EEIG formation under Articles 3 to 5: members from different EU Member States, the ancillary purpose and mandatory contract details.
A European Economic Interest Grouping can organise support for the independent activities of people or businesses from Austria and another EU Member State. Article 3 of the EEIG Regulation requires a purpose that facilitates or develops the economic activity of the members and remains ancillary to that activity.
The members come first when an EEIG is being formed. Article 4 distinguishes between companies and other legal entities and natural persons. For two natural persons, their principal activities must be carried out in different Member States. The formation contract must also contain the minimum particulars listed in Article 5.
This article explains the formation requirements and contract content under Articles 3 to 5 of Regulation (EEC) No 2137/85. Questions of personal liability, tax treatment of profit allocation and the European Cooperative Society are outside this article.
Start by identifying the people or entities and then check the cross-border connection. The final question is whether the EEIG will provide connected ancillary support rather than pursue an independent main business.
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Article 3(1) of the EEIG Regulation describes the grouping as a means of supporting the economic activity of its members. It is intended to facilitate or develop that activity and to improve or increase its results. The grouping itself must not have the purpose of making a profit for itself.
The EEIG's activity must be connected with the economic activity of its members and may only be ancillary to it. For Austrian and foreign self-employed professionals, shared infrastructure, organisation or support can fit this purpose. The EEIG does not replace the members' own professional or commercial activities.
Article 3(2) adds further boundaries. The EEIG may not exercise direct or indirect management or control over the activities of its members or another undertaking. It may not hold shares in a member undertaking. Shares in another undertaking are permitted only where necessary to achieve the grouping's aim and held for the account of its members. Article 3(2)(d) also restricts using the EEIG for certain loans or transfers of assets between a company and its director or a connected person where the law of the Member State subjects them to restrictions or control. The EEIG may also employ no more than five hundred employees and may not itself be a member of another EEIG.
Article 4(1)(a) of the EEIG Regulation covers companies within the meaning of Article 58(2) of the former Treaty and other public or private legal entities. They must have been formed under the law of a Member State and have their registered or statutory office and central administration in the Community. Where national law does not require such an office, having the central administration in the Community is sufficient.
Natural persons may also become members if they carry on an industrial, commercial, craft, agricultural or professional activity in the Community or provide other services there. Self-employed people from Austria and another EU Member State can therefore fall within this category if their actual principal activities can be assigned accordingly.
A label in a draft is not enough for the classification. For companies, the formation law, office and central administration should be recorded. For natural persons, the activity and its actual centre should be checked. These details also form the basis for the cross-border composition under Article 4(2).
Article 4(2) of the EEIG Regulation requires a cross-border membership structure. For two companies or other legal entities, their central administrations must be in different Member States. For two natural persons, their principal activities must be carried out in different Member States.
A mixed formation is also provided for. It may consist of a company or other legal entity and a natural person where the entity's central administration is in one Member State and the person's principal activity is in another. This can cover cooperation between an Austrian company and a self-employed person in another EU State, provided the other requirements are met.
The cross-border connection must be verifiable from the members' actual data at the time of formation. An international customer base, a planned foreign activity or a foreign correspondence address does not replace the connecting factors listed in Article 4(2).
Article 5 of the EEIG Regulation requires at least five particulars in the formation contract. First, the grouping's name must be followed or preceded by the words European Economic Interest Grouping or the abbreviation EEIG, unless that wording is already included in the name.
Second, the contract must state the grouping's registered office. Third, it must describe the object for which the EEIG is formed. This description should make the connection with the members' activities and the supporting character of the EEIG understandable.
Fourth, the contract must state for every member the name or business name, legal form, residence or registered office and, where applicable, the number and place of registration. Fifth, it must state the duration if the grouping is not formed for an indefinite period. The particulars must match the evidence supporting the members' status.
A workable purpose clause connects the planned support with the members' specific activities. It should show what shared service will be organised, which members benefit from it and how it facilitates or develops their economic activity. A general reference to international cooperation remains too vague for that purpose.
The stated object and the actual operation must match. If the EEIG is intended to coordinate shared processes or support services, the contract should not turn that function into general management power over the members. The members' own activities remain separate from the EEIG's activity.
The two legal forms mentioned in the membership rules are not examined in detail here. For Austrian company agreement questions involving capital measures, see the articles on authorised capital in a FlexCo and the FlexCo share contribution. They do not replace a review of the EEIG formation contract.
Before signing, the parties should collect the identity and legal form of each member, its office or residence, central administration or principal activity and any registration details. For natural persons, the preliminary review should also contain a clear description of the activity carried on.
The parties also need a clear description of the joint project. The planned ancillary services, their connection with the members' economic activities, the EEIG's official address and the intended duration should fit together. The documents should show that the EEIG is not intended to replace the members' own operational activities.
The review under Articles 3 to 5 therefore combines a membership check, a cross-border check and a contract review. If the members, address, object or duration change during preparation, the draft and the supporting documents should be updated together.
Article 4(1)(b) and Article 4(2)(b) of the EEIG Regulation provide for natural persons as members where they carry on a covered activity and their principal activities are in different Member States. The specific activity and location data must be checked.
No. Under Article 3(1) of the EEIG Regulation, the grouping facilitates or develops the members' activity and improves or increases its results. It does not have the purpose of making a profit for itself.
No. Article 3(2)(a) excludes direct or indirect management or control over the activities of the members or another undertaking.
Article 5 of the EEIG Regulation lists the name, official address, object, particulars of every member and the duration where the grouping is not formed for an indefinite period.
An international customer base alone does not replace the connecting factors in Article 4(2) of the EEIG Regulation. For companies, the relevant factor is the central administration and for natural persons it is the principal activity in different Member States.
Before preparing the first draft, the parties should answer three questions in writing: who will become a member, where is each central administration or principal activity located and what ancillary service will the EEIG organise for those activities? The Article 5 particulars can then be compared with the actual member data.
For a specific review, you can assemble the draft formation contract, member details on office and activity, registration extracts or comparable evidence, a description of the joint project and the intended duration. We check whether the membership, cross-border connection, ancillary purpose and mandatory particulars fit together.
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