The FAQ on legal form for a European RI is targeting to support this selection process and is based on the experiences and documents of the Preparatory Phase Projects of the ESFRI projects funded by the EC. It gives a summary on existing legal entities used by RIs. The statutes of ESFRI projects already established as a legal entity can be downloaded at http://www.copori.eu/1324.php.
1. What kind of collaboration shall be intended?
2. What are the lessons that can be learnt from existing legal schemes of research infrastructures?9
3. What are the possible key criteria for the selection of a legal form?2,6
4. Which legal forms are used by research infrastructure?
5. What are the most important aspects of international legal forms
6. What are the most important aspects of European legal forms?
7. What are the most important aspects of the legal forms of national companies with limited liability?
8. What are the most important aspects of the legal forms of national foundations?
9. What are the most important aspects of the legal forms of national associations?
10. Links for further information to legal forms?
11. Documents on legal forms for research infrastructures/References?
The legal form depends strongly on the kind of collaboration the partners want to mutualize.
A contractual form only such as a simple collaboration contract or an agreement like a Memorandum of Understanding (MoU) is suitable:
A dedicated legal entity is more interesting if…
The ESFRI project CTA has investigated the legal constructions of several large research infrastructures. The following extracts can be a helpful in the decision process of establishing legal contracts:
Before you select a legal form it is advisable to be aware of the specific needs and requirements of the future RI and to derive key criteria for a comparison of legal forms. The next picture gives an overview of criteria, projects have identified in the process of choosing a legal structure.
Independent of the legal form, the simple contract or a legal entity, the basic legal document should contain the following elements:
Who are the partners (members and shareholders)?
It is advisable to analyze the situation of all partners concerned for instance by a stakeholder analysis. Criteria for instance amount, nationality, status and perception should be considered because of their influence on the choice of a legal structure.
Research partners can be
Legal forms have restrictions or additional requirements in relation to special kinds of members.
The following table gives an overview:
|Member Status||Restrictions/Additional requirement|
|States||...have to conclude intergovernmental agreements excepted at ERIC and international organisations|
|Members on the behalf of a state/state-owned entities||...need financial guaranties|
|Non-profit bodies/public funded bodies|| ...may need an approval of their funders or board and have legal restrictions for taking part in some entities (commercial structures, EEIG, …)
…may not be members of an ERIC but may represent their state
|Profit bodies||…may not be members of an ERIC.|
|Non-European bodies||…may not be members of an EEIG|
|Members on the behalf of other organizations (national representation)||…have to build a consortium.|
Which issues have to be considered to establish the certain legal entity for a research infrastructure?
|Time to implement1||Time period estimated for setting up the legal entity
|Cost to set up1||Costs of setting up a legal entity are affected of the length of negotiations and the extent of the involvement of legal Services…
|Minimum start capital||Which nature do the incorporations have if constitution of capital is required?
|Seat||The seat of the research infrastructure has to be fixed in the statutes.
National regulations needed for the national legal entity should be considered in the process of choosing the seat by example Intellectual Property Rights (IPR), Ethical properties, Labour law, which national legal structures are available?
|Formal requirements||What are those and do they limit the process?|
Which financial issues are fixed in the legal form?
|Tax Charge||Should the legal form be able to establish tax efficient vehicles for individual procurements?
|Financing Options||Which height of the budget is necessary?
What are the contributions of the members/funding agencies?
What are the modalities of investment of the partners?
How is the ownership?
Which sources of external financing (grants, loans,…) do exist and are they allowed?
Which own resources of the RI are available by adoption of a commercial structure?
Should the legal form be compatible with the chosen funding model?
How to hold the accounting?
|Flexible Procurement||How is its submission to public procurement rules? Should the legal form allow the exemption from national and European procurement rules (for certain situations)?|
Which kind of staff employment does the legal form allow?
|Employment||Does the legal form allow employing of the staff at all?
Should the legal form allow staff privilege e.g. exemption from income tax be allowed?
|Mobility||Are conditions like frequent renewal of the RI (temporary staff for short periods) or personnel in different places in Europe possible to be considered?
|Status||Civil servants, recruited under labour law, …|
Does the legal form allow the chosen governance structure?
|Structure||Which boards have to be established and how complex can be the governance structure?
|Control||What are the modalities of control? (By one or several governmental organisations (ministries), European Commission or external Auditors)
|Liability||What are the liability conditions between members and towards third parties? This issue is very important for funding agencies.
|Flexible for Usage1||Should the legal form be compatible with a transition of the organization?
|Ownership and Share Transfer1||Should the legal form discover changes of the degree of participations?|
Which operational issues should be discussed before choosing a legal form?
|Access to the services||
How to finance the access?
How to organize the access?
Which are the selection criteria?
How does the decision making process look like?
|Intellectual property rights2||Will IPR be produced/held by the legal entity or by the individual RIs?
Will commercial exploitation of IPR take place at the level of the legal entity or at the individual RIs?
How does the general characteristic of the legal form look like?
|Designed for Research1
||Does the legal form is applicable for research organizations?
||Are there predominant influences of one or more shareholders?
|Should the legal form be recognized by all EU-countries?
|Nonprofit Objective of the RI1
||Should the legal form be conceived purely for commercial purposes or should it exclude relations with industries?
