Last updated April 2006

A European Economic Interest Grouping (EEIG)1is a legal entity based on Community law. It allows entities from various Member States to develop cross-border activities through an external, independent and representative structure while retaining their economic and legal independence. The purpose of an EEIG is to contribute to the development of its members' economic activities.

Members of the EEIG may be companies and other legal entities established in the European Community, as well as natural persons performing an economic activity in the Community. An EEIG may be composed of a minimum of two members established in two different Member States.

The EEIG's activity must be related to the economic activities of its members and must be ancillary; it cannot replace the members' activities, except for a limited period. Similarly, the EEIG cannot generate profits for itself, and the profits that may derive from its activity shall be distributed equally among its members, unless otherwise agreed. Benefits are therefore taxable at the level of the EEIG's members.

The EEIG has full legal capacity. It acts in its own name, has full rights and obligations and can conclude contracts throughout the European Community, as well as with organisations based outside the Community borders. It can thus combine the resources and skills of its members and help them develop joint activities at European level. Note that the members' contribution to the EEIG is not necessarily financial, it may also be a contribution in kind or consist of intangible assets, such as know-how or intellectual property rights. Moreover, no start-up capital is required for its formation, and the ways in which it may be financed are flexible2 .

An EEIG may be formed by a private written contract that should include its name, its official address within the EU, its objects, information on its members (number and place of registration) and its duration, should it be limited. The contract shall be filed at the competent registry of the Member State where the EEIG will have its official address. If the EEIG has an establishment in another Member State, it should also be registered there.

The members may introduce additional clauses in the formation contract, for example concerning financing, sharing of profits and losses, voting procedures of the EEIG bodies, nomination and revocation of managers, entry or withdrawal of members, etc.3

An EEIG has a minimum of two bodies:

• The members acting collectively, who are responsible for carrying out the objective of the grouping and can make all necessary decisions to this end, such as whether to modify the objective, change the decision-making procedures, extend the duration of the grouping or amend the formation contract.
  
  Please note that the members have unlimited joint and several liability for the debts and other liabilities of the EEIG (although the liability of one or more of its members concerning a particular debt can be restricted or excluded).
  
  
• The managers take care of the EEIG's administration and representation. Please note that regardless of the powers given to the managers, when dealing with third parties, the EEIG is bound by any act carried out by the managers on behalf of the grouping, even if it goes beyond the scope of the EEIG's objective.
  
  

The EEIG is a suitable structure for entities wishing to collaborate in order to implement cross-border innovation activities, such as research and innovation projects funded by public funds4. It can be used in order to organise and coordinate the activities of its members and can also conclude agreements in its own name, since it has full legal capacity. In many cases, an EEIG can participate as the sole contractor in EU funded projects, as long as the entities that compose it comply with the requirements for minimum number of participants5.

There are a number of advantages to an EEIG created in such context:

1. in large part, EEIGs are regulated by Community law, contributing to the equity among their members;
   
   
2. the objective of the EEIG is very broad and can fit most sectors;
   
   
3. the formalities for creating an EEIG are very simple;
   
   
4. no start-up capital is required;
   
   
5. the EEIG may be set up for a limited period, corresponding for example to the duration of a project, or for an unlimited period, if for example an EEIG is created to ensure continuity of the work carried out by a project;
   
   
6. all forms of contribution are possible (for example contribution of pre-existing know-how and research expertise in a European research project);
   
   
7. an EEIG's official address can be transferred from one Member State to another, while preserving both its legal personality and capacity;
   
   
8. all members of the EEIG maintain their autonomy, their separate activities and their identities;
   
   
9. responsibilities and risks are shared between the members.
   
   

[For more detailed information on these issues, please consult the extended version of this document]