Redefining the Freedom of Establishment under EU Law as the Freedom to Choose the Applicable Company Law: A Discussion after the Judgment of the Court of Justice (Grand Chamber) of 25 October 2017 in Case C-106/16, Polbud

2018 ◽  
Vol 15 (2) ◽  
pp. 270-307 ◽  
Author(s):  
Ariel Mucha ◽  
Krzysztof Oplustil
Keyword(s):  
Limited Liability ◽  
Company Law ◽  
Eu Law ◽  
Minority Shareholders ◽  
Freedom Of Establishment ◽  
Legal Form ◽  
Court Of Justice ◽  
Registered Office ◽  
Grand Chamber ◽  
A Company

On 25 October 2017, the Court of Justice handed down a judgment in the Polbud case (C-106/16). This is the result of three preliminary questions raised by the Polish SC. The facts in the case concern the Polish private limited liability company which wanted to transfer its registered office to Luxembourg and to change its legal form. In general, the questions refer to two pertinent issues: first, if the national law providing for mandatory company’s liquidation in case of transferring the company’s seat abroad complies with the EU law, and second, if the so-called isolated cross-border conversion is covered by the freedom of establishment. With little doubt, the first question was answered in the negative. As to the second issue, the Court holds that it is not mandatory in the light of EU law for the company wishing to transfer its registered office and convert itself into a company governed by the law of another MS to establish an economic presence in that MS. It is likely that the Court of Justice’s findings will open another Pandora’s box with many unknown results, mainly concerning minority shareholders’ and creditors’ protection as well as further (un)desired liberalisation of the internal market.

scholarly journals The transfer of the company’s registered office

2016 ◽  
Vol 37 (1) ◽  
pp. 449-466 ◽  
Author(s):  
Saša Prelič ◽  
Jerneja Prostor
Keyword(s):  
Case Law ◽  
Company Law ◽  
Freedom Of Establishment ◽  
Legal Form ◽  
Cross Border ◽  
Court Of Justice ◽  
Registered Office ◽  
Real Seat ◽  
The Cross ◽  
The Eu

In the light of the relevant case law of The Court of Justice of the EU it is emphasized that the cross-border transfer of company’s registered office (and its real seat) must be permitted in accordance with the Treaty on the Functioning of the EU. Nevertheless, the Fourteenth Company law Directive should be adopted for the reasons of legal certainty and it should determine, whether the transfer of the registered office (without transfer of company’s real seat) to another Member State is admissible or not. Furthermore, the authors discuss the cross-border restructuring of the company, which in addition to relocation of the registered office also includes a change of its legal form. The Court of Justice of the EU has not yet decided on such cross-border restructuring, nevertheless it should be allowed based of the freedom of establishment (cross-border formal transformation).

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.

scholarly journals Some Current Problems with the Regulation of Limited Liability Companies in Serbia

2020 ◽  
Vol 1 (1) ◽  
pp. 131-145
Author(s):  
Vladimir Marjanski ◽  
Attila Dudás
Keyword(s):  
European Union ◽  
Legal Status ◽  
Limited Liability ◽  
Company Law ◽  
The European Union ◽  
Legal Form ◽  
Legal Norms ◽  
Legal Forms ◽  
A Company

In Serbia, the legal status of limited liability companies (LLCs; društvo sa ograničenom odgovornošću, d.o.o.) is for the most part regulated by the Companies Act (Zakon o privrednim društvima). All four basic legal forms of company are regulated by this Act. Unlike in Austria and Germany, there are no special laws on LLCs and joint stock companies (JSCs). Regulating all legal forms of a company with the same act, including procedures for their liquidation, status changes (acquisition, merger, division, and spin-off), and changes of legal form, may be considered a conceptual shortcoming of the regulation relating to LLCs and of company law in Serbia in general. A specific law would enable legislators to tailor detailed rules pertaining only to LLCs, in which all peculiarities of this legal form of companies might be better addressed. Furthermore, there are relatively numerous legal norms applicable to JSCs, the appropriate application of which is can be legally extended to LLCs. However, most of them are not conceptually applicable due to the different nature of JSCs and LLCs. In addition, company law will have to undergo significant changes in upcoming years due to the process of accession of Serbia to the European Union and the fulfilment of the conditions contained in chapter 6 of the accession negotiations pertaining to company law.

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.