IGO Inter-Governmental Organisation
|CERN, EMBL, ESA, ESO, ILL|
|ERIC European Research Infrastructure||CLARIN1, SHARE1, Lifewatch13, ICOS13
DARIAH13, BBMRI13, EATRIS13, ESS Survey13,
EURO-ARGO13, ECRIN13, C-ERIC23, ESS AB13
|LIMITED LIABILITY COMPANIES|
|GmbH Gesellschaft für beschränkte Haftung||DE||European X-FEL, INFRAFRONTIER|
|Ltd Private limited Company||UK||INSTRUCT Academic Services Limited|
|AB Aktiebolag||SE||ESS AB|
|SC Sociedad Civil||ES||/|
|AISBL International Belgian Association||BE||PRACE, ELI|
|Stiftung des bürgerlichen Rechts||D||DESY|
1 Examples: 1 ESFRI, 2 non-ESFRI, 3 applied
There are various international legal forms but only the international organization as an Intergovernmental Organization (IGO) has been used in the past for the operation of a research infrastructure. An IGO requires the approval of the States. Governments do not like the independency and nearly incompressible budgets of an IGO ensured by specific treaties.
The establishment of EMBL as an international organization in the final legal form took in total 12 years:
Start preparation: 1962
Foundation of EMBO: 1963
Foundation of EMBC: 1968, associating 14 governments
Legal entity: 1974
Beside ERIC there exist no other European legal forms which can be adapted to a RI. Therefore this chapter is restricted to ERIC. If you are interested in other European form, please see here.
National legal forms are well known by the hosting country and depend on their national laws. The legal regulations are less known by parties of other countries. Negotiations for agreements between countries on the basis of national law can take a long time, because countries my dislike one the one hand funding a legal entity that is controlled by national law of another country and the idea of long term financial commitments subjected to taxation and generating returns in other Countries. Overall one can say the national regulations concerning companies with limited liability do not differ much.
Gesellschaft mit beschränkter Haftung (GmbH) DE
The establishment of European XFEL as a GMBH in the final legal form took in total XX years:
Start preparation: 19
Private Company Limited by Shares/by guaranty (Ltd) UK
Societé Civile FR
The establishment of the ESRF as a Societé Civile with an international agreement in the final legal form took in total 14 years:
Start preparation: 1975
Chosen location: 1985
Foundation phase report: 1987
Start construction: 1988
Legal entity: 12.01.1989
Sociedad Civil ES
Foundación Spain ES
German Association DE
Associations Internationales Sans But Lucratif (AISBL) BE
|Sociedad Civil ES|
|SC Societé Civile FR|
|Private Company Limited by Shares/by guaranty (Ltd) UK||https://www.gov.uk/limited-company-formation/overview|
|Stiftung bürgerlichen Rechts DE||http://www.stiftungen.org/de/news-wissen/stiftungsgruendung.html|
|Foundación Spain ES|
|German Association DE||http://www.buzer.de/gesetz/6597/b17811.htm
|1||RAMIRI Handbook Legal and Governance Issues Chapter 3, http://www.ramiri-blog.eu/, 04.04.2013, RAMIRI|
Comparisons and Choice of legal forms
|2||Possible legal organization of research infrastructures (ESFRI Projects), NOTE for SYNAPSE on possible legal structuration of an ESFRI project.pdf, 15.04.2009?, CEA|
|3||D2.1.1 Report on options for a legal entity, D2-1-1-ESFRI Deliverable Report on options for a legal entity 19032009.pdf, 29.09.2008, PRACE|
|4||Report of the Workshop on the legal forms of research infrastructures of pan-European interests, march-2006_en report of the workshop on the legal forms of RI of pan Euro interest.pdf, 23.03.2006, EC|
|5||Overview of the different legal entities which can be established to realise a Network of excellence for Helmholtz-Institutes, HGF-Analysis on the best legal entity for NoE_LMetzger.doc, 20.04.2009|
|6||Key parameters for the choice of a legal structure, Key parameters for the choice of legal structure.ppt, Infrafrontier|
|7||EMFL PROJECT –WP2 Types of legal structures, EMFL|
|8||Draft template Vergleich Statute, Draft Template Vergleich Statute.doc, 19.10.2009, EuroFEL, Comparison of EuroFEL, CESSDA, CNRS ERIC template|
|9||REPORT ON OPTIONS FOR LEGAL FRAME-WORK AND STUDY OF THE SUITABILITY OF ERIC IN PARTICULAR, CTA_DELIVERABLE 102.2 final.pdf, 22.02.2012, CTA, CERN, ESO, ILL ESRF, XFEL, AUGER, IRAM|
|10||Rechtsformen im Überblick Institut für freie Berufe Nürnberg Stand: November 2012
|12||Report of the Workshop on the Legal forms of research infrastructures of pan-European interests
ftp://ftp.cordis.europa.eu/pub/esfri/docs/march-2006_en.pdf, Stand 23.03.2006