Original scientific paper
Freedom of movement of companies in the European Union
Davor Babić
Abstract
In European company law, the idea of regulatory competition is increasingly being preferred to top-down unification. It is increasingly accepted that investors should be entitled to establish companies in any Member State regardless of the real seat of the company. Freedom to choose among the jurisdictions of all Member States should provide an incentive to lawmakers to design their laws in such a way that they are attractive to investors. Each Member State would thus offer its company law as a product on the single market. Such competition among lawmakers might lead to higher efficiency as well as a higher degree of convergence of company laws of the Member States than that achieved through high level political compromises. This paper analyses the regulatory requirements for the emergence of a market for company law in Europe, i.e. the issue whether the EC Treaty guarantees companies and their founders the right to choose the Member State of registration (corporate mobility or free movement of companies). The paper firstly addresses main features of the freedom of establishment which forms the legal basis for the freedom of choice of company law in primary EC law. The paper then analyses the freedom of choice at the moment of establishment and during the company's existence. Finally, the paper analyses the exceptions to the free choice of company law developed in the case law of the European Court of Justice. We conclude with the proposition that primary EC law does guarantee corporate mobility sufficiently to allow a creation of a European market for company law.
Keywords
private international law; company law; EC law; regulatory competition; cross-border mergers; cross-border transfer of company seat
Hrčak ID:
6433
URI
Publication date:
5.12.2006.
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