workshop have thus been to develop recommendations for rule simplification, by discussing the assessed administrative costs of the se-lected requirements and by discussing the value of a given requirement for busi-nesses currently affected by the requirements in terms of stakeholder-needs.

1.4. Phase 4: Final reporting

A draft final report was submitted to the Commission in June 2007. The content of the draft final report was discussed with the Steering Group in the beginning of July 2007, and this final report is thus based on the comments made by DG MARKT at this meeting.

2. Information obligations included in the study

The scope of the study has been limited to the assessment of administrative costs for up to ten information obligations. In the status report submitted to DG MARKT in April 2007, a suggestion of which information obligations to include in the as-sessment-phase was therefore presented to the Commission. Following the meeting on the status report, the Commission decided to include the following information obligation is the assessment-phase:

1 In Germany, the publication of annual accounts in the electronic national gazette costs 50€ for small

companies, 70€ for medium-sized companies, and (on average) 1,000€ for big companies (depending on

number of letters); in the Czech Republic, the publication of the annual accounts costs 7,300 CZK.


Table 6: Information obligations included in the study

Information obligation Directive

Condensed balance sheet 4th Directive

Annual report 4th Directive

Group accounts 7th Directive

Capital movement 2nd Directive

Merger 3rd Directive

De-merger (divisions) 6th Directive

Extraordinary dividend 2nd Directive

Capital loss 2nd Directive

Branches 11th Directive


SECTION THREE: Assessment of administrative costs

As mentioned in the previous sections, experts from five different countries with detailed knowledge of the compliance with the requirements in the Company Law have been asked to assess the administrative workload of companies related to the fulfilment of selected requirements of the EU Company Law Acquis. The national experts have been asked to assess the administrative workload in two survey-rounds, setting the basis for joint discussions at a workshop. In this section, the output of the assessments made by the national experts with regard to administrative costs is reported. First, an overview of the assessments of all selected requirements is given, which is followed by a more detailed reporting on the assessments.

1. Overview of total administrative costs

The tables below summarises the assessments made by the national experts of the total administrative costs imposed on companies in the European Union (EU 27) for the selected requirements of the EU Company Law Acquis. The tables show the total administrative costs for each company category and for each information ob-ligation. The tables also show the total internal costs and the total external costs.

Table 7: Assessment of total administrative costs, micro companies*

Information obligation Internal costs

per year, € External costs

per year, € Total costs per

year, € Popula-

tion/year

Branches 6,611,200 14,798,000 21,409,200 44,320

Capital Loss - 36,995,000 36,995,000 221,580

Capital movement - 694,683,200 694,683,200 221,580

Condensed balance sheet - 4,932,661,400 4,932,661,400 4,431,520

De-merger (divisions) 31,237,700 319,389,900 350,627,500 132,950

Extraordinary Dividend 29,750,200 - 29,750,200 443,160

Merger 9,916,800 107,696,500 117,613,200 44,320

* All numbers are rounded

Table 8: Assessment of total administrative costs, small companies*




year, € Popula-

tion/year

Branches 4,407,500 13,153,800 17,561,200 29,550

Capital Loss - 12,331,700 12,331,700 73,860


Condensed balance sheet 332,760,600 1,145,473,600 1,478,234,200 1,477,180



Merger 3,305,600 35,898,900 39,204,400 14,780



Table 9: Assessment of total administrative costs, medium companies*




year, € Popula-

tion/year

Annual report 93,197,000 3,824,455,900 3,917,652,900 240,280

Branches 1,398,000 4,011,700 5,409,700 7,210

Capital Loss - 2,005,900 2,005,900 7,210




Group account 49,062,900 394,146,300 443,209,200 60,070

Merger 2,043,200 8,179,400 10,222,600 2,410


Table 10: Assessment of total administrative costs, large companies*




year, € Popula-

tion/year

Annual report 236,787,900 4,326,277,600 4,563,065,400 154,860

Branches 1,201,300 6,894,500 8,095,800 6,200

Capital Loss 450,500 603,300 1,053,800 3,100

Capital movement 15,044,700 38,566,000 53,610,700 7,750



Group account 343,053,600 1,090,187,500 1,433,241,100 116,140

Merger 1,865,500 3,404,200 5,269,600 780


Table 11: Assessment of total administrative costs, listed companies*




year, € Popula-

tion/year

Annual report 22,190,700 707,436,700 729,627,300 7,610

Capital Loss - - - -

Capital movement 23,300 18,400 41,700 80

De-merger (divisions) 2,914,300 6,994,000 9,908,300 770

Extraordinary Dividend 393,400 687,400 1,080,700 80

Group account 204,400 - 204,400 1,150

Merger 53,802,600 222,591,300 276,393,900 7,230

* All numbers are rounded It is clear from the tables that the requirements related to the annual report, the condensed balance sheet and the group accounts are the most burdensome re-quirements, which is due to both a high number of affected businesses and to a relatively high administrative costs per company per year. For these requirements, the tables above also show a relatively high involvement of external advisors, i.e. typically accountants or auditors. For the annual report, the experts have thus assessed that approx 90% of the administrative workload is handled by resources external to the companies. For the condensed balance sheet, the experts assess that all administrative tasks are completed externally for the


micro companies, and that approx 60% of the total workload among small compa-nies is handled externally. For the group accounts, the experts have assessed that between 55% and 75% of the administrative tasks are completed externally. The division between internal and external resources for these requirements are also show in the diagrams below:

Figure 4: Internal and external resources for selected requirements (minutes per company)

- 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

Internal time

External time

Internal time

External time

Internal time

External time

Mediu

mLa

rge

List

ed

Annual report

- 100 200 300 400 500 600

Internal time

External time

Internal time

External time

Mic

roS

mall

Condensed balance sheet- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

Internal time

External time

Internal time

External time

Internal time

External time

Mediu

mLa

rge

List

ed

Group account

The tables below show the assessment made by the experts of the administrative workload for each information obligation per company/year in minutes and for each company category.

Table 12: Assessment of administrative workload, micro companies

Information obligation Internal time, minutes

per company/year External time, minutes

per company/year Total time, minutes per company/year

Branches 200 180 380

Capital Loss - 90 90

Capital movement - 1,690 1,690

Condensed balance sheet - 600 600

De-merger (divisions) 315 1,295 1,610

Extraordinary Dividend 90 - 90

Merger 300 1,310 1,610


Table 13: Assessment of administrative workload, small companies







Condensed balance sheet 302 418 720

De-merger (divisions) 315 1,295 1,610


Merger 300 1,310 1,610

Table 14: Assessment of administrative workload, medium companies




Annual report 520 8,580 9,100




De-merger (divisions) 1,080 1,895 2,975


Group account 1,095 3,537 4,632

Merger 1,140 1,835 2,975

Table 15: Assessment of administrative workload, large companies




Annual report 2,050 15,060 17,110


Capital Loss 195 105 300

Capital movement 2,605 2,685 5,290



Group account 3,960 5,060 9,020

Merger 3,230 2,370 5,600

Table 16: Assessment of administrative workload, listed companies




Annual report 3,910 50,120 54,030

Capital Loss 410 130 540

Capital movement 5,135 4,955 10,090



Group account 9,979 16,600 26,579

Merger 6,900 4,900 11,800

For all requirements the tables show that the total administrative workload in-creases according to the company categories, illustrating that larger companies are imposed with a higher administrative workload than smaller companies are. How-


ever, it is important to keep in mind that the administrative workload for the smaller companies typically has a higher importance for these companies than it has for larger companies. It is thus important to note that the impact of the administrative workload must seen in relation to the general economy of the companies within each segment, as the administrative workload of the smaller companies typically take up a larger share of the resources available in the small companies, than it is the case in the larger companies. As some information obligations are enforced on companies in certain situations, the administrative workload for the selected information obligations must not be aggregated. In case of aggregation, the analysis will show a case where a given company is targeted with all recurring and ad-hoc requirements, which will be in-consistent with the activities of most companies.


2. Assessments of information obligations

In the following, the assessments made on the information obligations included in the study are presented, i.e. the following information obligations:

• Condensed balance sheet (4th Directive) • Annual report (4th Directive) • Group accounts (7th Directive) • Capital movement (2nd Directive) • Merger (3rd Directive) • De-merger (divisions) (6th Directive) • Extraordinary dividend (2nd Directive) • Capital loss (2nd Directive) • Branches (11th Directive)

2.1. Condensed balance sheet (4th Directive)

According to the 4th Directive, micro and small companies are required to prepare and publish a condensed balance sheet for every financial year. Compared to the requirements to the annual reports, the condensed balance sheet contains fewer requirements (see the description of the requirements of the annual report below). According to article 11 of the 4th Directive, the following requirements apply to the condensed balance sheet:

• Statement by Management on the condensed balance sheet • Balance sheet • Notes • Due approval • Publication

The national experts have discussed the process of preparing and publication of a condensed balance sheet complying with these requirements and in continuation of this, the national experts have agreed on an assessment of the administrative workload in terms of internal and external working hours. The assessments of nec-essary administrative activities and administrative workload have been made ac-cording to both micro and small companies. The outcomes of the discussions are reported in the following. As mentioned in section two, the assessments of the administrative costs in this study are based upon the overall assumption that all companies comply with the national requirements related to bookkeeping. As this study focuses only on se-lected EU requirements within the Company Law Acquis, the administrative work and resources related to bookkeeping are excluded from the assessments of this study. The assessments of the administrative costs in this study are thus based on the overall assumption that all companies have all the necessary documentation before the preparation of the condensed balance sheet begins. The assessments of administrative costs in this study thus solely consider the net resources needed to prepare the condensed balance sheet. Since the assessments of the administrative costs are based upon the assumption that the condensed balance sheet is prepared on basis of an up-dated and recon-ciled bookkeeping, the administrative costs related to maintain an up-dated and reconciled bookkeeping as well as to any internal management accounting are not included in the assessments. However, it is assumed that in connection with the preparation, a few actions of book closing are needed, e.g. cut off, calculation of depreciations, tax etc.


It should also be noted that any fee for national publication is not included in the assessments of the administrative costs.

2.1.1. Micro companies

The national experts have first assessed that micro companies typically outsource the administrative work related to the condensed balance sheet to external advi-sors, i.e. typically accountants or auditors. The main reason for this is that these very small companies typically do not hold the required competencies in-house. For this reason, it has been concluded in this study, that micro companies out-source the administrative work related to preparing and publication of a condensed balance sheet. All administrative costs are thus external to these companies. As shown in the table below, the national experts have assessed that it takes ap-proximately 10 hours of administrative work for an accountant or an auditor to prepare, approve and publish a condensed balance sheet for a micro company. These 10 hours, equalling 600 minutes, are divided on the relevant data require-ments as shown in the table below:

Table 17: Assessment of administrative costs: Condensed balance sheet, micro companies

Time per company (minutes) Total costs, €* Data requirement Internal

time External

time Total time

Internal costs

External costs Total costs Pop./year*

Statement by Man-agement (article 11)

- 50 50 - 411,055,200 411,055,200 4,431,520

Balance sheet (article 11)

- 200 200 - 1,644,220,500 1,644,220,500 4,431,520

Notes (article 11) - 220 220 - 1,808,642,600 1,808,642,600 4,431,520

Due approval (article 11)

- 115 115 - 945,426,800 945,426,800 4,431,520

Publication (article 11)

- 15 15 - 123,316,600 123,316,600 4,431,520

Total - 600 600 - 4,932,661,400 4,932,661,400 4,431,520

* All numbers are rounded In addition to the assumptions regarding bookkeeping etc. (see above), the as-sessments of the administrative costs are based on the assumption that the typical micro company goes through the following steps when preparing and publishing a condensed balance sheet:

• Collect data based on reconciled books • Collect documentation for the reconciled books • Prepare and compile the statements • Prepare and compile the notes • Prepare the documentation for the statements and notes • Perform the board meeting regarding the approval of the condensed ba-

lance sheet • Approve and sign the condensed balance sheet by the management and

the board • Perform the meeting with the shareholder(s) • Prepare the minutes • Submit the condensed balance sheet to the authorities for publication

The assessments of the administrative costs are based on this workflow, and the analytical estimation that preparation of the condensed balance sheet includes the preparation of the balance sheet and the notes, while the board meeting and mee-ting with shareholder(s) covers the due approval. The total administrative costs


related to the preparation of the condensed balance sheet amounts to approx 78% of the total administrative costs, while the due approval amounts to approx 19%, and while the publication amounts to approx 3%. As shown in the diagram below, most of the administrative workload related to the condensed balance sheet for the micro companies is related to the production of new data (57%), while approx 20% of the total workload is related to meetings. Adjustments of existing data and the submission of the condensed balance sheet are less dominant.

Figure 5: Administrative activities, condensed balance sheet, micro companies

Producing new data57%

Holding meetings

23%

Adjusting existing data

4%

Submitting the information

5%Retrieving relevant

information from existing

data11%

2.1.2. Small companies

With regard to the small companies, the national experts have assessed that these companies typically outsource most of the administrative work related to the con-densed balance sheet to external advisors, i.e. typically accountants or auditors. Similar to the micro companies, the small companies typically do not hold the re-quired competencies in-house. For this reason, it has been concluded in this study, that small companies outsource most of the administrative work related to prepar-ing and publication of a condensed balance sheet. Most of the administrative costs are thus external to these companies. As shown in the table below, the national experts have assessed that it takes ap-proximately 12 hours of administrative work to prepare, approve and publish a condensed balance sheet for a micro company. These 12 hours, equalling 720 min-utes, are divided on the relevant data requirements as shown in the table below:


Table 18: Assessment of administrative costs: Condensed balance sheet, small companies

Time per company (minutes) Total costs* Data require-ment Internal

time External

time Total time

Internal costs

External costs Total costs

Pop./ year*

Statement by Management (article 11)

80 150 230 40,768,700 104,134,000 144,902,700 1,477,180


170 - 170 88,148,500 411,055,200 499,203,700 1,477,180

Notes (article 11) - 230 230 - 630,284,600 630,284,600 1,477,180


15 - 15 187,315,600 - 187,315,600 1,477,180

Publication (arti-cle 11)

37 38 75 16,527,900 - 16,527,900 1,477,180

Total 302 418 720 332,760,600 1,145,473,600 1,478,234,200 1,477,180

* All numbers are rounded In addition to the assumptions regarding bookkeeping etc. (see above), the as-sessments of the administrative costs are based on the assumption that the typical small company goes through the following steps when preparing and publishing a condensed balance sheet:

• Collect data based on reconciled books • Collect documentation for the reconciled books • Prepare and compile the statements • Prepare and compile the notes • Prepare the documentation for the statements and notes • Perform the board meeting regarding the approval of the condensed ba-

lance sheet • Approve and sign the condensed balance sheet by the management and

the board • Perform the meeting with the shareholder(s) • Prepare the minutes • Submit the condensed balance sheet to the authorities for publication

The assessments of the administrative costs are based on this workflow, and the analytical estimation that preparation of the condensed balance sheet includes the preparation of the balance sheet and the notes, while the board meeting and mee-ting with shareholder(s) covers the due approval. The total administrative costs related to the preparation of the condensed balance sheet amounts to approx 90% of the total administrative costs, while the due approval amounts to approx 1%, and while the publication amounts to approx 10%. As shown in the diagram below, most of the administrative workload related to the condensed balance sheet for the small companies is connected to the production of new data (65%), while approx 17% of the total workload is related to meetings. Approx 10% of the total administrative workload is related to the retrieval of rele-vant information from existing data, while, adjustments of existing data and the submission of the condensed balance sheet are less dominant.


