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V. Corporate Mobility
- Leuven University Press
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– 287 – Corporate Mobility Marieke Wyckaert1 and Filip Jenné2 Jan Ronse Institute – K.U.Leuven Abstract Starting from the right of primary and secondary establishment embedded in the EC Treaty, and the presence, throughout the Member States of the European Union, of two possible connecting factors that have equally been recognized in the EC Treaty, this paper aims at analysing and systematizing the current understanding of the concept of “corporate mobility” on the basis of European legislation and the case law of the European Court of Justice. Such analysis shows in the very first place that a lot of confusion still exists about the various applications of the right for a company to be mobile throughout the European Community. We have therefore rigorously set out all possible scenarios. This, in turn, leads to the conclusion that the case law of the European Court of Justice only covers very few of these scenarios, that it does so in a much more consistent manner than is generally perceived, and that it continues to scrupulously respect the connecting factors accepted in the EC Treaty, as they are embedded in the national law of the individual Member States. On the one hand, the Court rigorously accepts the expansionism of the incorporation doctrine states; on the other hand, the Court also respects the more conservative cautiousness of the real seat doctrine states. It is therefore not predictable how the Court will rule if other scenarios are submitted to it, since its position will largely be influenced by the national law involved. In fact, this clearly demonstrates the void in European legislation: apart from a few – recently introduced – regulations with regard to corporate mobility that cover one specific situation, i.e. a cross-border merger of an SE or of any other corporate form that is allowed by its own corporate law to merge cross-border, the Commission does not seem to have a clear view where it wants to end up with corporate mobility. Two options seem possible: either the European Union evolves towards the interstate competition model that already exists in the United States; or a choice is made for one single connecting factor and its consequences. In both cases, further harmonization in the field of company law as well as in neighbouring fields, e.g. tax and insolvency law, would considerably facilitate the process. 1 Professor, KULeuven; Attorney Brussels Bar (Eubelius). 2 Teaching assistant, KULeuven; Attorney Brussels Bar (Eubelius). – 288 – Table of contents 1. Introduction 288 2. Moving companies and corporate activities across Europe: Techniques 300 2.1. The European Company 300 2.2. Cross-border mergers 302 2.3. Cross-border transfer of seat / freedom of establishment 306 2.4. Other cross-border reorganizations 313 3. Some concluding remarks – Where do we go from here? 315 1. Introduction3 1. Where it all starts: the EC Treaty. Pursuant to Article 43 of the Treaty establishing the European Community, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State are prohibited (the “right of primary establishment”). This prohibition also applies to restrictions on setting up agencies, branches or subsidiaries by nationals of a Member State established in the territory of any Member State (the “right of secondary establishment”). Article 43, 2nd section further provides that the freedom of establishment also includes the right to set up and manage companies or firms4 under the same conditions laid down for its own nationals by the law of the country where such establishment is effected (non-discrimination), and subject to Articles 5660 of the EC Treaty regarding the movement of capital. Such companies or firms should be treated in the same way as natural persons who are nationals of Member States if they are (i) formed in accordance with the law of a Member State and (ii) have their registered office, central administration or principal place of business within the European Community (Article 48, 1st section of the EC Treaty). By virtue of such equal treatment, companies should in principle also be allowed, with a view to taking up and pursuing activities as self-employed persons, to move to any other Member State, but in accordance 3 This text is a slightly revised version of the draft text we presented at the Conference on 9 January 2009. It has been adapted only to take into account certain comments, remarks or criticisms expressed by the Chairman, the Respondent and the participants in the “Cross Border Mobility” workshop , as well...