3. Registration

2021 ◽  
pp. 35-64
Author(s):  
Derek French
Keyword(s):  
Limited Liability ◽  
Public Disclosure ◽  
Public Companies ◽  
Registration Process ◽  
Registration Procedure ◽  
Registered Office ◽  
Private And Public ◽  
A Company ◽  
Corporate Personality

This chapter discusses the process of registration for the incorporation of companies under the Companies Act 2006. It considers the distinction between private and public companies, the meaning of limited liability and the significant characteristics of the company created by the registration procedure at Companies House, such as a company’s separate corporate personality (which is highly artificial), its members, shareholding, directors, secretary, name, constitution and its registered office and domicile. To deter misuse of companies, the registration process involves disclosing much information about a company which is then available for public inspection. This process of public disclosure continues throughout a company’s existence.

Majority and Minority Shareholders

2020 ◽  
pp. 119-174
Author(s):  
Paul Davies
Keyword(s):  
At Risk ◽  
High Risk ◽  
Small Group ◽  
Company Law ◽  
Minority Shareholders ◽  
Private Benefits ◽  
Controlling Shareholders ◽  
The Third ◽  
Wide Range ◽  
A Company

Where a company has a controlling or a small group of controlling shareholders, the non-controlling shareholders are at risk that the controllers will extract private benefits of control at the expense of the non-controllers. UK company law contains a wide range of techniques for addressing this issue, some more effective than others. This chapter begins by examining the various ways in which well-advised investors can contract for protection before they enter the company and how the law protects the agreements reached. The second part discusses rights to exit the company upon the occurrence of certain events. The third part discusses disclosure rights, designed to bring self-dealing transactions into the open. The fourth focuses on ways of structuring the board or shareholder body when the decision before it carries a high risk of self-dealing. The final part considers cases where the courts review the substantive fairness of the controllers’ conduct, notably, but not only, the provisions on ‘unfair prejudice.

5. Majority and Minority Shareholders

2020 ◽  
pp. 119-174
Author(s):  
Paul Davies
Keyword(s):  
At Risk ◽  
High Risk ◽  
Small Group ◽  
Company Law ◽  
Minority Shareholders ◽  
Private Benefits ◽  
Controlling Shareholders ◽  
The Third ◽  
Wide Range ◽  
A Company

Where a company has a controlling or a small group of controlling shareholders, the non-controlling shareholders are at risk that the controllers will extract private benefits of control at the expense of the non-controllers. UK company law contains a wide range of techniques for addressing this issue, some more effective than others. This chapter begins by examining the various ways in which well-advised investors can contract for protection before they enter the company and how the law protects the agreements reached. The second part discusses rights to exit the company upon the occurrence of certain events. The third part discusses disclosure rights, designed to bring self-dealing transactions into the open. The fourth focuses on ways of structuring the board or shareholder body when the decision before it carries a high risk of self-dealing. The final part considers cases where the courts review the substantive fairness of the controllers’ conduct, notably, but not only, the provisions on ‘unfair prejudice.

The ECJ's Inspire Art Decision of 30 September 2003 and its Effects on Practice

2003 ◽  
Vol 4 (12) ◽  
pp. 1277-1291 ◽  
Author(s):  
Christian Kersting ◽  
Clemens Philipp Schindler
Keyword(s):  
Company Law ◽  
Foreign Company ◽  
Freedom Of Establishment ◽  
Legal Proceedings ◽  
Host State ◽  
Foreign Companies ◽  
Court Of Justice ◽  
European Court ◽  
Inspire Art ◽  
The Right

In its most recent judicature the European Court of Justice (ECJ) continued its tendency of deciding in favor of the freedom of establishment by holding that rules submitting pseudo-foreign companies to the company law of the host state were inadmissible. It clarified that a foreign company is not only to be respected as a legal entity having the right to be a party to legal proceedings, but rather has to be respected as such, i.e. as a foreign company that is subject to the company law of its state of incorporation. Any adjustment to the company law of the host state is, hence, not compatible with European law. In addition to commenting on the decision and its effects, this article points out potential for corporate restructuring in the field of codetermination.

scholarly journals Perlindungan Hukum Terhadap Pemegang Saham Minoritas Pada Perseroan Terbatas Yang Melakukan Merger

2020 ◽  
Vol 2 (1) ◽  
pp. 59-62
Author(s):  
I Kadek Sridana ◽  
I Nyoman Putu Budiartha ◽  
I Putu Gede Seputra
Keyword(s):  
Research Method ◽  
Government Regulation ◽  
Legal Protection ◽  
Limited Liability ◽  
Limited Liability Company ◽  
Minority Shareholders ◽  
Legal Position ◽  
The Law ◽  
A Company