Figure 6: Administrative activities, condensed balance sheet, small companies

Retrieving relevant

information from existing

data11%


3%


4%Holding

meetings17%



2.2. Annual report (4th Directive)

According to the 4th Directive, medium, large and listed companies are required to prepare and publish an annual report for every financial year. As mentioned above, the 4th Directive contains more requirements to the annual report than to the con-densed balance sheet. According to the 4th Directive, the following requirements apply to the annual report:

• Management review (article 46) • Statement by Management on the annual report (article 47) • Income statement (article 2) • Balance sheet (article 2) • Notes (article 2) • Auditors' report (article 51) • Due approval (article 47) • Publication (article 47-50)

The national experts have discussed the process of preparing and publication of an annual report complying with these requirements and in continuation of this, the national experts have agreed on an assessment of the administrative workload in terms of internal and external working hours. The assessments of necessary ad-ministrative activities and administrative workload have been made according to medium, large and listed companies. The outcomes of the discussions are reported in the following. As mentioned in section two, the assessments of the administrative costs in this study are based upon the overall assumption that all companies comply with the national requirements related to bookkeeping. As this study focuses only on se-lected EU requirements within the Company Law Acquis, the administrative work and resources related to bookkeeping are excluded from the assessments of this study. The assessments of the administrative costs in this study are thus based on the overall assumption that all companies have all the necessary documentation before the preparation of the annual report begins. The assessments of administra-tive costs in this study thus solely consider the net resources needed to prepare the annual report. Since the assessments of the administrative costs are based upon the assumption that the annual report is prepared on basis of an up-dated and reconciled book-keeping, the administrative costs related to maintain an up-dated and reconciled bookkeeping, preparation of documentation hereof as well as to any internal man-agement accounting are not included in the assessments. It should also be noted that any fee for national publication is not included in the assessments of the ad-ministrative costs. Finally, it should be noted that the assessments of the administrative costs related to the annual report solely include the administrative costs related to the 4th Direc-tive, excluding any administrative costs related to any other international, Com-munity or national provisions, for instance administrative costs related to the In-ternational Financial Reporting Standards (IFRS). The assessed administrative costs of the annual report are including the costs of external audit, as this cost is shown under the Data requirement “Auditors’ report”.


2.2.1. Medium companies

With regard to the medium companies, the national experts have assessed that these companies typically outsource most of the administrative work related to the annual report to external advisors, i.e. typically accountants or auditors. Similar to the micro and small companies, the medium companies typically do not hold the required competencies in-house. For this reason, it has been concluded in this study, that medium companies outsource most of the administrative work related to preparing and publication of the annual report. Most of the administrative costs are thus external to these companies. As shown in the table below, the national experts have assessed that it takes ap-proximately 26 hours of administrative work to prepare, approve and publish an annual report for a medium company and 126 hours to perform the audit and issue the auditors’ report. These approx. 152 hours equalling 9.100 minutes, are divided on the relevant data requirements as shown in the table below:

Table 19: Assessment of administrative costs: Annual report, medium companies

Time per company (min-utes)

Total costs, €*

Data requirement Inter-nal

time

Exter-nal

time

Total time

Internal costs


Pop./ year*

Management review (article 46)

80 60 140 14,338,000 26,744,500 41,082,500 240,280


10 30 40 1,792,300 13,372,300 15,164,500 240,280

Income statement (article 2)

110 330 440 19,714,800 147,094,500 166,809,200 240,280


110 330 440 19,714,800 147,094,500 166,809,200 240,280

Notes (article 2) 110 270 380 19,714,800 120,350,100 140,064,800 240,280

Auditors' report (arti-cle 51)

- 7,560 7,560 - 3,369,800,300 3,369,800,300 240,280


85 - 85 15,234,200 - 15,234,200 240,280

Publication (article 47-50)

15 - 15 2,688,400 - 2,688,400 240,280

Total 520 8,580 9,100 93,197,000 3,824,455,900 3,917,652,900 240,280

* All numbers are rounded In addition to the assumptions regarding bookkeeping etc. (see above), the as-sessments of the administrative costs are based on the assumption that the typical medium company goes through the following steps when preparing and publishing an annual report:

• Collect data based on reconciled books • Collect documentation for the reconciled books • Collect any other documentation or information relevant for the audit • Prepare and compile the statements • Prepare and compile the notes • Prepare the management review • Prepare the documentation for the statements and notes • Audit the annual report based on the documentation, including preparation

of the independent auditors report • Closing meeting between the management and the independent auditor • Perform the board meeting regarding the approval of the annual report • Approve and sign the annual report by the management, the board and the

independent auditor


• Perform the meeting with the shareholder(s) • Prepare the minutes • Submit the annual report to the authorities for publication

The assessments of the administrative costs are based on this workflow, and the analytical estimation that preparation of the annual report includes the preparation of the income statement, the balance sheet and the notes, while the board meet-ing and meeting with shareholder(s) covers the due approval. The total administra-tive costs related to the preparation of the annual report amounts to approx 12% of the total administrative costs, while the audit amounts to approx 85%. As mentioned, it has been assessed by the national experts that most of the ad-ministrative work is handled by external advisors. The assessments made by the experts are thus that approx 5% of the total workload is made in-house, while the remaining work is completed by an accountant. The internal time mostly relates to retrieval of relevant information from existing data, which is needed for the prepa-ration of the income statement, the balance sheet, and for the notes. As shown in the diagram below, most of the administrative workload related to the annual report for the medium companies is connected to reconciliation (inspection and checking), i.e. the work completed by the auditor (86%). Approx 9% of the total administrative workload is related to the production of new data, while meet-ings, retrieval and adjustments of existing data and the submission of the annual report are less dominant.

Figure 7: Administrative activities, annual report, medium companies


0%


Retrieving relevant information from

existing data2%

Adjusting existing data1%

Holding meetings2%

Inspecting and checking

86%

2.2.2. Large companies

With regard to the large companies, the national experts have assessed that these companies typically performs most of the activities in-house, except for the audit, which is performed by the auditors. The reason for no involvement of external as-sistance with respect to the preparation of the annual report is that the large com-pany holds the competence itself. For this reason, it has been concluded in this study, that large companies handles most of the administrative work related to the annual report in-house.


As shown in the table below, the national experts have assessed that it takes ap-proximately 34 hours of administrative work to prepare, approve and publish an annual report for a large company and 251 hours to perform the audit and issue the auditors’ report. These approx. 285 hours, equalling 17.110 minutes, are di-vided on the relevant data requirements as shown in the table below:

Table 20: Assessment of administrative costs: Annual report, large companies


Total costs, €*


time

Exter-nal

time

Total time

Internal costs


Pop./ year*


225 - 225 25,989,000 - 25,989,000 154,860


60 - 60 6,930,400 - 6,930,400 154,860


555 - 555 64,106,000 - 64,106,000 154,860

Balance sheet (arti-cle 2)

555 - 555 64,106,000 - 64,106,000 154,860

Notes (article 2) 555 - 555 64,106,000 - 64,106,000 154,860


- 15,060 15,060 - 4,326,277,600 4,326,277,600 154,860


85 - 85 9,818,100 - 9,818,100 154,860

Publication (article 47-50)

15 - 15 1,732,600 - 1,732,600 154,860

Total 2,050 15,060 17,110 236,787,900 4,326,277,600 4,563,065,400 154,860

* All numbers are rounded In addition to the assumptions regarding bookkeeping etc. (see above), the as-sessments of the administrative costs are based on the assumption that the typical large company goes through the following steps when preparing and publishing an annual report:



independent auditor • Perform the meeting with the shareholder(s) • Prepare the minutes • Submit the annual report to the authorities for publication

The assessments of the administrative costs are based on this workflow, and the analytical estimation that preparation of the annual report includes the preparation of the income statement, the balance sheet and the notes, while the board mee-ting and meeting with shareholder(s) covers the due approval. The total adminis-trative costs related to the preparation of the annual report amounts to approx 4% of the total administrative costs, while the audit amounts to approx 95%.


As mentioned, it has been assessed by the national experts that these companies typically performs most of the activities in-house, except for the audit, which is performed by the auditors. However, as the auditors report is also the most domi-nant requirement, the share of internal resources thus amount to approx 10% of the total administrative work. As shown in the diagram below, most of the administrative workload related to the annual report for the large companies is connected to reconciliation (inspection and checking), i.e. the work completed by the auditor (95%). Approx 3% of the total administrative workload is related to the production of new data, while meetings, retrieval and adjustments of existing data and the submission of the annual report are less dominant.

Figure 8: Administrative activities, annual report, large companies


95%

Holding meetings1%



existing data1%



0%

2.2.3. Listed companies

Similar to the large companies, the national experts have assessed that listed com-panies typically performs most of the activities in-house, except for the audit, which is performed by the auditors. The reason for no involvement of external as-sistance with respect to the preparation of the annual report is that the listed com-pany holds the competence itself and the auditors are not allowed in order to maintain their independence. For this reason, it has been concluded in this study, that listed companies handle most of the administrative work related to the annual report in-house. As shown in the table below, the national experts have assessed that it takes ap-proximately 65 hours of administrative work to prepare, approve and publish an annual report for a listed company and 835 hours to perform the audit and issue the auditors’ report. These approx. 900 hours, equalling 54.030 minutes, are di-vided on the relevant data requirements as shown in the table below:


Table 21: Assessment of administrative costs: Annual report, listed companies


time Exter-

nal time Total time

Internal costs

External costs

Total costs

Pop./ year*

Management review (arti-cle 46)

405 - 405 2,298,600 - 2,298,600 7,610

Statement by Manage-ment (article 47)

105 - 105 596,000 - 596,000 7,610


1,050 - 1,050 5,959,200 - 5,959,200 7,610

Balance sheet (article 2) 1,050 - 1,050 5,959,200 - 5,959,200 7,610

Notes (article 2) 1,050 - 1,050 5,959,200 - 5,959,200 7,610

Auditors' report (article 51)

- 50,120 50,120 - 707,436,700 707,436,700 7,610

Due approval (article 47) 235 - 235 1,333,800 - 1,333,800 7,610

Publication (article 47-50) 15 - 15 85,200 - 85,200 7,610

Total 3,910 50,120 54,030 22,190,700 707,436,700 729,627,300 7,610

* All numbers are rounded In addition to the assumptions regarding bookkeeping etc. (see above), the as-sessments of the administrative costs are based on the assumption that the typical listed company goes through the following steps when preparing and publishing an annual report:



independent auditor • Perform the meeting with the shareholders • Prepare the minutes • Submit the annual report to the authorities for publication

The assessments of the administrative costs are based on this workflow, and the analytical estimation that preparation of the annual report includes the preparation of the income statement, the balance sheet and the notes, while the board mee-ting and meeting with shareholders covers the due approval. The total administra-tive costs related to the preparation of the annual report amounts to approx 2% of the total administrative costs, while the audit amounts to approx 97%. It should be noted that the assessment of the administrative workload for listed companies, has been made on basis of the typical type of listed companies. The assessments does thus not apply to minor listed companies quoted at for instance the AIM Stock Exchange in London or First North (operated by OMX) which are tar-geted at smaller companies. Companies quoted at such marketplaces are included in the assessments of administrative costs for large companies.


As mentioned, it has been assessed by the national experts that these companies typically performs most of the activities in-house, except for the audit, which is performed by the auditors. However, as the auditors report is also the most domi-nant requirement, the share of internal resources thus amount to approx 7% of the total administrative work. As shown in the diagram below, most of the administrative workload related to the annual report for the large companies is connected to reconciliation (inspection and checking), i.e. the work completed by the auditor (96%), while the production of new data, meetings, retrieval and adjustments of existing data and the submission of the annual report are much less dominant.

Figure 9: Administrative activities, annual report, listed companies


0%



existing data1%


Holding meetings1%


96%


2.3. Group accounts (7th Directive)

According to the 7th Directive, medium, large and listed groups are required to pre-pare and publish group accounts for every financial year. According to the 7th Di-rective, the following requirements apply to the group accounts:

• Management review (article 36) • Statement by Management on the group accounts (article 38) • Income statement (article 16) • Balance sheet (article 16) • Notes (article 16) • Auditors' report (article 37)

The national experts have discussed the process of preparing and publication of the group account complying with these requirements and in continuation of this, the national experts have agreed on an assessment of the administrative workload in terms of internal and external working hours. The assessments of necessary ad-ministrative activities and administrative workload have been made according to medium, large and listed groups. The outcomes of the discussions are reported in the following. The assessments made by the national experts with regard to the group accounts, are based on the assumption that the group accounts are prepared on the basis of audited reporting for each company in the group including the parent company. Consequently, the administrative costs related to these audited reportings are not included in the administrative costs related to the group accounts. In case one or several of the subsidiaries should not have established fully audited annual ac-counts, the administrative costs of the group accounts would therefore increase. In addition, it should be noted that the assessments of the administrative costs related to the group accounts, solely include the administrative costs related to the 7th Directives, excluding any administrative costs related to any other international, Community or national provisions, for instance administrative costs related to the International Financial Reporting Standards (IFRS). Finally, it should be noted that the resources needed are assessed on the assump-tion that the group accounts are an integrated part of the annual report for the parent company. Consequently, the assessed administrative costs below are only related to the group accounts itself.

