The End of the Real Seat Theory (Sitztheorie): the European Court of Justice Decision inUeberseeringof 5 November 2002 and its Impact on German and European Company Law

2002 ◽  
Vol 3 (12) ◽  
Author(s):  
Kilian Baelz ◽  
Teresa Baldwin
Keyword(s):  
Member State ◽  
Central Place ◽  
Company Law ◽  
European Court Of Justice ◽  
Legal Capacity ◽  
Freedom Of Establishment ◽  
Court Of Justice ◽  
European Court ◽  
Real Seat ◽  
A Company

In a long awaited judgement delivered on 5 November 2002, the European Court of Justice (ECJ) has ruled that it isincompatiblewith the freedom of establishment guaranteed in Arts. 43 and 48 EC for a member state to deny a company formed in a member state which moves its central place of administration to another member states, legal capacity (and standing to sue or be sued in courts). Against the expectations of many German legal commentators and the recommendation of the Advocate General, the ECJ also held that where a company incorporated in another member state exercises its freedom of establishment in another member state, that other member state isrequired to recognisethe company's legal capacity (and capacity to be a party to legal proceedings) which it enjoys under the laws of its state of incorporation.

Prospects for European Company Law After the Judgment of the European Court of Justice in Centros Ltd

1999 ◽  
Vol 2 ◽  
pp. 203-230
Author(s):  
Karsten Engsig Sørensen
Keyword(s):  
Member State ◽  
Company Law ◽  
European Court Of Justice ◽  
The European Union ◽  
Court Of Justice ◽  
European Company Law ◽  
European Court ◽  
Set Up ◽  
The Right ◽  
A Company

The ruling of the European Court of Justice in C-212/97 Centros Ltd v. Erhvervs- og Selskabsstyrelsen suggests that the right of establishment enshrined in Article 43 (ex Article 52) of the EC Treaty includes the right to incorporate a company in the EC Member State with the most favourable company laws. The case provides a platform for arguing that choice of place of incorporation within the European Union is at the absolute discretion of business operators, after which point branches may be set up in any other Member State. Even if all activities are conducted in the Member State where the branch is situated, rather than in the Member State of incorporation, no abuse of Article 43 will arise, and the Member State in which the branch is located may be in no position to impede the establishment of a business which has utilised the vehicle of a foreign company.

Prospects for European Company Law After the Judgment of the European Court of Justice in Centros Ltd

1999 ◽  
Vol 2 ◽  
pp. 203-230
Author(s):  
Karsten Engsig Sørensen
Keyword(s):  
Member State ◽  
Company Law ◽  
European Court Of Justice ◽  
The European Union ◽  
Court Of Justice ◽  
European Company Law ◽  
European Court ◽  
Set Up ◽  
The Right ◽  
A Company

The ruling of the European Court of Justice in C-212/97Centros Ltdv.Erhvervs- og Selskabsstyrelsensuggests that the right of establishment enshrined in Article 43 (ex Article 52) of the EC Treaty includes the right to incorporate a company in the EC Member State with the most favourable company laws. The case provides a platform for arguing that choice of place of incorporation within the European Union is at the absolute discretion of business operators, after which point branches may be set up in any other Member State. Even if all activities are conducted in the Member State where the branch is situated, rather than in the Member State of incorporation, no abuse of Article 43 will arise, and the Member State in which the branch is located may be in no position to impede the establishment of a business which has utilised the vehicle of a foreign company.

Centros Ltd—A Complete U-Turn in the Right of Establishment for Companies?

2000 ◽  
Vol 49 (3) ◽  
pp. 621-642 ◽  
Author(s):  
Anne Looijestijn-Clearie
Keyword(s):  
United Kingdom ◽  
Member State ◽  
European Court Of Justice ◽  
The United Kingdom ◽  
Court Of Justice ◽  
European Court ◽  
Registered Office ◽  
Set Up ◽  
The Right ◽  
A Company

InCentros Ltd and Erhvers-og Selskabsstyrelesen (hereinafter Centros),1 the European Court of Justice ruled that it is contrary to Article 52 (now Article 432) and Article 58 (now Article 48) of the EC Treaty for the authorities of a member State (in casu Denmark) to refuse to register a branch of a company formed under the law of another member State (in casu the United Kingdom) in which it has its registered office, even if the company concerned has never conducted any business in the latter State and intends to carry out its entire business in the State in which the branch is to be set up. By avoiding the need to form a company there it would thus evade the application of the rules governing the provision for and the paying-up of a minimum share capital in force in that State. According to the Court, this does not, however, prevent the authorities of the member State in which the branch is to be set up from adopting appropriate measures for preventing or penalising fraud, either with regard to the company itself, if need be in co-operation with the member State in which it was formed, or with regard to its members, where it has been determined that they are in fact attempting, by means of the formation of a company, to evade their obligations towards creditors established in the territory of the member State of the branch.