Abstract-Mergers can be said as a strategy or one way to increase a company, therefore there is a need for legal protection for minority shareholders if they do not agree with the merger but the merger is still implemented, and the shareholders are forced to accept the merger. The formulation of the problem in this case is (1) what is the position of the minority shareholders for the limited liability company that merges? (2) What is the legal protection of minority shareholders in a limited liability company that merges? This research method uses a normative research method by approaching the problem in the form of a draft law that relates to the problem under study. The sources of legal material to be used are sourced from research, the literature in the form of primary legal material and secondary legal material. The result of this study are the legal position of the minority shareholders of the company (PT) that carried out the merger has been regulated in Law number 40 of 2007 concerning Limited Liability Companies and in Government Regulation Number 27 of 1998 concerning merger, consolidation and takeover of the interests of minority shareholders. In general, the law of limited liability companies is a guideline in the framework of protecting minority shareholders. Protection of minority shares is one of the important things, especially when the company conducts legal actions such as mergers, both preventive legal protection and repressive legal protection. Keywords: Legal protection, shareholders, mergers Abstrak- Merger dapat dikatakan sebagai strategi atau salah satu cara untuk meningkatkan suatu perusahaan oleh karena itu perlu adanya perlindungan hukum terhadap pemegang saham minoritas apabila mereka tidak setuju dengan merger namun merger tetap dilaksanakan, dan pemegang saham tersebut dipaksakan untuk menerima merger tersebut. Adapun rumusan masalah dalam hal ini (1) Bagaimanakah kedudukan pemegang saham minoritas bagi perseroan terbatas yang melakukan merger? (2) Bagaimanakah perlindungan hukum terhadap pemegang saham minoritas pada perseroan terbatas yang melakukan merger? Metode penelitian ini menggunakan metode penelitian normatif dengan melakukan pendekatan masalah berupa pedekatan perundang-undangan yang berkaitan dengan masalah yang dikaji. Adapun sumber bahan hukum yang akan digunakan yakni bersumber dari penelitian, kepustakaan berupa bahan hukum primer dan bahan hukum sekunder. Adapun hasil dari penelitian ini adalah kedudukan hukum pemegang saham minoritas terhadap perusahaan (PT) yang melakukan merger, sudah diatur dalam Undang-undang nomor 40 tahun 2007 tentang Perseroan terbatas serta dalam Peraturan pemerintah Nomor 27 Tahun 1998 tentang penggabungan, peleburan, dan pengambilalihan tentang kepentingan pemegang saham minoritas. Secara umum hukum perseroan terbatas menjadi pedoman dalam rangka perlindungan pemegang saham minoritas. Perlindungan terhadap saham minoritas merupakan salah satu hal yang penting terutama saat persroan melakukan perbuatan hukum seperti merger baik perlindungan hukum secara preventif maupun perlindungan hukum secara represif. Kata kunci: Perlindungan hukum, Pemegang saham, Merger

scholarly journals CROSS–BORDER MERGERS – THE CONCEPT AND ITS IMPLEMENTATION INTO THE LEGAL ORDER OF THE SLOVAK REPUBLIC CEZHRANIČNÉ ZLÚČENIE ALEBO SPLYNUTIE

2013 ◽  
Vol 2 (2) ◽  
pp. 54-60
Author(s):  
Jarmila Lazíková ◽  
Lucia Belková ◽  
Zuzana Ilková ◽  
Jana Ďurkovičová
Keyword(s):  
European Union ◽  
Slovak Republic ◽  
Limited Liability ◽  
Legal Order ◽  
Central Administration ◽  
The European Union ◽  
European Union Law ◽  
Legal Form ◽  
Cross Border ◽  
Registered Office

Abstract Cross-border mergers are regulated by the Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on crossborder mergers of limited liability companies. This article deals with the issue of cross-border mergers of limited liability companies within the internal market of the European Union, more precisely it analyzes the question of the concept of a cross-border merger under the European Union law and its implementation into the national legal order of the Slovak Republic. The legal definition of a cross-border merger under the European Union law comprises three key conditions that must be met cumulatively: cross-border merger is applicable only for a business company formed in accordance with the law of an EU Member State, having its registered office, central administration or principal place of business within the Community, and at the same time business company must be in an eligible legal form and a cross-border element must be given.

Sign in / Sign up

Export Citation Format

Share Document