2.3.1. Medium groups

With regard to the medium groups, the national experts have first assumed that a medium group contains 3 companies on an average. In addition, it is the assess-ments of the national experts that approx half of the estimated administrative costs for medium groups relates to work performed by employees of the group ex-cept the audit, which is performed by the auditors. The reason for this split is that the medium groups hold some of the competence itself. As shown in the table below, the national experts have assessed that it takes ap-proximately 32 hours of administrative work to prepare the group accounts for a medium group and 44 hours to perform the audit of the group accounts. These approx 75 hours equalling approx 4.600 minutes, are divided on the relevant data requirements as shown in the table below:


Table 22: Assessment of administrative costs: Group accounts, medium groups


time Exter-

nal time Total time

Internal costs

External costs

Total costs

Pop./ year*

Management review (arti-cle 36)

200 100 300 8,961,300 11,143,600 20,104,800 60,070

Statement by Manage-ment (article 38)

85 25 110 3,808,600 2,785,900 6,594,500 60,070


200 210 410 8,961,300 23,401,400 32,362,700 60,070

Balance sheet (article 16) 190 290 480 8,513,200 32,316,300 40,829,400 60,070

Notes (article 16) 420 265 685 18,818,700 29,530,400 48,349,000 60,070

Auditors' report (article 37)

- 2,647 2,647 - 294,969,000 294,969,000 60,070

Total 1,095 3,537 4,632 49,062,900 394,146,300 443,209,200 60,070

* All numbers are rounded The assessments of the administrative costs are based on the assumption that the typical medium group goes through the following steps when preparing the group accounts:

• Communicate with the subsidiaries regarding the process and the informa-tion needed

• Receive the subsidiaries' audited reporting (annual report) • Prepare the consolidation of the subsidiaries' audited reporting and the

parents company's audited books • Collect documentation and other relevant information regarding the con-

solidation • Prepare and compile the statements for the group • Prepare and compile the notes for the group • Prepare the management review for the group • Prepare the documentation for the consolidation etc. • Audit the group accounts based on the documentation, including prepara-

tion of the independent auditors report • Closing meeting between the management and the independent auditor

regarding the group accounts The assessments of the administrative costs are based on this workflow, and the analytical estimation that preparation of the group accounts includes the prepara-tion of the income statement, the balance sheet and the notes. The total administrative costs related to the preparation of the group accounts amounts to approx 27% of the total administrative costs and the audit amounts to approx 67%. As mentioned, it has been assessed by the national experts that most of the ad-ministrative work is handled by external advisors. The assessments made by the experts are thus that approx 75% of the total workload is made externally, while the remaining work is completed in-house. As shown in the diagram below, most of the administrative workload related to the group account for the medium groups is connected to reconciliation (inspection and checking), i.e. the work completed by the auditor (65%), while the production of new data (19%), retrieval of existing data (6%), meetings (4%) and other activi-ties are less dominant.


Figure 10: Administrative activities, group accounts, medium groups


1%

Training members and employees about the

IO2%


existing data6%

Filling forms and tables

0%

Designing information material

2%



65%

Holding meetings4%


2.3.2. Large groups

With regard to the large groups, the national experts have first assumed that a large group contains 8 companies on an average. In addition, it is the assessments of the national experts that that all the estimated administrative costs for large groups relates to work performed by employees of the group except the audit, which is performed by the auditors. The reason for no involvement of external as-sistance with respect to the preparation of the group accounts is that the large group holds the competence itself. As shown in the table below, the national experts have assessed that it takes ap-proximately 62 hours of administrative work to prepare the group accounts for a large group and 88 hours to perform the audit of the group accounts. These approx 150 hours equalling approx 9.000 minutes, are divided on the relevant data re-quirements as shown in the table below:

Table 23: Assessment of administrative costs: Group accounts, large groups


time External

time Total time

Internal costs


Pop./ year*


585 - 585 50,678,400 - 50,678,400 116,140


170 - 170 14,727,100 - 14,727,100 116,140


845 - 845 73,202,100 - 73,202,100 116,140


860 - 860 74,501,600 - 74,501,600 116,140

Notes (article 16) 1,280 - 1,280 110,886,000 - 110,886,000 116,140


220 5,060 5,280 19,058,600 1,090,187,500 1,109,246,000 116,140

Total 3,960 5,060 9,020 343,053,600 1,090,187,500 1,433,241,100 116,140



The assessments of the administrative costs are based on the assumption that the typical large group goes through the following steps when preparing the group ac-counts:






regarding the group accounts The assessments of the administrative costs are based on this workflow, and the analytical estimation that preparation of the group accounts includes the prepara-tion of the income statement, the balance sheet and the notes. The total administrative costs related to the preparation of the group accounts amounts to approx 18% of the total administrative costs and the audit amounts to approx 77%. As mentioned, it has been assessed by the national experts that most of the ad-ministrative work is handled by external advisors. The assessments made by the experts are thus that approx 55% of the total workload is made externally, while the remaining work is completed in-house. As shown in the diagram below, most of the administrative workload related to the group account for the large groups is connected to reconciliation (inspection and checking), i.e. the work completed by the auditor (76%), while the production of new data (10%), retrieval of existing data (4%), and other activities are less dominant.


Figure 11: Administrative activities, group accounts, large groups


1%


IO3%


existing data4%


1%


2%



76%

Holding meetings2%


2.3.3. Listed groups

With regard to the listed groups, the national experts have first assumed that a listed group contains 25 companies on an average. In addition, it is the assess-ments of the national experts that that all the estimated administrative costs for listed groups relates to work performed by employees of the group except the au-dit, which is performed by the auditors. The reason for no involvement of external assistance with respect to the preparation of the group accounts is that the listed group holds the competence itself and the auditors are not allowed in order to maintain their independence. As shown in the table below, the national experts have assessed that it takes ap-proximately 155 hours of administrative work to prepare the group accounts for a listed group and 288 hours to perform the audit of the group accounts. These approx 443 hours equalling approx 26.600 minutes, are divided on the relevant data requirements as shown in the table below:

Table 24: Assessment of administrative costs: Group accounts, listed groups


time Exter-

nal time Total time

Internal costs

External costs

Total costs

Pop./ year*


1,341 - 1,341 7,230,200 - 7,230,200 7,230

Statement by Management (article 38)

335 - 335 1,806,200 - 1,806,200 7,230


2,251 - 2,251 12,136,500 - 12,136,500 7,230

Balance sheet (article 16) 2,281 - 2,281 12,298,200 - 12,298,200 7,230

Notes (article 16) 3,081 - 3,081 16,611,500 - 16,611,500 7,230

Auditors' report (article 37) 690 16,600 17,290 3,720,200 222,591,300 226,311,500 7,230

Total 9,979 16,600 26,579 53,802,600 222,591,300 276,393,900 7,230



The assessments of the administrative costs are based on the assumption that the typical large group goes through the following steps when preparing the group ac-counts:






regarding the group accounts The assessments of the administrative costs are based on this workflow, and the analytical estimation that preparation of the group accounts includes the prepara-tion of the income statement, the balance sheet and the notes. The total administrative costs related to the preparation of the group accounts amounts to approx 15% of the total administrative costs and the audit amounts to approx 82%. As mentioned, it has been assessed by the national experts that most of the ad-ministrative work is handled by external advisors. The assessments made by the experts are thus that approx 62% of the total workload is made externally, while the remaining work is completed in-house. As shown in the diagram below, most of the administrative workload related to the group account for the listed groups is connected to reconciliation (inspection and checking), i.e. the work completed by the auditor (79%), while the production of new data (8%), retrieval of existing data (4%), and other activities are less domi-nant.

Figure 12: Administrative activities, group accounts, listed groups


1%


IO3%


existing data4%


1%


2%



79%

Holding meetings1%



2.4. Capital movement (2nd Directive)

According to the 2nd Directive, all companies (from micro to listed) are required to prepare and publish the following documents as well as perform the following meeting etc.:

• Any increase in capital must be decided upon by the general meeting (arti-cle 25)

• Any increase in capital must be registered (published) with relevant au-thority (article 25)

• Publication of a new set of Articles of Association in connection with the in-crease in capital (1. directive, article 2)

• Where shares are issued for a consideration other than cash, securities and financial instruments, cf. Art. 10a, the consideration shall be the subject of a written report prepared by independent expert (article 27)

• Publication of the independent expert's written report regarding the above matter (article 27)

• If shares are issued for a consideration of securities and financial instru-ments, cf. Art. 10a, without a written report prepared by independent ex-pert, a statement by management shall be published (article 27)

• If the company, within two year after its formation, acquires any asset other than securities and financial instruments, cf. Art. 10a, belonging to a person or company or firm who signed the statutes for a consideration of no less than one-tenth of the subscribed capital, the consideration shall be the subject of a written report prepared by independent expert (article 11)

• Publication of the independent expert's written report regarding the above matter (article 11)

• If the asset acquired comprise securities and financial instruments, cf. Art. 10a, and the acquisition takes place without a written report prepared by independent expert, a statement by management shall be published (arti-cle 11)

• General meeting for approval of the company's acquisition of asset belong-ing to a person or company or firm who signed the statutes (article 11)

• General meeting for approval of the company's acquisition of its own shares (article 19)

• Any reduction in the subscribed capital must be decided upon by the gen-eral meeting (article 30)

• Any reduction in the subscribed capital must be registered (published) with relevant authority (article 30)

• An adequate system of protection of the interests of creditors of when the company is reducing its subscribed capital (article 32)

• Publication of a new set of Articles of Association in connection with the re-duction in the subscribed capital (1. directive, article 2)

• General meeting for approval of the decision of total or partial redemption of the subscribed capital without reduction of the latter (article 35)

• General meeting for approval of the decision of reduce the subscribed capi-tal by compulsory withdrawal of shares (article 36)

The national experts have discussed the process of complying with these require-ments and in continuation of this, the national experts have agreed on an assess-ment of the administrative workload in terms of internal and external working hours. The assessments of necessary administrative activities and administrative workload have been made according to all companies. The outcomes of the discus-sions are reported in the following.


The assessments made by the national experts with regard to capital movement, are based on the assumption that any negotiations between any parties have been finalised and that all parties agree on the terms etc. Furthermore as mentioned in section two, the assessments of the administrative costs in this study are based upon the overall assumption that all companies com-ply with the national requirements related to bookkeeping. As this study focuses only on selected EU requirements within the Company Law Acquis, the administra-tive work and resources related to bookkeeping are excluded from the assessments of this study. The assessments of the administrative costs in this study are thus based on the overall assumption that all the necessary documentation is completed before the preparation of the above listed requirements begins. The assessments of administrative costs in this study thus solely consider the net resources needed to prepare the above listed requirements. It should also be noted that any fee for national publication is not included in the assessments of the administrative costs.

2.4.1. Assessment of administrative costs

The assessments of the administrative costs are based on the assumption that the typical company goes through the following steps when complying with the re-quirements: Any increase in capital must be decided upon by the general meeting (article 25)

• Prepare the agenda • Convene the general meeting • Submitting information to the shareholders • Perform the general meeting • Prepare the minutes

Any increase in capital must be registered (published) with relevant authority (arti-cle 25)

• Filling forms • Copying of documents • Submit the information

Publication of a new set of Articles of Association in connection with the increase in capital (1. directive, article 2)

• Prepare the new set of Articles of Association • Filling forms • Copying of documents • Submit the information

Where shares are issued for a consideration other than cash, securities and finan-cial instruments, cf. Art. 10a, the consideration shall be the subject of a written report prepared by independent expert (article 27)

• Collect documentation • Perform the work • Prepare the written report by independent expert • Closing meeting • Approval and sign the document

Publication of the independent expert's written report regarding the above matter (article 27)



If shares are issued for a consideration of securities and financial instruments, cf. Art. 10a, without a written report prepared by independent expert, a statement by management shall be published (article 27)

• Collect documentation • Prepare the statement • Approval and sign the document • Filling forms • Copying of documents • Submit the information

If the company, within two year after its formation, acquires any asset other than securities and financial instruments, cf. Art. 10a, belonging to a person, company, or firm who signed the statutes for a consideration of no less than one-tenth of the subscribed capital, the consideration shall be the subject of a written report pre-pared by independent expert (article 11)


Publication of the independent expert's written report regarding the above matter (article 11)


If the asset acquired comprise securities and financial instruments, cf. Art. 10a, and the acquisition takes place without a written report prepared by independent expert, a statement by management shall be published (article 11)

• Collect documentation • Prepare the statement • Approval and sign the document • Filling forms • Copying of documents • Submit the information

General meeting for approval of the company's acquisition of asset belonging to a person, company, or firm who signed the statutes (article 11)


General meeting for approval of the company's acquisition of its own shares (arti-cle 19)


Any reduction in the subscribed capital must be decided upon by the general meet-ing (article 30)

• Prepare the agenda • Convene the general meeting • Submitting information to the shareholders


• Perform the general meeting • Prepare the minutes

Any reduction in the subscribed capital must be registered (published) with rele-vant authority (article 30)


An adequate system of protection of the interests of creditors of when the com-pany is reducing its subscribed capital (article 32) The process depends on how each Member State has implemented this require-ment. In order to include the requirement in the measurement, the example is a statement issued by the independent expert.

• Collect documentation • Perform the work • Prepare the statement by independent expert • Approval and sign the document

Publication of a new set of Articles of Association in connection with the reduction in the subscribed capital (1. directive, article 2)

• Prepare the new set of Articles of Association • Filling forms • Copying of documents • Submit the information

General meeting for approval of the decision of total or partial redemption of the subscribed capital without reduction of the latter (article 35)


General meeting for approval of the decision of reduce the subscribed capital by compulsory withdrawal of shares (article 36)


The assessments of the administrative costs are based on the above listed work-flow with respect to the preparation of the documents as well as performing the following meeting, etc. The workflow is the same for the companies in all the cate-gories. However, the extent and complexity increase with the size of the company and consequently, the minutes and costs show the same trend. It has further been assessed by the national experts that with respect to micro, small and medium companies, the administrative work is handled by external advi-sors. With respect to large and listed companies, it has been assessed by the na-tional experts that the administrative work is handled in-house as well as by exter-nal advisors. The tables below show the assessments made of the administrative costs for all company categories in terms of internal and external working hours per company, and the total administrative costs for each requirement related to capital move-ment:


Table 25: Assessment of administrative costs: Capital movement, micro companies

Time per company (minutes) Total costs, €** Data requirement* Internal

time External

time Total time

Internal costs

External costs

Total costs

Pop./ year**

Any increase in capital must be decided upon by the general meeting (arti-cle 25)

- 85 85 - 34,939,700 34,939,700 221,580

Any increase in capital must be registered (pub-lished) with relevant au-thority (article 25)

- 50 50 - 20,552,800 20,552,800 221,580

Publication of a new set of Articles of Association in connection with the in-crease in capital (1. direc-tive, article 2)

- 80 80 - 32,884,500 32,884,500 221,580

Where shares are issued for a consideration other than cash, securities and financial instruments, cf. Art. 10a, the considera-tion shall be the subject of a written report pre-pared by independent expert (article 27)

- 255 255 - 104,819,100 104,819,100 221,580

Publication of the inde-pendent expert's written report regarding the above matter (article 27)

- 50 50 - 20,552,800 20,552,800 221,580

If shares are issued for a consideration of securities and financial instruments, cf. Art. 10a, without a written report prepared by independent expert, a statement by manage-ment shall be published (article 27)

- 125 125 - 51,381,900 51,381,900 221,580

If the company, within two year after its forma-tion, acquires any asset other than securities and financial instruments, cf. Art. 10a, belonging to a person or company or firm who signed the stat-utes for a consideration of no less than one-tenth of the subscribed capital, the consideration shall be the subject of a written report prepared by inde-pendent expert (article 11)

- 255 255 - 104,819,100 104,819,100 221,580


- 50 50 - 20,552,800 20,552,800 221,580



time External

time Total time

Internal costs

External costs

Total costs

Pop./ year**

If the asset acquired comprise securities and financial instruments, cf. Art. 10a, and the acquisi-tion takes place without a written report prepared by independent expert, a statement by manage-ment shall be published (article 11)

