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PES President welcomes EMPL Committee’s rejection of the SUP directive

Yesterday 23 June, in an opinion report, the Employment and social affairs committee (EMPL) of the European Parliament called for the rejection of the Commission proposal for a Directive on Single-member private limited liability companies (SUP – Societas Unius Personae).

This proposal was expected to facilitate the set-up of companies, in particular Small and Medium sized Enterprises (SMEs), and the development of their activities across Member States borders. It has nevertheless raised strong concerns as several of its main provisions would further facilitate social legislation and tax avoidance and would fail to guarantee the protection of workers’ and consumers’ rights.

Welcoming the Parliament’s committee decision to reject the proposed SUP directive, PES President Sergei Stanishev stated: “We support SMEs and consider that they can strongly contribute to more growth and job creation in Europe.  Nevertheless, with SUP, the devil is in the details and our engagement for the protection of workers’ rights, to end social dumping and to fight tax competition made it impossible to support the proposal. Too many of its provisions are ill-fitted and would only open new channels for unscrupulous company-founder to establish letter-box companies, to choose the country with weakest social legislation and lowest taxation to establish a company irrelevant of where its activities actually take place, to use bogus self-employment or even to escape all kinds of responsibilities towards employees, clients and creditors.”

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