The Judicial Control of a Cross-Border Merger approved by means of an abusive resolution

2021 ◽  
Vol 18 (5) ◽  
pp. 773-793
Author(s):  
Andrés Recalde-Castells ◽  
Antonio Roncero-Sánchez
Keyword(s):  
Company Law ◽  
European Court Of Justice ◽  
Freedom Of Establishment ◽  
Judicial Control ◽  
Applicable Law ◽  
Appeal Court ◽  
Judicial Decisions ◽  
Cross Border ◽  
Court Of Justice ◽  
European Court

The fight for the control of the Mediaset group has given rise to several judicial decisions issued in various national jurisdictions and even by the European Court of Justice. Three orders of Spanish Courts have been of particular interest. Two of them were issued by a Commercial Court in Madrid and the third one was issued on appeal by the Provincial Appeal Court Madrid. They instructed the suspension of the shareholders meeting resolutions of the Spanish Mediaset company approving a cross-border merger. The content of this resolution was to approve the acquisition of the Spanish company by another company domiciled in the Netherlands thus changing the applicable law. The resolution approving the merger was presumed (provisionally) to be abusive and, eventually, null and void. The decisions of the Spanish Court were grounded on the fact that the articles of association of the resulting Dutch company would be detrimental to the minority in the Spanish company. This limits the freedom of establishment (Art. 49 TFEU) and is based on a multilevel scrutiny, resulting from the national laws applicable to each company that participates in the merger. Those judicial decisions handled with other issues of interest in company law, such as the conclusive effect of the registration of a cross-border merger, the legitimation of the minority to challenge shareholders resolutions, or the effects of a shareholders meeting resolution replacing a previous merger resolution that has been challenged before the courts.

scholarly journals Steigimosi laisvė po Cartesio bylos: ES inkorporavimo doktrinos trūkumas ir to padariniai

Teisė ◽  
2010 ◽  
Vol 75 ◽  
pp. 143-158
Author(s):  
Robertas Čiočys
Keyword(s):  
International Law ◽  
Case Law ◽  
European Court Of Justice ◽  
Private International Law ◽  
Freedom Of Establishment ◽  
Cross Border ◽  
Court Of Justice ◽  
European Court ◽  
Real Seat

This article defines private international law doctrines of incorporation and real seat and then turns to the analysis of freedom of establishment guaranteed by the EC Treaty. The article analyses judgments of the European Court of Justice, interpreting the freedom of establishment in cases where companies tried to transfer their seats across frontiers, especially in light of the newest judgment in this area in the Cartesio case. The analysis of case law shows the link between the freedom of establishment and private international law doctrines. The article is concluded by a discussion of opportunities that free­dom of establishment provides for companies, alternatives for cross-border business restructurings and implications of rising number of these activities. Straipsnyje apibūdinamos tarptautinės privatinės teisės taikomos inkorporavimo ir buveinės doktri­nos ir tada analizuojama EB steigimo sutarties garantuojama steigimosi laisvė. Aptariama Europos Tei­singumo Teismo praktika interpretuojant steigimosi laisvę bylose, kai bendrovės bandė perkelti buveinę už valstybės ribų. Atsižvelgiant į tai, kaip supratimą keičia naujausia byla šioje srityje − Cartesio. Teis­mo praktikos analizė parodo steigimosi laisvės ir tarptautinės privatinės teisės doktrinų ryšį. Straipsnis baigiamas aptariant galimybes, kurias bendrovėms suteikia steigimosi laisvė, ir alternatyvas, kuriomis jos gali pasinaudoti, siekdamos pertvarkyti verslą, kai tai apima kelias valstybes, bei šio reiškinio dažnė­jimo padarinius.

Wyrok Trybunału Sprawiedliwości w sprawie National Grid Indus BV – złote runo czy puszka Pandory?