- 125 125 - 51,381,900 51,381,900 221,580

General meeting for ap-proval of the company's acquisition of asset be-longing to a person or company or firm who signed the statutes (arti-cle 11)

- 85 85 - 34,939,700 34,939,700 221,580

General meeting for ap-proval of the company's acquisition of its own shares (article 19)

- 85 85 - 34,939,700 34,939,700 221,580

Any reduction in the sub-scribed capital must be decided upon by the gen-eral meeting (article 30)

- 85 85 - 20,552,800 20,552,800 221,580

Any reduction in the sub-scribed capital must be registered (published) with relevant authority (article 30)

- 50 50 - 34,939,700 34,939,700 221,580

An adequate system of protection of the interests of creditors of when the company is reducing its subscribed capital (article 32)

- 60 60 - 24,663,400 24,663,400 221,580

Publication of a new set of Articles of Association in connection with the re-duction in the subscribed capital (1. directive, arti-cle 2)

- 80 80 - 32,884,500 32,884,500 221,580

General meeting for ap-proval of the decision of total or partial redemp-tion of the subscribed capital without reduction of the latter (article 35)

- 85 85 - 34,939,700 34,939,700 221,580

General meeting for ap-proval of the decision of reduce the subscribed capital by compulsory withdrawal of shares (ar-ticle 36)

- 85 85 - 34,939,700 34,939,700 221,580

Total - 1,690 1,690 - 694,683,200 694,683,200 221,580

* All data requirements originate from the 2nd Directive, unless other Directive is mentioned ** All numbers are rounded


Table 26: Assessment of administrative costs: Capital movement, small companies


time External

time Total time

Internal costs

External costs

Total costs

Pop./ year**


- 85 85 - 11,646,600 11,646,600 73,860


- 50 50 - 6,851,000 6,851,000 73,860


- 80 80 - 10,961,500 10,961,500 73,860


- 255 255 - 34,939,700 34,939,700 73,860


- 50 50 - 6,851,000 6,851,000 73,860


- 125 125 - 17,127,300 17,127,300 73,860


- 255 255 - 34,939,700 34,939,700 73,860


- 50 50 - 6,851,000 6,851,000 73,860



time External

time Total time

Internal costs

External costs

Total costs

Pop./ year**


- 125 125 - 17,127,300 17,127,300 73,860


- 85 85 - 11,646,600 11,646,600 73,860


- 85 85 - 11,646,600 11,646,600 73,860


- 85 85 - 6,851,000 6,851,000 73,860


- 50 50 - 11,646,600 11,646,600 73,860


- 60 60 - 8,221,200 8,221,200 73,860


- 80 80 - 10,961,500 10,961,500 73,860


- 85 85 - 11,646,600 11,646,600 73,860


- 85 85 - 11,646,600 11,646,600 73,860

Total - 1,690 1,690 - 231,561,100 231,561,100 73,860



Table 27: Assessment of administrative costs: Capital movement, medium companies


time External

time Total time

Internal costs

External costs

Total costs

Pop./ year**


- 155 155 - 3,454,500 3,454,500 12,020


- 50 50 - 1,114,400 1,114,400 12,020


- 110 110 - 2,451,600 2,451,600 12,020


- 510 510 - 11,366,400 11,366,400 12,020


- 50 50 - 1,114,400 1,114,400 12,020


- 200 200 - 4,457,500 4,457,500 12,020


- 510 510 - 11,366,400 11,366,400 12,020


- 50 50 - 1,114,400 1,114,400 12,020



time External

time Total time

Internal costs

External costs

Total costs

Pop./ year**


- 200 200 - 4,457,500 4,457,500 12,020


- 155 155 - 3,454,500 3,454,500 12,020


- 155 155 - 3,454,500 3,454,500 12,020


- 155 155 - 1,114,400 1,114,400 12,020


- 50 50 - 3,454,500 3,454,500 12,020


- 120 120 - 2,674,500 2,674,500 12,020


- 110 110 - 2,451,600 2,451,600 12,020


- 155 155 - 3,454,500 3,454,500 12,020


- 155 155 - 3,454,500 3,454,500 12,020

Total - 2,890 2,890 - 64,409,600 64,409,600

12,020



Table 28: Assessment of administrative costs: Capital movement, large companies


time External

time Total time

Internal costs

External costs

Total costs

Pop./ year**


200 95 295 1,155,100 1,364,600 2,519,600 7,750


- 50 50 - 718,200 718,200 7,750


60 110 170 346,600 1,580,000 1,926,600 7,750


510 510 1,020 2,945,500 7,325,400 10,270,800 7,750


- 50 50 - 718,200 718,200 7,750


250 100 350 1,443,900 1,436,400 2,880,200 7,750


510 510 1,020 2,945,500 7,325,400 10,270,800 7,750


- 50 50 - 718,200 718,200 7,750



time External

time Total time

Internal costs

External costs

Total costs

Pop./ year**


- 350 350 - 5,027,300 5,027,300 7,750


205 90 295 1,184,000 1,292,800 2,476,700 7,750


205 90 295 1,184,000 1,292,800 2,476,700 7,750


205 90 295 - 718,200 718,200 7,750


- 50 50 1,184,000 1,292,800 2,476,700 7,750


- 240 240 - 3,447,300 3,447,300 7,750


50 120 170 288,800 1,723,700 2,012,400 7,750


205 90 295 1,184,000 1,292,800 2,476,700 7,750


205 90 295 1,184,000 1,292,800 2,476,700 7,750

Total 2,605 2,685 5,290 15,044,700 38,566,000 53,610,700 7,750



Table 29: Assessment of administrative costs: Capital movement, listed companies


time External

time Total time

Internal costs

External costs

Total costs

Pop./ year**

Any increase in capital must be decided upon by the general meeting (article 25)

375 200 575 212,900 282,300 495,200 770

Any increase in capital must be registered (published) with relevant authority (ar-ticle 25)

- 50 50 - 70,600 70,600 770

Publication of a new set of Articles of Association in connection with the increase in capital (1. directive, arti-cle 2)

120 170 290 68,200 240,000 308,100 770

Where shares are issued for a consideration other than cash, securities and finan-cial instruments, cf. Art. 10a, the consideration shall be the subject of a written report prepared by inde-pendent expert (article 27)

1,020 1,020 2,040 578,900 1,439,800 2,018,700 770

Publication of the independ-ent expert's written report regarding the above matter (article 27)

- 50 50 - 70,600 70,600 770

If shares are issued for a consideration of securities and financial instruments, cf. Art. 10a, without a writ-ten report prepared by in-dependent expert, a state-ment by management shall be published (article 27)

480 170 650 272,500 240,000 512,400 770

If the company, within two year after its formation, acquires any asset other than securities and financial instruments, cf. Art. 10a, belonging to a person or company or firm who signed the statutes for a considera-tion of no less than one-tenth of the subscribed capital, the consideration shall be the subject of a written report prepared by independent expert (article 11)

1,020 1,020 2,040 578,900 1,439,800 2,018,700 770

Publication of the independ-ent expert's written report regarding the above matter (article 11)

- 50 50 - 70,600 70,600 770

If the asset acquired com-prise securities and financial instruments, cf. Art. 10a, and the acquisition takes place without a written re-port prepared by independ-ent expert, a statement by management shall be pub-lished (article 11)

- 650 650 - 917,500 917,500 770



time External

time Total time

Internal costs

External costs

Total costs

Pop./ year**

General meeting for ap-proval of the company's acquisition of asset belong-ing to a person or company or firm who signed the stat-utes (article 11)

400 175 575 227,100 247,100 474,100 770


400 175 575 227,100 247,100 474,100 770

Any reduction in the sub-scribed capital must be de-cided upon by the general meeting (article 30)

400 175 575 - 70,600 70,600 770

Any reduction in the sub-scribed capital must be reg-istered (published) with relevant authority (article 30)

- 50 50 227,100 247,100 474,100 770

An adequate system of pro-tection of the interests of creditors of when the com-pany is reducing its sub-scribed capital (article 32)

- 480 480 - 677,600 677,600 770

Publication of a new set of Articles of Association in connection with the reduc-tion in the subscribed capi-tal (1. directive, article 2)

120 170 290 68,200 240,000 308,100 770

General meeting for ap-proval of the decision of total or partial redemption of the subscribed capital without reduction of the latter (article 35)

400 175 575 227,100 247,100 474,100 770

General meeting for ap-proval of the decision of reduce the subscribed capi-tal by compulsory with-drawal of shares (article 36)

400 175 575 227,100 247,100 474,100 770

Total 5,135 4,955 10,090 2,914,300 6,994,000 9,908,300 770



2.5. Merger (3rd Directive)

According to the 3rd Directive, all companies (from micro to listed) are required to prepare and publish the following documents as well as perform the following meeting, notifications etc.:

• Notification (publication) to relevant authority of decision for merger (arti-cle 6)

• Terms of merger in writing (article 5) • Written report by management (article 9) • Written report by independent expert (article 10) • Accounting statement (article 11) • General meeting (article 7) • An adequate system of protection of the interests of creditors of the merg-

ing companies (article 13) • Certification of documents by the notary (article 16) • Notification to relevant authority of final decision for merger (article 18) • Duty of information to third part regarding the merger (article 18)

The national experts have discussed the process of complying with these require-ments and in continuation of this, the national experts have agreed on an assess-ment of the administrative workload in terms of internal and external working hours. The assessments of necessary administrative activities and administrative workload have been made according to all companies. The outcomes of the discus-sions are reported in the following. The assessments made by the national experts with regard to merger, are based on the assumption that the negotiations between the merging companies have been finalised and that all parties agree on the terms etc. The assessments of the administrative activities and the administrative workload are also based on the as-sumption that the date of merger is within 6 months after the balance sheet date, which means that the accounting statement is based on audited information from the annual reports prior to the date of merger. Furthermore as mentioned in section two, the assessments of the administrative costs in this study are based upon the overall assumption that all companies com-ply with the national requirements related to bookkeeping. As this study focuses only on selected EU requirements within the Company Law Acquis, the administra-tive work and resources related to bookkeeping are excluded from the assessments of this study. The assessments of the administrative costs in this study are thus based on the overall assumption that all companies have all the necessary docu-mentation before the preparation of the above listed requirements begins. The as-sessments of administrative costs in this study thus solely consider the net re-sources needed to prepare the above listed requirements. It should also be noted that any fee for national publication is not included in the assessments of the ad-ministrative costs.


The assessments of the administrative costs are based on the assumption that the typical company goes through the following steps when complying with the re-quirements: Notification (publication) to relevant authority of decision for merger (article 6)



Terms of merger in writing (article 5) • Collect data • Prepare the terms of merger in writing • Prepare the documentation for the terms of merger in writing • Closing meeting • Approval and sign the document

Written report by management (article 9)

• Collect data • Prepare the written report by management • Prepare the documentation for the written report by management • Closing meeting • Approval and sign the document

Written report by independent expert (article 10)


Accounting statement (article 11)

• Collect data based on reconciled books • Collect documentation for the reconciled books • Collect any other documentation or information relevant for the audit • Prepare and compile the statement • Prepare and compile the notes • Prepare the documentation for the statement and notes • Audit the accounting statement based on the documentation, including

preparation of the independent auditors report • Closing meeting • Approval and sign the document

General meeting (article 7)


An adequate system of protection of the interests of creditors of the merging com-panies (article 13) The process depends on how each Member State has implemented this require-ment. In order to include the requirement in the measurement, the example is a statement issued by the independent expert.

• Collect documentation • Perform the work • Prepare the statement by independent expert • Sign the document

Notification to relevant authority of final decision for merger (article 18)


Duty of information to third part regarding the merger (article 18)

• Inform third parties.


The assessments of the administrative costs are based on the above listed work-flow with respect to the preparation of the documents as well as performing the following meeting, notifications etc. The workflow is the same for the companies in all the categories. However, the extent and complexity increase with the size of the company and consequently, the minutes and costs show the same trend. It has further been assessed by the national experts that with respect to micro and small companies and partly medium companies, most of the administrative work is handled by external advisors. With respect to large and listed companies, it has been assessed by the national experts that most of the administrative work is han-dled in-house. The tables below show the assessments made of the administrative costs for all company categories in terms of internal and external working hours per company, and the total administrative costs for each requirement related to mergers:

Table 30: Assessment of administrative costs: Merger, micro companies


time External

time Total time

Internal costs

External costs

Total costs

Pop./ year*

Notification (publication) to relevant authority of decision for merger (arti-cle 6)

- 50 50 - 4,110,600 4,110,600 44,320

Terms of merger in writ-ing (article 5)

105 240 345 3,470,900 19,730,700 23,201,500 44,320

Written report by man-agement (article 9)

75 240 315 2,479,200 19,730,700 22,209,900 44,320

Written report by inde-pendent expert (article 10)

30 195 225 991,700 16,031,200 17,022,900 44,320


30 405 435 991,700 33,295,500 34,287,200 44,320


- 70 70 - 5,754,800 5,754,800 44,320

An adequate system of protection of the interests of creditors of the merg-ing companies (article 13)

- 60 60 - 4,932,700 4,932,700 44,320


- 50 50 - 4,110,600 4,110,600 44,320


60 - 60 1,983,400 - 1,983,400 44,320

Total 300 1,310 1,610 9,916,800 107,696,500 117,613,200 44,320



Table 31: Assessment of administrative costs: Merger, small companies


time External

time Total time

Internal costs

External costs

Total costs

Pop./ year*

Notification (publication) to relevant authority of decision for merger (arti-cle 6)

- 50 50 - 1,370,200 1,370,200 14,780

Terms of merger in writ-ing (article 5)

105 240 345 1,157,000 6,576,900 7,733,900 14,780


75 240 315 826,400 6,576,900 7,403,300 14,780


30 195 225 330,600 5,343,800 5,674,300 14,780


30 405 435 330,600 11,098,500 11,429,100 14,780


- 70 70 - 1,918,300 1,918,300 14,780

An adequate system of protection of the interests of creditors of the merg-ing companies (article 13)

- 60 60 - 1,644,300 1,644,300 14,780


- 50 50 - 1,370,200 1,370,200 14,780


60 - 60 661,200 - 661,200 14,780

Total 300 1,310 1,610 3,305,600 35,898,900 39,204,400 14,780



Table 32: Assessment of administrative costs: Merger, medium companies


Total costs, €* Data requirement

Internal time

External time

Total time

Internal costs

External costs

Total costs

Pop./ year*

Notification (publication) to relevant authority of deci-sion for merger (article 6)

- 50 50 - 222,900 222,900 2,410

Terms of merger in writing (article 5)

450 240 690 806,600 1,069,800 1,876,300 2,410

Written report by manage-ment (article 9)

450 180 630 806,600 802,400 1,608,900 2,410

Written report by independ-ent expert (article 10)

60 390 450 107,600 1,738,400 1,846,000 2,410

Accounting statement (arti-cle 11)

