PART 1GENERAL

Citation and commencement

1.-(1) These Regulations may be cited as the European Grouping of Territorial Cooperation Regulations 2015.

(2) These Regulations come into force on 31st July 2015.

Interpretation

2.-(1) In these Regulations-

"the 2006 Act" means the Companies Act 2006(3);

"the 1986 Act" means the Insolvency Act 1986(4);

"the 1989 Order" means the Insolvency (Northern Ireland) Order 1989(5);

"the EU Regulation" means Regulation (EC) No 1082/2006 of the European Parliament and of the Council (6) as amended by Regulation (EU) 1302/2013 of the European Parliament and of the Council (7);

"EGTC" means a European grouping of territorial cooperation formed under the EC Regulation;

"the Insolvency Rules" means-

• in the case of a UK EGTC with its registered office in England and Wales, the Insolvency Rules 1986(8);

• in the case of a UK ECTG with its registered office in Scotland, the Insolvency (Scotland) Rules 1986(9);

• in the case of a UK EGTC with its registered office in Northern Ireland, the Insolvency Rules (Northern Ireland) 1991(10); and

"UK EGTC" means an EGTC which has a registered office in the United Kingdom.

(2) In any provision of an enactment applied to a UK EGTC by virtue of these Regulations-

"articles" means the statutes and convention of a UK EGTC;

"board of directors" means the assembly of a UK EGTC, and all the directors of a UK EGTC if more than one, and if only one, the director of a UK EGTC;

"company" means a UK EGTC;

"director" or "past director" of a company means, as appropriate, a director or a former director of a UK EGTC, a member or former member of the assembly of a UK EGTC, or any other person who has or has had control of the management of a UK EGTC's business;

"officer" means a director or a member of the assembly of a UK EGTC, or a member of any other organ of the UK EGTC provided for in its statutes or convention;

"registered office" means the office specified in the convention of an EGTC to be its registered office; and

"ordinary resolution", "written resolution" and "general meeting" mean the procedures of a UK EGTC set out in its statutes and convention which most closely correspond to those things as provided for in the 2006 Act.

(3) Any other expressions used in these Regulations that are defined in the 2006 Act, or in relation to insolvency, by the 1986 Act or the 1989 Order have the meaning assigned to them by those provisions.

PART 2PROVISIONS RELATING TO THE ESTABLISHMENT OF AN EGTC

Establishment of an EGTC and eligibility to participate in the activities of an EGTC (Article 4(3) of the EU Regulation)

3.-(1) Any entity falling within one of the categories set out in article 3(1) of the EU Regulation which by virtue of any enactment is restricted in its ability to be a member of a company will be restricted to the same extent in its ability to be a member of an EGTC.

(2) Any entity that falls within one of the categories set out in article 3(1) of the EU Regulation and, which has its registered office in the UK must not engage in the activities of an EGTC until its membership of that EGTC has been approved by the Secretary of State in writing.

Acquisition of legal personality (Article 5(1) of the EU Regulation)

4.-(1) For the purposes of article 5(1) of the EU Regulation the statutes referred to in article 9 of the EU Regulation, the convention, and any subsequent amendments to the statutes or to the convention must be published-

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

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

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

Competent Authority (Articles 4(4) and 13(1) of the EU Regulation)

5.-(1) The Secretary of State is the competent authority for the purpose of receiving notifications and documents under article 4(2) and 4(6) of the EU Regulation.

(2) The Secretary of State is the competent body under article 13 of the EU Regulation for the purpose of prohibiting any activity carried on by an EGTC in the United Kingdom which contravenes-

(a)any enactment or rule of law providing for public policy, public security, public health or public morality, or

(b)the public interest of the United Kingdom.

Proceedings in relation to the winding-up of a UK EGTC (Article 14(1) of the EU Regulation)

6.-(1) The High Court is the competent court for the purpose of ordering the winding-up of a UK EGTC which has its registered office in England and Wales or in Northern Ireland.

(2) The Court of Session will be the competent court for the purposes of ordering the winding-up of a UK EGTC which has its registered office in Scotland.

Budget (Article 11 of the EU Regulation)

7.-(1) The following provisions in the 2006 Act will apply to a UK EGTC as if it were a company entitled to prepare accounts in accordance with the small companies regime-

(a)Chapter 2 of Part 15 (accounting records);

(b)section 390 (financial year);

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

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

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

(f)section 464(2) (accounting standards);

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

(h)section 471 (meaning of "annual accounts" and related expressions);

(i)section 472 (notes to accounts);

(j)section 475 (requirement for audited accounts), except-

(i)the words "section 477(small companies), or" in subsection (1)(a);

(ii)subsection (1)(b);

(k)section 476 (right of members to require audit);

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

(m)sections 495 and 496 (auditor's report);

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

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

(p)section 505 (names to be stated in published copies of the auditor's report), except-

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

(ii)subsection (1)(b).

