Making the Case for a Rome V Regulation on the Law Applicable to Companies

There is significant legal variation and uncertainty in the conflict of laws rules applicable to companies in the EU. While the case law of the Court of Justice on the freedom of establishment has clarified some questions, it is evident that case law cannot provide for an adequate level of legal certainty. The main recommendation of this article is that private international company law in the EU should be harmonized. The article discusses the main challenges that a future regulation to this effect—called here ‘Rome V Regulation on the Law Applicable to Companies’—would have to overcome. Some of those are of a political nature: for instance, countries may fear that it may become easier for companies to evade domestic company law (eg, rules of employee co-determination), and there are specific considerations that concern companies established in third countries. Another challenge is that a future regulation on the law applicable to companies has to be consistent with existing EU conflict of laws rules as regards, for example, insolvency and tort law, while also complying with the freedom of establishment of the Treaty. It is the aim of this article to discuss these questions in detail, notably the general considerations for harmonisation in this field, a potential harmonization based on the ‘incorporation theory’, how it may be possible to overcome some contentious issues such as the definition of the lex societatis or the relationship between the lex societatis and other areas of law, and the prospects for future international harmonization.

Reincorporations: a comparison between Greek and Cyprus law

Purpose This paper aims to analyse the legal framework of reincorporations and subsequent change of applicable law in Greece and Cyprus. A comparison between Greek Law and Cyprus Law is drawn. This paper highlights possible required reforms. Cyprus has a quite detailed legal framework of voluntary inbound and outbound reincorporations. While Greece has certain provisions on outbound reincorporations, it does not have any provisions on inbound reincorporations. The compatibility of these national provisions with internal market rules, as interpreted by the case law of the Court of Justice of the EU (CJEU), is discussed. Design/methodology/approach This paper follows a comparative approach. After a careful analysis of each national legal framework, a comparison between Greek law and Cyprus law follows. This paper also follows an EU law approach. Findings These two jurisdictions present some differences. Cyprus adopting the incorporation theory has a detailed, sophisticated and flexible legal framework of reincorporations. Although Greece adopting the real seat theory has some special provisions for outbound reincorporations, there are no specific provisions for inbound reincorporations. Inbound reincorporations are possible under Greek law, but the absence of detailed provisions is against legal certainty. Cyprus law on reincorporations could be used as an example for Greek legislature. However, possible EU harmonisation of seat transfers is expected to have an immense impact on national provisions for reincorporations. Practical implications Reincorporations constitute a significant corporate restructuring technique with important practical implications on the economy. Apart from academics, this paper attracts the interest of lawyers, managers, accountants, officers of supervisory and regulatory bodies and policymakers engaged with reincorporations. Originality/value This is one of the few academic papers comparing Greek and Cyprus company law and private international law. It is the first paper that compares the Greek and Cyprus legal framework of reincorporations.