120 750 870 215,100 3,343,100 3,558,200 2,410

General meeting (article 7) - 85 85 - 378,900 378,900 2,410

An adequate system of pro-tection of the interests of creditors of the merging companies (article 13)

- 90 90 - 401,200 401,200 2,410

Notification to relevant au-thority of final decision for merger (article 18)

- 50 50 - 222,900 222,900 2,410


60 - 60 107,600 - 107,600 2,410

Total 1,140 1,835 2,975 2,043,200 8,179,400 10,222,600 2,410


Table 33: Assessment of administrative costs: Merger, large companies


Total costs, €* Data requirement

Internal time

External time

Total time

Internal costs

External costs

Total costs

Pop./ year*


- 50 50 - 71,900 71,900 780


960 360 1,320 554,500 517,100 1,071,600 780


900 300 1,200 519,800 431,000 950,700 780


120 720 840 69,400 1,034,200 1,103,500 780


1,000 680 1,680 577,600 976,800 1,554,300 780

General meeting (article 7) 130 30 160 75,100 43,100 118,200 780


- 180 180 - 258,600 258,600 780


- 50 50 - 71,900 71,900 780


120 - 120 69,400 - 69,400 780

Total 3,230 2,370 5,600 1,865,500 3,404,200 5,269,600 780



Table 34: Assessment of administrative costs: Merger, listed companies


time External

time Total time

Internal costs

External costs

Total costs

Pop./ year*


- 50 50 - 1,800 1,800 20


1,760 880 2,640 25,000 31,100 56,100 20


1,600 800 2,400 22,800 28,300 51,000 20


240 1,440 1,680 3,500 50,900 54,300 20


2,100 1,260 3,360 29,800 44,500 74,300 20

General meeting (article 7) 960 60 1,020 13,700 2,200 15,800 20


- 360 360 - 12,800 12,800 20


- 50 50 - 1,800 1,800 20


240 - 240 3,500 - 3,500 20

Total 6,900 4,900 11,800 97,900 173,000 270,900 20



2.6. De-merger (divisions) (6th Directive)

According to the 6th Directive, all companies (from micro to listed) are required to prepare and publish the following documents as well as perform the following meeting, notifications etc.:

• Notification (publication) to relevant authority of decision for de-merger (article 4)

• Terms of de-merger in writing (article 3) • Written report by management (article 7) • Written report by independent expert (article 8) • Accounting statement (article 9) • General meeting (article 6) • An adequate system of protection of the interests of creditors of the de-

merging companies (article 12) • Notification to relevant authority of final decision for de-merger (article 16) • Duty of information to third part regarding the de-merger (article 16)

The national experts have discussed the process of complying with these require-ments and in continuation of this, the national experts have agreed on an assess-ment of the administrative workload in terms of internal and external working hours. The assessments of necessary administrative activities and administrative workload have been made according to all companies. The outcomes of the discus-sions are reported in the following. The assessments made by the national experts with regard to de-merger (divi-sion), are based on the assumption that the negotiations between the de-merging companies have been finalised and that all parties agree on the terms etc. The as-sessments of the administrative activities and the administrative workload are also based on the assumption that the date of de-merger (division) is within 6 months after the balance sheet date, which means that the accounting statement is based on audited information from the annual reports prior to the date of merger. Furthermore as mentioned in section two, the assessments of the administrative costs in this study are based upon the overall assumption that all companies com-ply with the national requirements related to bookkeeping. As this study focuses only on selected EU requirements within the Company Law Acquis, the administra-tive work and resources related to bookkeeping are excluded from the assessments of this study. The assessments of the administrative costs in this study are thus based on the overall assumption that all companies have all the necessary docu-mentation before the preparation of the above listed requirements begins. The as-sessments of administrative costs in this study thus solely consider the net re-sources needed to prepare the above listed requirements. It should also be noted that any fee for national publication is not included in the assessments of the ad-ministrative costs.


The assessments of the administrative costs are based on the assumption that the typical company goes through the following steps when complying with the re-quirements: Notification (publication) to relevant authority of decision for de-merger (division) (article 4)



Terms of de-merger (division) in writing (article 3) • Collect data • Prepare the terms of de-merger (division) in writing • Prepare the documentation for the terms of de-merger (division) in writing • Closing meeting • Approval and sign the document

Written report by management (article 7)

• Collect data • Prepare the written report by management • Prepare the documentation for the written report by management • Closing meeting • Approval and sign the document

Written report by independent expert (article 8)



• Collect data based on reconciled books • Collect documentation for the reconciled books • Collect any other documentation or information relevant for the audit • Prepare and compile the statement • Prepare and compile the notes • Prepare the documentation for the statement and notes • Audit the accounting statement based on the documentation, including

preparation of the independent auditors report • Closing meeting • Approval and sign the document



An adequate system of protection of the interests of creditors of the de-merging companies (article 12) The process depends on how each Member State has implemented this require-ment. In order to include the requirement in the measurement, the example is a statement issued by the independent expert.

• Collect documentation • Perform the work • Prepare the statement by independent expert • Sign the document

Notification to relevant authority of final decision for de-merger (division) (article 16)



Duty of information to third part regarding the de-merger (division) (article 16) • Inform third parties.

The assessments of the administrative costs are based on the above listed work-flow with respect to the preparation of the documents as well as performing the following meeting, notifications etc. The workflow is the same for the companies in all the categories. However, the extent and complexity increase with the size of the company and consequently, the minutes and costs show the same trend. It has further been assessed by the national experts that with respect to micro and small companies and partly medium companies, most of the administrative work is handled by external advisors. With respect to large and listed companies, it has been assessed by the national experts that most of the administrative work is han-dled in-house. The tables below show the assessments made of the administrative costs for all company categories in terms of internal and external working hours per company, and the total administrative costs for each requirement related to de-merger (divi-sion):

Table 35: Assessment of administrative costs: Divisions, micro companies


Total costs, €*


time

Exter-nal

time

Total time

Internal costs

External costs

Total costs

Pop./ year*

Notification (publica-tion) to relevant au-thority of decision for de-merger (article 4)

- 50 50 - 12,331,700 12,331,700 133,000

Terms of de-merger in writing (article 3)

105 240 345 10,412,600 59,192,000 69,604,500 133,000


75 240 315 7,437,600 59,192,000 66,629,500 133,000


30 195 225 2,975,100 48,093,500 51,068,500 133,000


45 390 435 4,462,600 96,186,900 100,649,500 133,000


- 70 70 - 17,264,400 17,264,400 133,000

An adequate system of protection of the inter-ests of creditors of the de-merging companies (article 12)

- 60 60 - 14,798,000 14,798,000 133,000

Notification to relevant authority of final deci-sion for de-merger (ar-ticle 16)

- 50 50 - 12,331,700 12,331,700 133,000

Duty of information to third part regarding the de-merger (article 16)

60 - 60 5,950,100 - 5,950,100 133,000

Total 315 1,295 1,610 31,237,700 319,389,900 350,627,500 133,000



Table 36: Assessment of administrative costs: Divisions, small companies


Total costs, €*


time

Exter-nal

time

Total time

Internal costs

External costs

Total costs

Pop./ year*

Notification (publica-tion) to relevant au-thority of decision for de-merger (article 4)

- 50 50 - 4,110,600 4,110,600 44,400

Terms of de-merger in writing (article 3)

105 240 345 3,470,900 19,730,700 23,201,500 44,400


75 240 315 2,479,200 19,730,700 22,209,900 44,400


30 195 225 991,700 16,031,200 17,022,900 44,400


45 390 435 1,487,600 32,062,300 33,549,900 44,400

General meeting (arti-cle 6)

- 70 70 - 5,754,800 5,754,800 44,400

An adequate system of protection of the inter-ests of creditors of the de-merging companies (article 12)

- 60 60 - 4,932,700 4,932,700 44,400

Notification to relevant authority of final deci-sion for de-merger (ar-ticle 16)

- 50 50 - 4,110,600 4,110,600 44,400


60 - 60 1,983,400 - 1,983,400 44,400

Total 315 1,295 1,610 10,412,600 106,463,300 116,875,900 44,400



Table 37: Assessment of administrative costs: Divisions, medium companies


Total costs, €*


time

Exter-nal

time

Total time

Internal costs

External costs

Total costs

Pop./ year*

Notification (publication) to relevant authority of deci-sion for de-merger (article 4)

- 50 50 - 668,700 668,700 7,300

Terms of de-merger in writ-ing (article 3)

450 240 690 2,419,600 3,209,400 5,628,900 7,300


390 240 630 2,097,000 3,209,400 5,306,300 7,300


60 390 450 322,700 5,215,200 5,537,800 7,300


120 750 870 645,300 10,029,200 10,674,400 7,300

General meeting (article 6) - 85 85 - 1,136,700 1,136,700 7,300

An adequate system of pro-tection of the interests of creditors of the de-merging companies (article 12)

- 90 90 - 1,203,600 1,203,600 7,300

Notification to relevant au-thority of final decision for de-merger (article 16)

- 50 50 - 668,700 668,700 7,300


60 - 60 322,700 - 322,700 7,300

Total 1,080 1,895 2,975 5,806,900 25,340,400 31,147,300 7,300



Table 38: Assessment of administrative costs: Divisions, large companies


Total costs, €*


time

Exter-nal

time

Total time

Internal costs

External costs

Total costs

Pop./ year*


- 50 50 - 287,300 287,300 3,100


960 360 1,320 2,217,800 2,068,400 4,286,100 3,100


900 300 1,200 2,079,200 1,723,700 3,802,800 3,100


120 720 840 277,300 4,136,700 4,413,900 3,100


1,000 680 1,680 2,310,200 3,906,900 6,217,000 3,100

General meeting (article 6) 130 30 160 300,400 172,400 472,700 3,100


- 180 180 - 1,034,200 1,034,200 3,100


- 50 50 - 287,300 287,300 3,100


120 - 120 277,300 - 277,300 3,100

Total 3,230 2,370 5,600 7,461,800 13,616,600 21,078,300 3,100



Table 39: Assessment of administrative costs: Divisions, listed companies


Total costs, €*


time

Exter-nal

time

Total time

Internal costs

External costs

Total costs

Pop./ year*


- 50 50 - 7,100 7,100 100


1,760 880 2,640 99,900 124,300 224,100 100


1,600 800 2,400 90,900 113,000 203,800 100


240 1,440 1,680 13,700 203,300 216,900 100


2,100 1,260 3,360 119,200 177,900 297,100 100

General meeting (article 6) 990 30 1,020 56,200 4,300 60,500 100


- 360 360 - 50,900 50,900 100


- 50 50 - 7,100 7,100 100


240 - 240 13,700 - 13,700 100

Total 6,930 4,870 11,800 393,400 687,400 1,080,700 100



2.7. Extraordinary dividend (2nd Directive)

According to the 2nd Directive, all companies (from micro to listed) are required to prepare the following documentation:

• Documentation requirements regarding extraordinary dividend, e.g. Ac-counting statement (article 15)

The national experts have discussed the process of complying with these require-ments and in continuation of this, the national experts have agreed on an assess-ment of the administrative workload in terms of internal and external working hours. The assessments of necessary administrative activities and administrative workload have been made according to all companies. The outcomes of the discus-sions are reported in the following. As mentioned in section two, the assessments of the administrative costs in this study are based upon the overall assumption that all companies comply with the national requirements related to bookkeeping. As this study focuses only on se-lected EU requirements within the Company Law Acquis, the administrative work and resources related to bookkeeping are excluded from the assessments of this study. The assessments of the administrative costs in this study are thus based on the overall assumption that all companies have all the necessary documentation completed before the preparation of the above listed documentation requirements begins. The assessments of administrative costs in this study thus solely consider the net resources needed to prepare the documentation requirements. Since the assessments of the administrative costs are based upon the assumption that the accounting statement is prepared on basis of an up-dated and reconciled bookkeeping, the administrative costs related to maintain an up-dated and recon-ciled bookkeeping, preparation of documentation hereof as well as to any internal management accounting are not included in the assessments.


The assessments of the administrative costs are based on the assumption that the typical company goes through the following steps when complying with the re-quirements: Accounting statement (article 15)

• Collect data based on reconciled books • Collect documentation for the reconciled books • Prepare and compile the statement • Prepare the documentation for the statement • Closing meeting • Approval and sign the document

The assessments of the administrative costs are based on the above listed work-flow with respect to the preparation of the document. The workflow is the same for the companies in all the categories. However, the extent and complexity increase with the size of the company and consequently, the minutes and costs show the same trend. It has further been assessed by the national experts that with respect to all com-panies the administrative work is handled in-house. The table below show the assessments made of the administrative costs for all company categories in terms of internal and external working hours per company,


and the total administrative costs for each requirement related to extraordinary dividend:

Table 40: Assessment of administrative costs: Extraordinary dividend


Total costs, €* Company category

Data require-ment Internal

time

Exter-nal

time

Total time

Internal costs

External costs

Total costs

Pop./ year*

Micro 90 - 90 29,750,200 - 29,750,200 443,160

Small 120 - 120 13,222,300 - 13,222,300 147,720

Medium 165 - 165 2,957,300 - 2,957,300 24,030

Large 210 - 210 2,425,700 - 2,425,700 15,490

Listed

Documentation requirements regarding ex-traordinary divi-dend, e.g. Ac-counting state-ment (article 15)

240 - 240 204,400 - 204,400 1,150



2.8. Capital loss (2nd Directive)

According to the 2nd Directive, all companies (from micro to listed) are required to perform the following meeting:

• In the case of a serious loss of the subscribed capital, a general meeting must be called to consider whether the company should be wound up or any other measures taken (article 17)

The national experts have discussed the process of complying with these require-ments and in continuation of this, the national experts have agreed on an assess-ment of the administrative workload in terms of internal and external working hours. The assessments of necessary administrative activities and administrative workload have been made according to all companies. The outcomes of the discus-sions are reported in the following. As mentioned in section two, the assessments of the administrative costs in this study are based upon the overall assumption that all companies comply with the national requirements related to bookkeeping. As this study focuses only on se-lected EU requirements within the Company Law Acquis, the administrative work and resources related to bookkeeping are excluded from the assessments of this study. The assessments of the administrative costs in this study are thus based on the overall assumption that all companies have all the necessary documentation completed before the preparation of the above listed documentation requirements begins. The assessments of administrative costs in this study thus solely consider the net resources needed to prepare the documentation requirements. Since the assessments of the administrative costs are based upon the assumption that the requirement is fulfilled on basis of an up-dated and reconciled bookkeep-ing, the administrative costs related to maintain an up-dated and reconciled book-keeping, preparation of documentation hereof as well as to any internal manage-ment accounting are not included in the assessments.