2014 ◽  
pp. 24-42
Author(s):  
Ewa Prejs
Keyword(s):  
Member State ◽  
Capital Gains ◽  
European Court Of Justice ◽  
Member States ◽  
Court Of Justice ◽  
European Court ◽  
A Company ◽  
Domestic Law ◽  
Interest Payments

This paper examines the decision of the European Court of Justice in the National Grid Indus case issued on 29 November 2011, concerning exit tax levied on unrealised capital gains relating to the assets of a company transferring its place of management for tax purposes between Member States. The author indicates the significance of the judgment. She generally shares the ECJ’s opinion but argues that justifications based on the need to safeguard the allocation of taxing rights among Member States should not be rejected by the ECJ without any differentiation regarding specific circumstances. The author also considers whether the ECJ changed its view on the provisions introduced by the member states in their domestic law relating to remedies safeguarding the recovery of the tax, such as interest payments and bank guarantees, and mandatory provisions allowing for future decreases in value of the company assets transferred to another Member State.

scholarly journals THE MYSTERIES OF FREEDOM OF ESTABLISHMENT AFTER CARTESIO

2010 ◽  
Vol 59 (2) ◽  
pp. 303-323 ◽  
Author(s):  
Carsten Gerner-Beuerle ◽  
Michael Schillig
Keyword(s):  
European Union ◽  
Company Law ◽  
European Court Of Justice ◽  
Coherent System ◽  
Private International Law ◽  
The European Union ◽  
Freedom Of Establishment ◽  
Court Of Justice ◽  
European Court ◽  
The Right

AbstractThe judgment of the European Court of Justice in Cartesio was eagerly awaited as a clarification of the questions concerning the scope of the right of establishment (articles 49, 54 Treaty on the Functioning of the European Union (TFEU), (ex-articles 43, 48 EC) that remained after previous landmark decisions such as Centros, Überseering, and Inspire Art. This article analyses the implications of Cartesio in light of different scenarios of transfer of the registered and the real seat within the European Union. It assesses the interrelations of right of establishment and private international law rules for the determination of the law applicable to companies and concludes that the case law of the European Court of Justice after Cartesio, rather than providing for a coherent system of European company law, leads to arbitrary distinctions and significantly impedes the free movement of companies.

scholarly journals Transfer of Company's Seat - an Unfolding Story in Europe

2005 ◽  
Vol 36 (2) ◽  
pp. 359
Author(s):  
Carsten Frost
Keyword(s):  
Company Law ◽  
European Court Of Justice ◽  
The European Union ◽  
Freedom Of Establishment ◽  
Member States ◽  
European Company ◽  
Court Of Justice ◽  
European Company Law ◽  
European Court ◽  
Controversial Area

The harmonisation of company law has long been a goal of the European Union. Questions concerning the freedom of establishment have always been both a central and controversial area of European law. The European Court of Justice has decided in favour of the freedom of establishment of EU companies establishing themselves in other Member States in several cases since Centros in 1999, resulting in a discernible and consistent line of authority. The Court has made clear that Member States have to allow companies that have been incorporated in other Member States to freely enter their territory, according to the rules under which they have been formed in their state of origin. But the decisions have left other important questions open to doubt. The purpose of this article is to examine the consequences of these judgments, not only for European company law, but for related legal areas as well. The paper addresses this issue by giving a short overview on the freedom of establishment under the Treaty Establishing the European Community and on the existing European theories about the transfer of a company’s seat. It then analyses the European Court of Justice cases and their implications. The article argues that the pressure on national legislators that arises from the judgments helps to keep European company law attractive to investors. It concludes that an increased mobility of companies within Europe is necessary if Europe is to remain competitive on an international level, even if the price of this is the abolition of some traditional domestic legal principles.

Would chocolate by any other name taste as sweet?

2003 ◽  
Vol 4 (6) ◽  
pp. 571-587 ◽  
Author(s):  
Donald Slater
Keyword(s):  
Member State ◽  
Free Trade ◽  
European Community ◽  
Consumer Protection ◽  
Case Law ◽  
Generic Product ◽  
European Court Of Justice ◽  
Court Of Justice ◽  
Food Law ◽  
European Court

Food law in the European Community is a touchy subject. One of the big ongoing debates in this area centres on the question of what names we call our foodstuffs by. In an internal market where local supermarket shelves are stocked with products coming from all around the EC and beyond, how can we be sure that the contents of the packets conform to our connotations of the name on the label? For example, if it says “chocolate” on the label, how can we be sure that it really is “chocolate” within our understanding of the word? The question of what names can or should go on labels is, sadly, very complicated. This article therefore intends to look at only one aspect of this problem: when a Member State is allowed to insist that the name of an imported “generic” product be changed. We will begin by briefly looking at the case law and one of the major pieces of legislation in this area – the Labelling Directive – before going on to discuss application of the law to the recent Chocolate Cases, handed down by the European Court of Justice (hereafter the “Court”) at the beginning of this year. This discussion will give some (hopefully) interesting insights into the way in which primary law, as interpreted by the Court, and secondary legislation interact and into the balancing of consumer protection and free trade performed by the Court.

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