(2) A UK EGTC must-

(a)ensure that its latest accounts are available for inspection at its registered office by any person, without charge and during business hours;

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

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

(4) The auditor of a UK EGTC must be a person who-

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

(b)if the appointment is an appointment as a statutory auditor, would not be prohibited from acting by section 1214 of the 2006 Act (independence requirement).

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

8.-(1) A UK EGTC will be wound-up as an unregistered company-

(a)if its registered office is in England and Wales or in Scotland, under Part 5 of the 1986 Act; or

(b)if its registered office is in Northern Ireland, under Part 6 of the 1989 Order.

(2) The provisions of the 1986 Act or the 1989 Order and the Insolvency Rules apply to a UK EGTC that is being wound up in accordance with paragraph (1), with the modifications set out in Parts 2 and 3 of the Schedule to The European Grouping of Territorial Cooperation Regulations 2007(11).

PART 3EXERCISE OF MEMBER STATE OPTIONS UNDER THE EU REGULATION

Prohibition on members with limited liability (Article 12(2) of the EU Regulation)

9.  A UK EGTC must not include a member which has limited liability.

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

Application of the Company Directors Disqualification Act 1986

10.  Where a UK EGTC is wound-up under regulation 9(1)(a) or 9(1)(b) of these regulations, the Company Directors Disqualification Act 1986(12) or the Company Directors Disqualification (Northern Ireland) Order 2002(13), as appropriate, applies to the UK EGTC and does so as if the EGTC were a company as defined by section 22(2)(b) of that Act or by article 2(2) of that Order

Penalties

11.  Where an enactment referred to in regulation 7, 8 or 10 provides a penalty for an offence which would, but for this regulation, exceed the limit in paragraph 1(1)(d) of Schedule 2 of the European Communities Act 1972(14), the limit in that paragraph applies to that penalty.

Review

12.-(1) The Secretary of State must from time to time-

(a)carry out a review of these Regulations;

(b)set out the conclusions of the review in a report, and

(c)publish the report.

(2) In carrying out the review the Secretary of State must, so far as is reasonable, have regard to the rules on penalties applicable to infringements of the provisions of the EU Regulation and the measures taken to implement that regulation in other member States.

(3) The report must in particular-

(a)set out the objectives intended to be achieved by the rules on penalties applicable to infringements of the provisions of the EU Regulation that are established by these Regulations and the measures taken to implement them,

(b)assess the extent to which those objectives are achieved, and

(c)assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved with a system that imposes less regulation.

(4) The first report under these Regulations must be published before the end of the period of five years beginning with the day on which this Order comes into force.

(5) Reports under these Regulations are afterwards to be published at intervals not exceeding five years.

Revocations and Savings

13.-(1) Subject to paragraph (2), The European Grouping of Territorial Cooperation Regulations 2007(15) are revoked.

(2) Parts 2 and 3 of the Schedule to The European Grouping of Territorial Cooperation Regulations 2007 will continue to have effect.

(3) The European Grouping of Territorial Cooperation (Amendment) Regulations 2008(16), are revoked.

EXPLANATORY NOTE

(This note is not part of the Regulations)

Regulation (EC) No. 1082/2006 (OJ L 210, 31.7.2006, p.19) of the European Parliament and of the Council ("the Regulation") provided for the creation of a new form of body corporate: the European grouping of territorial cooperation. The European Grouping of Territorial Cooperation Regulations 2007 (S.I. 2007/1949) supplemented the provisions of the Regulation to ensure the effective application of the Regulation in the United Kingdom.

The Regulation has been amended by Regulation (EU) No 1302/2013 (OJ L 347, 20.12.2013, p.303) of the European Parliament and of the Council ("the EU Regulation"). These regulations revoke and replace The European Grouping of Territorial Cooperation Regulations 2007 to ensure the effective application in the United Kingdom of the EU Regulation in the United Kingdom. These Regulations also revoke The European Grouping of Territorial Cooperation (Amendment) Regulations 2008 (S.I. 2008/728).

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

A full transposition note is available from the European Reform Directorate, Department for Business, Innovation and Skills, 1 Victoria Street, London SW1H 0ET and is annexed to the Explanatory Memorandum which is available alongside the instrument at www.legislation.gov.uk