The assessments of the administrative costs are based on the assumption that the typical company goes through the following steps when complying with the re-quirements: In the case of a serious loss of the subscribed capital, a general meeting must be called to consider whether the company should be wound up or any other meas-ures taken (article 17)


The assessments of the administrative costs are based on the above listed work-flow with respect to the performing of the meeting. The workflow is the same for the companies in all the categories. However, the extent and complexity increase with the size of the company and consequently, the minutes and costs show the same trend. It has further been assessed by the national experts that with respect to micro, small, and medium companies the administrative work is handled by external advi-


sors. With respect to large and listed companies, it has been assessed by the na-tional experts that most of the administrative work is handled in-house. The table below show the assessments made of the administrative costs for all company categories in terms of internal and external working hours per company, and the total administrative costs for each requirement related to capital loss:

Table 41: Assessment of administrative costs: Capital loss



Data require-ment Internal

time External

time Total time

Internal costs

External costs

Total costs

Pop./ year*

Micro - 90 90 - 36,995,000 36,995,000 221,580

Small - 90 90 - 12,331,700 12,331,700 73,860

Medium - 150 150 - 2,005,900 2,005,900 7,210

Large 195 105 300 450,500 603,300 1,053,800 3,100

Listed

In the case of a serious loss of the subscribed capital, a general meeting must be called to consider whether the company should be wound up or any other meas-ures taken (arti-cle 17)

410 130 540 23,300 18,400 41,700 80



2.9. Branches (11th Directive)

According to the 11th Directive, branches covering the size from micro to large are required to prepare and publish the following document and information:

• Notification of formation of a branch of a foreign company with limited re-sponsibility

• The option for the Member States to require the translation or the certified translation of the company's documents (article 4)

The national experts have discussed the process of complying with these require-ments and in continuation of this, the national experts have agreed on an assess-ment of the administrative workload in terms of internal and external working hours. The assessments of necessary administrative activities and administrative workload have been made according to all branches. The outcomes of the discus-sions are reported in the following. The assessments of administrative costs in this study solely consider the net re-sources needed to prepare the documentation requirements. It should also be noted that any fee for national publication is not included in the assessments of the administrative costs.


The assessments of the administrative costs are based on the assumption that the typical branch goes through the following steps when complying with the require-ments: Notification of formation of a branch of a foreign company with limited responsibil-ity

• Familiarising with the IO • Collect master data regarding the branch, company and responsible per-

sons • Filling forms and tables • Copying of documents • Submit the information

The option for the Member States to require the translation or the certified transla-tion of the company's documents (article 4)

• Translate the documents • Certification of the translation • Submit the information

The assessments of the administrative costs are based on the above listed work-flow with respect to the preparation and publication of the document and informa-tion. The workflow is the same for all the branches. However, the extent and com-plexity increase with the size of the branch and consequently, the minutes and costs show the same trend. It has further been assessed by the national experts that with respect to all the branches the administrative work is handled in-house as well as by external advi-sors. The tables below show the assessments made of the administrative costs for all company categories in terms of internal and external working hours per branch, and the total administrative costs for each requirement related to branches:


Table 42: Assessment of administrative costs: Branches



Data requirement Internal

time External

time Total time

Internal costs

External costs

Total costs

Pop./ year*

Notification of for-mation of a branch of a foreign com-pany with limited responsibility

140 - 140 4,627,800 - 4,627,800 44,320

The option for the Member States to require the transla-tion or the certified translation of the company's docu-ments (article 4)

60 180 240 1,983,400 14,798,000 16,781,400 44,320

Micro

Total 200 180 380 6,611,200 14,798,000 21,409,200 44,320


140 - 140 3,085,200 - 3,085,200 29,550


60 240 300 1,322,300 13,153,800 14,476,000 29,550

Small

Total 200 240 440 4,407,500 13,153,800 17,561,200 29,550


140 - 140 752,800 - 752,800 7,210


120 300 420 645,300 4,011,700 4,656,900 7,210

Medium

Total 260 300 560 1,398,000 4,011,700 5,409,700 7,210


140 - 140 646,900 - 646,900 6,200


120 600 720 554,500 6,894,500 7,448,900 6,200

Large

Total 260 600 860 1,201,300 6,894,500 8,095,800 6,200



SECTION FOUR: Recommendations for simplification

As mentioned in the introduction section, one of the main objectives of the study is to provide recommendations and suggestions for simplification of the EU Company Law Acquis. This section reports the findings and suggestions captured during the study and especially at the final workshop with national experts, where the information obli-gations included in the study were all subject to discussions on possible recom-mendations. An important part of the approach taken in this study is that initiatives for simplifi-cation of the regulatory environment, in this case selected elements of the EU Company Law Acquis, shall be developed not only by focussing on the administra-tive costs imposed on businesses, but also on the value of the administrative work for the companies targeted by the requirements. In cases where the information prepared by businesses as a part of fulfilling a re-quirement is also relevant to internal and external stakeholders of the company, the value of this information may be high, providing a low potential for rule simpli-fication. On the other hand, in cases where information is less relevant for internal and ex-ternal stakeholders of the company, the value of this information may be consid-ered low. If a requirement is of low value to the company, the company will thus have limited incentive to prepare the information if it was not for the requirement in the legislation. In this study, a high potential for rule simplification is thus present in those cases where the regulatory requirements of the EU Company Law Acquis impose a rela-tively high level of administrative costs on businesses and have a relatively limited value for the businesses fulfilling the requirements. The discussions on rule simplification between the national experts involved in this study have focussed on two types of tools for simplifying the regulatory environ-ment: Deregulation and targeted regulation, where:

• “Deregulation” is defined by initiatives that concentrate on the removal of existing requirements from the EU Company Law Acquis, and where

• “Targeted regulation” refers to initiatives that are not related to the exist-

ing requirements as such, but to the targets of the regulations. Such initiatives are thus characterised by a change of regulatory target, for in-stance by adapting parts of the legislation that have a high administrative impact on a group of businesses, but where the value of the information is relatively low for this group of businesses. Below, the output of the discussions between the national experts is reported ac-cording to these two types of simplification-tools. As a separate element of the ini-tiatives for rule simplification, the discussions between the national experts on the usefulness of initiatives enforcing a higher usage of digital solutions is also re-ported.


1. Recommendations for deregulation

1.1. Condensed balance sheet

Regarding the condensed balance sheet, all experts agree that the value of this information is relatively low for the internal stakeholders (owners, management etc.) of and non-existent for external stakeholders, as these companies typically only have a limited number of external stakeholders. All experts thus agreed that a complete removal of the condensed balance sheet would benefit both micro and small companies, as the information provided in the condensed balance sheet is of very limited value for any stakeholders. In addition, the national experts agree that the preparation of a condensed balance sheet is no different from preparing a full annual account, as the companies in both cases need to prepare all background information, including for instance a profit and loss account. The difference between the two is thus only made of the output, making the value of the condensed balance sheet as such of very limited value for any stakeholders. The national experts thus recommend either to remove the requirement completely for micro and small companies or making it mandatory for micro and small compa-nies to prepare a full annual report. It should be noted that the alternative of hav-ing small companies establishing full annual accounts is only an option if these ac-counts do not need to be audited. Otherwise, the difference in costs compared to the condensed balance sheet would be considerable. In case of a complete removal of the requirement for micro and small companies, the national experts discussed the risk that these companies will continue to pre-pare the report for competitive reasons and for the protection of creditors. How-ever, the experts agree that a complete removal of the requirement may have a high impact on the administrative workload of these companies in the longer run, especially if fewer and fewer companies continue to prepare the report. Referring to the assessments made by the experts of the administrative costs, a complete removal of the obligation to prepare and publish a condensed balance sheet could provide a burden-reduction of 4.9 billion Euros for micro companies and 1.5 billion Euros small micro companies, i.e. a total burden-reduction of 6.4 billion euros.

1.2. Annual report

Regarding the annual report, the experts agree that the current minimum require-ments of the Directive are of high value to the companies as well as for external stakeholders. For that reason, the national experts see no possibilities for deregu-lating the current requirements to the annual report for medium, large and listed companies. For an assessment of the possibilities of introducing digital reporting of the annual report (XBRL), see the paragraph below on digital solutions.

1.3. Group account

With regard to the requirements to the group accounts, the national experts dis-cussed the possibility of raising the threshold for targeted companies. The main rationale for introducing such an initiative is that the companies in the lower end of the “medium-scale” have a low number of external stakeholders, suggesting that the value of group accounts for external stakeholders of the smaller groups is rela-tively low. By introducing the possibility to enforce the requirements only on com-panies with a significant number of stakeholder, significant reductions of the ad-


ministrative workload for companies with a low number of stakeholders may be possible. Regarding the group account, the national experts also discussed the option to re-lieve all companies from preparing group accounts unless 10% or more of the shareholders require the management to prepare the group accounts. If the infor-mation is thus of low value to the shareholders a removal of the information obli-gation will provide a significant reduction of the administrative burdens.

1.4. Capital loss, mergers/divisions, extraordinary dividends etc.

During the workshops, the national experts discussed the possibility of removing selected requirements for documentation in certain situations, such as cases of a serious loss of the subscribed capital (capital loss), cases of mergers and divisions, and payments of extraordinary dividends. The national experts raised the recommendation that such initiatives for deregulat-ing requirements for documentation could be replaced by an increase of the re-sponsibility for management. In situations where the management and/or share-holders will take responsibility for any losses that may occur due to the matter, the EU Directives could include an option for Member States to remove the “upfront” requirement for documentation. In case management and/or shareholders will not take such responsibility, the existing requirement for documentation should be maintained. In the case of mergers and divisions, it is the assessment of the national experts that the value of documentation (terms of merger in writing, written report by management, written report by independent expert and accounting statement) is low to both internal and external stakeholders of micro and small companies. The reason for this is that these companies often have a very limited number of exter-nal stakeholders and since the management of these companies often is consti-tuted by the owners themselves. For these reasons, the experts suggest to remove the “upfront” requirement for such documentation, and replace it by an increase of the responsibility for management. Similarly, the experts assess that the requirement to inform the general meeting regarding of a serious loss of the subscribed capital (capital loss), is of relatively low value to internal stakeholders, especially for micro and small companies, since these companies have a limited number of external stakeholders and since the management of these companies often is constituted by the owners. Instead, the requirement to inform the general meeting regarding of a serious loss of the sub-scribed capital (capital loss) should be replaced by an increase of the responsibility for management. For the larger companies, the experts however assess that the value of this information is high, providing a higher relevance of the requirement for these companies. Also with regard to merges and divisions, the experts discussed the possibility of removing the requirement for an independent expert to examine terms of merger. However, the experts agreed that such an initiative may impose a risk for share-holders and that the value of this information is generally high for external stake-holders. Initiatives for deregulation on this matter may thus not prove to have an impact on the level of administrative burdens imposed by the EU Company Law Acquis. In the case of payments of extraordinary dividends, the national experts stressed that a removal of the documentation requirements may impose a risk that compa-nies pay out extraordinary dividend without having equity. Such risks should thus


be included in any deregulating initiatives related to the payment of extraordinary dividend. Initiatives to deregulate such documentation requirements may thus prove to have an impact on the administrative workload of companies in these situations. How-ever, as the national experts also have pointed out, these situations do not occur very often, especially within the smaller companies. Initiatives for deregulation in these cases may thus not prove to have a high impact on the total level of admin-istrative costs imposed by the EU Company Law Acquis. With regard to capital movement, the national experts discussed the possibilities of removing the requirement of the 2nd Directive that a written report shall be pre-pared by independent expert in cases where shares are issued for a consideration other than cash. Instead, the independent report could be replaced by an increase of the responsibility for management, if the management is willing to accept per-sonally responsibility for any losses that might occur due to a wrong valuation of the consideration. If the management is not willing to accept this responsibility, the company will have to comply with the requirements. However, as the value of this information is generally high for external stakeholders, initiatives for deregula-tion on this matter may thus not prove to have an impact on the level of adminis-trative burdens imposed by the EU Company Law Acquis. In this report, no attempts are made to quantify the effects in terms of burden-reduction of the initiatives mentioned above, since no assessments of the adminis-trative costs related to any alternative options has been made.

1.5. Branches

Regarding the 11th Directive, the directive includes an option for the Member States to require a certified translation of the articles of association and formation documents (11. directive, article 4). As a translation of certain sections of these company documents may be of high value to creditors, the national experts discussed the possibility of changing the current formulation of the requirement in such a way that only certain sections of the articles of association may be subject to a mandatory certified translation. The national experts discussed the option that the mandatory translation (if opted for by the Member States) should only apply to the minimum requirements set out in the 1st Directive regarding the articles of association.

2. Recommendations for targeted regulation

As mentioned the discussions on rule simplification between the national experts also focussed on the possibilities of changing the regulatory target of certain re-quirements, for instance by adapting parts of the legislation that have a high ad-ministrative impact on a group of businesses, but where the value of the informa-tion is relatively low for this group of businesses. Below, the output of the discus-sions between the national experts on these elements is summarised. The national experts discussed the possibilities of targeting certain requirements of the 2nd Directive, the 3rd Directive and the 6th Directive at listed companies only. In particular, the national experts agreed that requirements related to capital loss (2nd Directive), extraordinary dividend (2nd Directive), capital movement (2nd Direc-tive), mergers (3rd Directive), and divisions (6th Directive), could potentially be tar-geted at listed companies only. As the information prepared by companies in these situations is generally of low value for micros, small, medium and large companies initiatives that target re-


quirements at listed companies only may provide a significant impact on the level of administrative burdens imposed on micros, small, medium and large companies. In this respect, it should be noted that listed companies may be small, medium or large and that large companies may have many external stakeholders even though they are not listed. However, in thus study all listed companies are included in the category of “listed companies”, making the remaining groups consisting of non-listed companies. The study thus makes use of a relatively simple understanding of the non-listed companies. The reason for the assessment of the relatively low value is that the smaller com-panies typically only have a limited number of external stakeholders, making the value of the information for these companies low. In the cases that such initiatives cannot be implemented, the national experts agreed that the number of share-holders could be used to target the requirements at those companies where the information is important for a large number of shareholders. An alternative option could thus be to exclude companies with a low number of shareholders from these requirements, provide a potential reduction of the administrative burdens imposed on these companies. In this report, no attempts are made to quantify the effects in terms of burden-reduction of the initiatives mentioned above, since no assessments of the adminis-trative costs related to any alternative options has been made.

3. Digital solutions

Regarding the introduction of digital reporting tools, the experts discussed the general potential for the various information obligations included in the study. However, as most requirements covered by this study are situation-specific making companies target of the regulation only in certain cases, extensive usage of digital reporting for the requirements covered by this study is not seen as a very valuable option. With regard to the recurring requirements, and especially with regard to the con-densed balance sheet and the annual report, a digital/electronic reporting can be performed by using e.g. XBRL or upload of documents through the Internet. It should also be noted that Directive 2003/58/EC has the possibility of sending an-nual accounts to the registers by electronic means. In Member States where publi-cation of the reports is effected through the register, electronic reporting is thus already possible. With regard to the implementation of XBRL-solutions that makes it possible to sub-mit data from the annual report by electronic means, the national experts agreed that the availability of such a solution might provide significant result. As a stand-alone solution, the national experts agreed that the digital reporting of data might not provide a significant burden-reduction, but the experts also agreed that such solutions might be valuable if the digital upload of information is followed by a re-use of data by other authorities, thus eliminating any subsequent reportings of the same data. The national experts thus agreed that even though the introduction of digital re-porting may not ease the administrative workload significantly, digital storage and re-use of information might increase the possibility for other areas of public ad-ministration to access and reuse this information.


ANNEX

1. Assessments of administrative costs, minutes (per company)

Admin costs, per company (minutes) Information obligation

Data requirement Micro Small Medium Large Listed

Auditors' report (4. directive, article 51) 7,560 15,060 50,120

Balance sheet (4. directive, article 2) 440 555 1,050

Due approval (4. directive, article 47) 85 85 235

Income statement (4. directive, article 2) 440 555 1,050

Management review (4. directive, article 46) 140 225 405

Notes (4. directive, article 2) 380 555 1,050

Publication (4. directive, article 47-50) 15 15 15

Statement by Management on the annual report (4. directive, article 47) 40 60 105

Annual report

Total 9,100 17,110 54,030

Notification of formation of a branch of a foreign company with limited responsibility (11. directive)

140 140 140 140

The option for the Member States to require the translation or the certified transla-tion of the company's documents (11. directive, article 4)

240 300 420 720 Branches

Total 380 440 560 860

In the case of a serious loss of the subscribed capital, a general meeting must be called to consider whether the company should be wound up or any other measures taken (2. directive, article 17)

90 90 150 300 540 Capital Loss

Total 90 90 150 300 540

An adequate system of protection of the interests of creditors of when the company is reducing its subscribed capital (2. directive, article 32)

60 60 120 240 480

Any increase in capital must be decided upon by the general meeting (2. directive, article 25)

85 85 155 295 575

Any increase in capital must be registered (published) with relevant authority (2. directive, Article 25)

50 50 50 50 50

Any reduction in the subscribed capital must be decided upon by the general meet-ing (2. directive, article 30)

85 85 155 295 575

Any reduction in the subscribed capital must be registered (published) with relevant authority (2. directive, article 30)

50 50 50 50 50

Capital move-ment

General meeting for approval of the company's acquisition of asset belonging to a person or company or firm who signed the statutes (2. directive, article 11)

85 85 155 295 575




General meeting for approval of the company's acquisition of its own shares (2. directive, article 19)

85 85 155 295 575

General meeting for approval of the decision of reduce the subscribed capital by compulsory withdrawal of shares (2. directive, article 36)

85 85 155 295 575

General meeting for approval of the decision of total or partial redemption of the subscribed capital without reduction of the latter (2. directive, article 35)

85 85 155 295 575

If shares are issued for a consideration of securities and financial instruments, cf. Art. 10a, without a written report prepared by independent expert, a statement by management shall be published (2. directive, article 27)

125 125 200 350 650

If the asset acquired comprise securities and financial instruments, cf. Art. 10a, and the acquisition takes place without a written report prepared by independent ex-pert, a statement by management shall be published (2. directive, article 11)

125 125 200 350 650

If the company, within two year after its formation, acquires any asset other than securities and financial instruments, cf. Art. 10a, belonging to a person or company or firm who signed the statutes for a consideration of no less than one-tenth of the subscribed capital, the consideration shall be the subject of a written report pre-pared by independent expert (2. directive, article 11)

255 255 510 1,020 2,040


80 80 110 170 290


80 80 110 170 290

Publication of the independent expert's written report regarding the above matter (2. directive, article 11)

50 50 50 50 50


50 50 50 50 50

Where shares are issued for a consideration other than cash, securities and finan-cial instruments, cf. Art. 10a, the consideration shall be the subject of a written report prepared by independent expert (2. directive, article 27)

255 255 510 1,020 2,040

Total 1,690 1,690 2,890 5,290 10,090

Balance sheet (4. directive, article 11) 200 230

Due approval (4. directive, article 11) 115 170

Notes (4. directive, article 11) 220 230

Publication (4. directive, article 11) 15 15

Statement by Management on the condensed balance sheet (4. directive, article 11)

50 75

Condensed bal-ance sheet

Total 600 720




Accounting statement (6. directive, article 9) 435 435 870 1,680 3,360

An adequate system of protection of the interests of creditors of the de-merging companies (6. directive, article 12)

60 60 90 180 360

Duty of information to third part regarding the de-merger (6. directive, article 16) 60 60 60 120 240

General meeting (9. directive, article 6) 70 70 85 160 1,020

Notification (publication) to relevant authority of decision for de-merger (6. direc-tive, article 4)

50 50 50 50 50

Notification to relevant authority of final decision for de-merger (6. directive, article 16)

50 50 50 50 50

Terms of de-merger in writing (6. directive, article 3) 345 345 690 1,320 2,640

Written report by independent expert (6. directive, article 8) 225 225 450 840 1,680

Written report by management (6. directive, article 7) 315 315 630 1,200 2,400

De-merger (divi-sions)

Total 1,610 1,610 2,975 5,600 11,800

Documentation requirements regarding extraordinary dividend, e.g. Accounting statement (2. directive, article 15)

90 120 165 210 240 Extraordinary Dividend

Total 90 120 165 210 240

Auditors' report (7. directive, article 37) 2,647 5,280 17,290

Balance sheet (7. Directive, article 16) 480 860 2,281

Income statement (7. Directive, article 16) 410 845 2,251

Management review (7. Directive, article 36) 300 585 1,341

Notes (7. Directive, article 16) 685 1,280 3,081

Statement by Management on the group accounts (7. Directive, article 38) 110 170 335

Group account

Total 4,632 9,020 26,579




Accounting statement (3. directive, article 11) 435 435 870 1,680 3,360

An adequate system of protection of the interests of creditors of the merging com-panies (3. directive, article 13)

60 60 90 180 360

Duty of information to third part regarding the merger (3. directive, article 18) 60 60 60 120 240

General meeting (3. directive, article 7) 70 70 85 160 1,020

Notification (publication) to relevant authority of decision for merger (3. directive, article 6)

50 50 50 50 50

Notification to relevant authority of final decision for merger (3. directive, article 18)

50 50 50 50 50

Terms of merger in writing (3. directive, article 5) 345 345 690 1,320 2,640

Written report by independent expert (3. directive, article 10) 225 225 450 840 1,680

Written report by management (3. directive, article 9) 315 315 630 1,200 2,400

Merger

Total 1,610 1,610 2,975 5,600 11,800


2. Assessments of administrative costs, administrative costs (total)

Administrative costs, total Information obligation


Auditors' report (4. directive, article 51) 3,369,800,246 4,326,277,501 707,436,641

Balance sheet (4. directive, article 2) 166,809,198 64,105,967 5,959,116

Due approval (4. directive, article 47) 15,234,120 9,818,031 1,333,707

Income statement (4. directive, article 2) 166,809,198 64,105,967 5,959,116

Management review (4. directive, article 46) 41,082,441 25,988,906 2,298,516

Notes (4. directive, article 2) 140,064,752 64,105,967 5,959,116

Publication (4. directive, article 47-50) 2,688,374 1,732,594 85,130

Statement by Management on the annual report (4. directive, article 47)

15,164,473 6,930,375 595,912

Annual report

Total 3,917,652,801 4,563,065,308 729,627,255

Notification of formation of a branch of a foreign company with limited responsibility (11. directive)

4,627,796 3,085,197 752,745 646,835

The option for the Member States to require the translation or the certified translation of the company's documents (11. directive, article 4)

16,781,325 14,475,991 4,656,877 7,448,896 Branches

Total 21,409,121 17,561,188 5,409,621 8,095,731

In the case of a serious loss of the subscribed capital, a general meet-ing must be called to consider whether the company should be wound up or any other measures taken (2. directive, article 17)

36,994,960 12,331,653 2,005,833 1,053,740 41,618 Capital Loss

Total 36,994,960 12,331,653 2,005,833 1,053,740 41,618

An adequate system of protection of the interests of creditors of when the company is reducing its subscribed capital (2. directive, article 32)

24,663,307 8,221,102 2,674,445 3,447,233 677,513

Any increase in capital must be decided upon by the general meeting (2. directive, article 25)

34,939,685 11,646,562 3,454,491 2,519,592 495,123

Any increase in capital must be registered (published) with relevant authority (2. directive, Article 25)

20,552,756 6,850,919 1,114,352 718,174 70,574

Any reduction in the subscribed capital must be decided upon by the general meeting (2. directive, article 30)

34,939,685 11,646,562 3,454,491 2,476,651 474,024

Any reduction in the subscribed capital must be registered (published) with relevant authority (2. directive, article 30)

20,552,756 6,850,919 1,114,352 718,174 70,574

Capital move-ment

General meeting for approval of the company's acquisition of asset belonging to a person or company or firm who signed the statutes (2. directive, article 11)

34,939,685 11,646,562 3,454,491 2,476,651 474,024




General meeting for approval of the company's acquisition of its own shares (2. directive, article 19)

34,939,685 11,646,562 3,454,491 2,476,651 474,024

General meeting for approval of the decision of reduce the subscribed capital by compulsory withdrawal of shares (2. directive, article 36)

34,939,685 11,646,562 3,454,491 2,476,651 474,024

General meeting for approval of the decision of total or partial re-demption of the subscribed capital without reduction of the latter (2. directive, article 35)

34,939,685 11,646,562 3,454,491 2,476,651 474,024

If shares are issued for a consideration of securities and financial in-struments, cf. Art. 10a, without a written report prepared by inde-pendent expert, a statement by management shall be published (2. directive, article 27)

51,381,889 17,127,296 4,457,408 2,880,175 512,369

If the asset acquired comprise securities and financial instruments, cf. Art. 10a, and the acquisition takes place without a written report pre-pared by independent expert, a statement by management shall be published (2. directive, article 11)

51,381,889 17,127,296 4,457,408 5,027,215 917,466

If the company, within two year after its formation, acquires any asset other than securities and financial instruments, cf. Art. 10a, belonging to a person or company or firm who signed the statutes for a consid-eration of no less than one-tenth of the subscribed capital, the consid-eration shall be the subject of a written report prepared by independ-ent expert (2. directive, article 11)

104,819,055 34,939,685 11,366,390 10,270,780 2,018,601


32,884,409 10,961,470 2,451,574 1,926,501 308,057


32,884,409 10,961,470 2,451,574 2,012,382 308,057


20,552,756 6,850,919 1,114,352 718,174 70,574


20,552,756 6,850,919 1,114,352 718,174 70,574

Where shares are issued for a consideration other than cash, securi-ties and financial instruments, cf. Art. 10a, the consideration shall be the subject of a written report prepared by independent expert (2. directive, article 27)

104,819,055 34,939,685 11,366,390 10,270,780 2,018,601

Total 694,683,146 231,561,049 64,409,542 53,610,609 9,908,203

Balance sheet (4. directive, article 11) 1,644,220,463 499,203,602

Due approval (4. directive, article 11) 945,426,766 187,315,533

Notes (4. directive, article 11) 1,808,642,509 630,284,511


Publication (4. directive, article 11) 123,316,535 16,527,841




Statement by Management on the condensed balance sheet (4. direc-tive, article 11)

411,055,116 144,902,637

Total 4,932,661,389 1,478,234,124

Accounting statement (6. directive, article 9) 100,649,414 33,549,805 10,674,377 6,216,989 297,030

An adequate system of protection of the interests of creditors of the de-merging companies (6. directive, article 12)

14,797,984 4,932,661 1,203,500 1,034,170 50,813

Duty of information to third part regarding the de-merger (6. direc-tive, article 16)

5,950,023 1,983,341 322,605 277,215 13,621

General meeting (9. directive, article 6) 17,264,315 5,754,772 1,136,639 472,678 60,420

Notification (publication) to relevant authority of decision for de-merger (6. directive, article 4)

12,331,653 4,110,551 668,611 287,269 7,057

Notification to relevant authority of final decision for de-merger (6. directive, article 16)

12,331,653 4,110,551 668,611 287,269 7,057

Terms of de-merger in writing (6. directive, article 3) 69,604,477 23,201,492 5,628,870 4,286,060 224,097

Written report by independent expert (6. directive, article 8) 51,068,460 17,022,820 5,537,772 4,413,895 216,875

Written report by management (6. directive, article 7) 66,629,465 22,209,822 5,306,265 3,802,729 203,724


Total 350,627,445 116,875,815 31,147,251 21,078,274 1,080,695

Documentation requirements regarding extraordinary dividend, e.g. Accounting statement (2. directive, article 15)

29,750,114 13,222,273 2,957,211 2,425,631 204,313 Extraordinary Dividend

Total 29,750,114 13,222,273 2,957,211 2,425,631 204,313

Auditors' report (7. directive, article 37) 294,968,957 1,109,245,989 226,311,489

Balance sheet (7. Directive, article 16) 40,829,391 74,501,529 12,298,197

Income statement (7. Directive, article 16) 32,362,637 73,202,084 12,136,450

Management review (7. Directive, article 36) 20,104,766 50,678,366 7,230,111

Notes (7. Directive, article 16) 48,348,944 110,885,997 16,611,462

Statement by Management on the group accounts (7. Directive, article 38)

6,594,410 14,727,046 1,806,180

Group account

Total 443,209,105 1,433,241,011 76,393,888




Accounting statement (3. directive, article 11) 34,287,135 11,429,045 3,558,126 1,554,247 74,257

An adequate system of protection of the interests of creditors of the merging companies (3. directive, article 13)

4,932,661 1,644,220 401,167 258,542 12,703

Duty of information to third part regarding the merger (3. directive, article 18)

1,983,341 661,114 107,535 69,304 3,405

General meeting (3. directive, article 7) 5,754,772 1,918,257 378,880 118,169 15,738

Notification (publication) to relevant authority of decision for merger (3. directive, article 6)

4,110,551 1,370,184 222,870 71,817 1,764

Notification to relevant authority of final decision for merger (3. direc-tive, article 18)

4,110,551 1,370,184 222,870 71,817 1,764

Terms of merger in writing (3. directive, article 5) 23,201,492 7,733,831 1,876,290 1,071,515 56,024

Written report by independent expert (3. directive, article 10) 17,022,820 5,674,273 1,845,924 1,103,474 54,219

Written report by management (3. directive, article 9) 22,209,822 7,403,274 1,608,846 950,682 50,931

Merger

Total 117,613,145 39,204,382 10,222,507 5,269,569 270,807


3. Assessments of administrative costs, minutes by activity (per company)

Admin costs, per company (minutes)

Micro Small Medium Large Listed Information obligation

Data requirement Activity Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time


Holding meetings 60 60 120

Inspecting and checking 7,500 15,000 50,000

Producing new data Retrieving relevant informa-tion


Auditors' report (4. directive, article 51)

Total 7,560 15,060 50,120

Adjusting existing data 30 45 90

Holding meetings 10 40 60 60


Producing new data 260 300 600 Retrieving relevant informa-tion

100 150 300


Balance sheet (4. directive, article 2)

Total 110 330 555 1,050





15 15 15

Submitting the information 10 10 10

Annual report

Due approval (4. directive, article 47)

Total 85 85 235





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time





100 150 300


Income statement (4. directive, article 2)

Total 110 330 555 1,050





30 45 90


Management review (4. directive, article 46)

Total 80 60 225 405





100 150 300


Notes (4. directive, article 2)

Total 110 270 555 1,050


Holding meetings



Submitting the information 15 15 15

Publication (4. direc-tive, article 47-50)

Total 15 15 15





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time





15 22 45


Statement by Man-agement on the an-nual re-port (4. di-rective, article 47)

Total 10 30 60 105

Annual report total 520 8,580 2,050 15,060 3,910 50,120


Copying 10 10 10 10 Familiarising with the informa-tion obligation

30 30 30 30

Filling forms and tables 30 30 30 30



60 60 60 60

Submitting the information 10 10 10 10

Notification of forma-tion of a branch of a foreign company with limited responsibility (11. directive)

Total 140 140 140 140

Adjusting existing data 60 120 60 180 120 180 120 480

Copying Familiarising with the informa-tion obligation


Inspecting and checking 60 60 120 120



Branches

The option for the Member States to require the transla-tion or the certified translation of the company's docu-ments (11. directive, article 4)

Total 60 180 60 240 120 300 120 600

Branches total 200 180 200 240 260 300 260 600





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time

Holding meetings 30 30 60 15 105 110 130

Producing new data 30 30 60 120 240

Submitting the information 30 30 30 60 60

Capital Loss

In the case of a seri-ous loss of the sub-scribed capital, a general meeting must be called to consider whether the company should be wound up or any other measures taken (2. directive, article 17)

Total 90 90 150 195 105 410 130

Capital Loss total 90 90 150 195 105 410 130

Copying


Holding meetings

Producing new data 60 60 120 240 480 Retrieving relevant informa-tion


An adequate system of protection of the interests of creditors of when the company is reducing its sub-scribed capital (2. directive, article 32)

Total 60 60 120 240 480

Copying



Producing new data 30 30 60 120 120 120 Retrieving relevant informa-tion

10 10 20 40 80


Any increase in capi-tal must be decided upon by the general meeting (2. directive, article 25)

Total 85 85 155 200 95 375 200

Copying 10 10 10 10 10

Filling forms and tables 30 30 30 30 30

Holding meetings

Producing new data

Capital move-ment

Any increase in capi-tal must be regis-tered (published) with relevant author-ity (2. directive, Arti-cle 25) Retrieving relevant informa-

tion





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time


Total 50 50 50 50 50

Copying


Holding meetings 30 30 60 90 30 240

Producing new data 30 30 60 60 60 65 175 Retrieving relevant informa-tion

10 10 20 40 80


Any reduction in the subscribed capital must be decided upon by the general meeting (2. directive, article 30)

Total 85 85 155 205 90 400 175

Copying 10 10 10 10 10


Holding meetings



Any reduction in the subscribed capital must be registered (published) with rele-vant authority (2. directive, article 30)

Total 50 50 50 50 50

Copying




10 10 20 40 80


General meeting for approval of the com-pany's acquisition of asset belonging to a person or company or firm who signed the statutes (2. di-rective, article 11)

Total 85 85 155 205 90 400 175

Copying



Producing new data 30 30 60 60 60 65 175

General meeting for approval of the com-pany's acquisition of its own shares (2. directive, article 19)

Retrieving relevant informa-tion

10 10 20 40 80





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time


Total 85 85 155 205 90 400 175

Copying




10 10 20 40 80


General meeting for approval of the deci-sion of reduce the subscribed capital by compulsory with-drawal of shares (2. directive, article 36)

Total 85 85 155 205 90 400 175

Copying




10 10 20 40 80


General meeting for approval of the deci-sion of total or partial redemption of the subscribed capital without reduction of the latter (2. direc-tive, article 35)

Total 85 85 155 205 90 400 175

Copying 10 10 10 10 10


Holding meetings 15 15 30 60 120


30 30 60 120 240


If shares are issued for a consideration of securities and finan-cial instruments, cf. Art. 10a, without a written report pre-pared by independent expert, a statement by management shall be published (2. di-rective, article 27)

Total 125 125 200 250 100 480 170

Copying 10 10 10 10 10



If the asset acquired comprise securities and financial instru-ments, cf. Art. 10a, and the acquisition Producing new data 30 30 60 120 240





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time Retrieving relevant informa-tion

30 30 60 120 240


takes place without a written report pre-pared by independent expert, a statement by management shall be published (2. di-rective, article 11)

Total 125 125 200 350 650

Copying




75 75 150 150 150 300 300


If the company, within two year after its formation, ac-quires any asset other than securities and financial instru-ments, cf. Art. 10a, belonging to a person or company or firm who signed the stat-utes for a considera-tion of no less than one-tenth of the sub-scribed capital, the consideration shall be the subject of a writ-ten report prepared by independent ex-pert (2. directive, article 11)

Total 255 255 510 510 510 1,020 1,020

Copying 10 10 10 10 10


Holding meetings



Publication of a new set of Articles of As-sociation in connec-tion with the increase in capital (1. direc-tive, article 2)

Total 80 80 110 60 110 120 170

Copying 10 10 10 10 10 Publication of a new set of Articles of As-






time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time

Holding meetings



sociation in connec-tion with the reduc-tion in the subscribed capital (1. directive, article 2)

Total 80 80 110 50 120 120 170

Copying 10 10 10 10 10


Holding meetings



Publication of the independent expert's written report re-garding the above matter (2. directive, article 11)

Total 50 50 50 50 50

Copying 10 10 10 10 10


Holding meetings



Publication of the independent expert's written report re-garding the above matter (2. directive, article 27)

Total 50 50 50 50 50

Copying


Holding meetings 30

Producing new data 150 Retrieving relevant informa-tion

75


Where shares are issued for a consid-eration other than cash, securities and financial instruments, cf. Art. 10a, the con-sideration shall be the subject of a writ-ten report prepared by independent ex-pert (2. directive, article 27)

Total 255

Where shares are Copying





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time




75 150 150 150 300 300


issued for a consid-eration other than cash, securities and financial instruments, cf. Art. 10a, the con-sideration shall be the subject of a writ-ten report prepared by independent ex-pert (2. directive, article 27)

Total 255 510 510 510 1,020 1,020

Capital movement total 1,690 1,690 2,890 2,605 2,685 5,135 4,955

Adjusting existing data 10 20

Holding meetings 25 40

Producing new data 150 150 Retrieving relevant informa-tion

15 20


Balance sheet (4. directive, article 11)

Total 200 80 150




10 15

Submitting the information 15 20

Due approval (4. directive, article 11)

Total 115 170

Adjusting existing data 15 15



30 30


Notes (4. directive, article 11)

Total 220 230


Publication (4. direc- Adjusting existing data





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time

Holding meetings


Submitting the information 15 15

tive, article 11)

Total 15 15




10 15


Statement by Man-agement on the con-densed balance sheet (4. directive, article 11)

Total 50 37 38

Condensed balance sheet total 600 302 418

Adjusting existing data 15 15 30 60 120

Copying



Inspecting and checking 120 120 240 480 960

Producing new data 210 210 420 640 200 1,380 300 Retrieving relevant informa-tion

45 45 90 180 360


Accounting statement (6. directive, article 9)

Total 45 390 45 390 120 750 1,000 680 2,100 1,260


Copying


Holding meetings


Producing new data 15 15 30 60 120


An adequate system of protection of the interests of creditors of the demerging companies (6. direc-tive, article 12)

Retrieving relevant informa-tion





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time


Total 60 60 90 180 360


Copying


Holding meetings




Duty of information to third part regard-ing the demerger (6. directive, article 16)

Total 60 60 60 120 240


Copying






General meeting (9. directive, article 6)

Total 70 70 85 130 30 990 30


Copying 10 10 10 10 10


Holding meetings



Notification (publica-tion) to relevant au-thority of decision for de-merger (6. direc-tive, article 4)






time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time

Total 50 50 50 50 50


Copying 10 10 10 10 10


Holding meetings




Notification to rele-vant authority of final decision for demerger (6. directive, article 16)

Total 50 50 50 50 50


Copying




Producing new data 180 180 120 240 360 360 560 880 Retrieving relevant informa-tion

90 90 180 360 720


Terms of de-merger in writing (6. direc-tive, article 3)

Total 105 240 105 240 450 240 960 360 1,760 880


Copying





30 30 60 120 240


Written report by independent expert (6. directive, article 8)

Total 30 195 30 195 60 390 120 720 240 1,440





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time


Copying





60 60 120 240 480


Written report by management (6. di-rective, article 7)

Total 75 240 75 240 390 240 900 300 1,600 800

De-merger (divisions) total 315 1,295 315 1,295 1,080 1,895 3,230 2,370 6,930 4,870



30 30 30 30 30 Extraordinary Dividend

Documentation re-quirements regarding extraordinary divi-dend, e.g. Accounting statement (2. direc-tive, article 15) Total 90 120 165 210 240

Extraordinary Dividend total 90 120 165 210 240

Adjusting existing data Designing information mate-rial

30 60 190

Filling forms and tables 5 15 40


Inspecting and checking 2,500 5,000 16,500


10 20 60

Submitting the information 12 25 60 Training members and em-ployees

30 100 320

Group account

Auditors' report (7. directive, article 37)

Total 2,647 220 5,060 690 16,600





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time

Adjusting existing data 25 5 45 90 Designing information mate-rial

55 25 60 190




Producing new data 30 145 370 970 Retrieving relevant informa-tion

20 70 180 495


25 5 100 320

Balance sheet (7. Directive, article 16)

Total 190 290 860 2,281

Adjusting existing data 30 45 90 Designing information mate-rial

20 10 60 190




Producing new data 55 120 355 940 Retrieving relevant informa-tion

25 65 180 495


20 10 100 320

Income statement (7. Directive, article 16)

Total 200 210 845 2,251


20 60 190




Management review (7. Directive, article 36)

Producing new data 55 100 250 540





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time Retrieving relevant informa-tion

25 50 107


20 90 250

Total 200 100 585 1,341


30 60 190




Producing new data 150 265 730 1,675 Retrieving relevant informa-tion

125 240 600


30 100 320

Notes (7. Directive, article 16)

Total 420 265 1,280 3,081

Adjusting existing data Designing information mate-rial

10 20 50





40 60 120


10 30 80

Statement by Man-agement on the group accounts (7. Directive, article 38)

Total 85 25 170 335

Group account total 1,095 3,537 3,960 5,060 9,979 16,600

Merger Accounting statement Adjusting existing data 15 15 30 60 120





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time

Copying




Producing new data 210 210 420 790 50 1,380 300 Retrieving relevant informa-tion

30 15 30 15 90 180 360


(3. directive, article 11)

Total 30 405 30 405 120 750 1,000 680 2,100 1,260


Copying


Holding meetings




An adequate system of protection of the interests of creditors of the merging com-panies (3. directive, article 13)

Total 60 60 90 180 360


Copying


Holding meetings




Duty of information to third part regard-ing the merger (3. directive, article 18)

Total 60 60 60 120 240

Adjusting existing data General meeting (3. directive, article 7)

Copying





time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time






Total 70 70 85 130 30 960 60


Copying 10 10 10 10 10


Holding meetings




Notification (publica-tion) to relevant au-thority of decision for merger (3. directive, article 6)

Total 50 50 50 50 50


Copying 10 10 10 10 10


Holding meetings




Notification to rele-vant authority of final decision for merger (3. directive, article 18)

Total 50 50 50 50 50


Copying

Terms of merger in writing (3. directive, article 5)






time External

time Internal

time External

time Internal

time External

time Internal

time External

time Internal

time External

time




60 30 90 180 360 720


Total 105 240 105 240 450 240 960 360 1,760 880


Copying





30 30 60 120 240


Written report by independent expert (3. directive, article 10)

Total 30 195 30 195 60 390 120 720 240 1,440


Copying





60 60 120 240 480


Written report by management (3. di-rective, article 9)

Total 75 240 75 240 450 180 900 300 1,600 800

Merger total 300 1,310 300 1,310 1,140 1,835 3,230 2,370 6,900 4,900


4. Assessments of value

Information obligation*

Data requirement* Micro Small Medium Large Listed

Auditors' report High High High

Balance sheet High High High

Income statement High High High

Management's review High High High

Notes High High High

Statement by Management on the annual report Medium High High

Annual report

Statement of changes in equity High High High

Notification of formation of a branch of a foreign company with limited responsibility

Low Low Low Low Branches

Notification of formation of a branch of a foreign public lim-ited company or private limited company

Low Low Low Low

Duty to inform the general meeting regarding capital loss Low Low Low Low Low Capital loss

Perform the general meeting Low Low Low Low Low

Documentation requirement regarding content of Articles of Association - convertible and dividend distributing loan (in-strument of debt)

Low Low Low Low Low

Documentation requirement regarding content of Articles of Association - decrease of share capital

Low Low Low Low Low

Documentation requirement regarding content of Articles of Association - increase of share capital

Low Low Low Low Low

Perform the general meeting Low Low Low Low Low

Registration with relevant authority Low Low Low Low Low

Capital move-ment

Where shares are issued for a consideration other than cash, the consideration shall be the subject of a written report pre-pared by independent expert

Low Medium Medium Medium Medium




Auditors' report Low for internal / none for external

Low for internal / none for external

Balance sheet Low for internal / none for external


Income statement Low for internal / none for external


Management's review Low for internal / none for external


Notes Low for internal / none for external


Statement by Management on the annual report Low for internal / none for external



Statement of changes in equity Low for internal / none for external


Certification of documents by the notary Low Low Low Low Low

Documentation requirements for de-merger, e.g. Terms of merger in writing, Written report by management, Written report by independent expert and Accounting statement

Low Low Medium Medium Medium

Duty of information to third part regarding the de-merger Low Low Medium Medium Medium

Notification (publication) to relevant authority of decision for de-merger



Notification to relevant authority of final decision for de-merger

Low Low Low Low Low

Documentation of authorisation to distribute extraordinary dividend

Medium Medium Medium Medium Medium Extraordinary dividend Documentation requirements regarding extraordinary divi-

dend, e.g. Accounting statement Medium Medium Medium Medium Medium

Auditors' report High High High

Balance sheet High High High

Income statement High High High

Management's review High High High

Notes High High High

Statement by Management on the annual report Medium High High

Group accounts

Statement of changes in equity High High High




Certification of documents by the notary Low Low Low Low Low

Documentation requirements for merger, e.g. Terms of merger in writing, Written report by management, Written report by independent expert and Accounting statement


Duty of information to third part regarding the merger Low Low Medium Medium Medium

Notification (publication) to relevant authority of decision for merger


Merger

Notification to relevant authority of final decision for merger Low Low Low Low Low

* The assessments of value wad not made according to the final list of information obligations and data requirements. For that reason the list of information obligations and data requirements included in this annex do not match the final list of requirements

Study on administrative costs of the EU Company Law...

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