Cross-border mobility of European Corporations
Theodora Michoudi
Cross-border mobility of European Corporations
Theodora Michoudi, 10393463
Master Thesis European Union Law
Supervisor: Mr. Jaron van Bekkum
University of Amsterdam
July 2013
TABLE OF CONTENTS
Introduction……………………………………………………………………………4
1. The freedom of establishment……………………………………………………..6
1.1. Protection under the TFEU; scope…………………………………………….7
1.2. The concept of ‘establishment’………………………………………………..8
2. Corporate mobility and the EU……………………………………………………9
2.1. Characteristics of a business corporation……………………………………...9
2.2. The ‘nationality’ of a company………………………………………………10
2.3. The dichotomy between law theories………………………………………...11
2.3.1. The incorporation theory……………………………………………….11
2.3.2. The real seat theory…………………………………………………….13
2.4. The transfer of seat…………………………………………………………...14
2.4.1. Transfer of registered office……………………………………………15
2.4.2. Transfer of administrative seat ………………………………………...16
3. Corporate mobility and the E.C.J………………………………………………...16
3.1. Daily Mail…………………………………………………………………….17
3.2. Centros……………………………………………………………………….18
3.3. Überseering ………………………………………………………………….19
3.4. Inspire Art…………………………………………………………………….20
3.4. Cartesio .……………………………………………………………………..21
3.5. Vale…………………………………………………………………………...22
4. Eroding restrictions on corporate mobility……………………………………….24
4.1. Protection under Secondary European Legislation..........................................24
4.2. What is to be done? ........................................................................................27
Conclusion …………………………………………………………………………...31
Bibliography………………………………………………………………………….32
Introduction
The European Union is premised on the Internal Market, an area without frontiers
where the free movement of goods, persons, services and capital is ensured.
According to the president of the European Commission José Manuel Barroso: ‘The
Single Market has been, and remains the cornerstone of Europe’s integration and
sustainable growth.’1 That is to say, preserving the Internal Market is a key strategic
objective for the European Union. One significant way of achieving this objective is
through the freedom of establishment.
The Treaty on the Functioning of the European Union (hereinafter TFEU) provisions
on the right of establishment expressly foresee equal treatment of companies and
individuals. As laid down in article 49 TFEU2, restrictions on the freedom of
establishment of nationals of a Member State in the territory of another Member State
are prohibited. Following article 54 TFEU, companies or firms formed in accordance
with the law of a Member State shall be treated in the same way as natural persons
who are nationals of Member States.
However, the heterogeneity of European Company Laws and the existence of two
different corporate law doctrines pose a hindrance to the free movement of
companies. As a result, a company may not be able to transfer its registered office or
its administrative seat without having to dissolve first. According to the incorporation
law doctrine, the country of incorporation and the main place of business activity do
not have to coincide, meaning that a company can freely change its main place of
business. On the contrary, the real seat doctrine demands the main place of real
activity and the corporate law to coincide. Thus, legal entities are prevented from
transferring their seat and pursuing economic activity in countries following the real
seat theory because they need to wind-up first and such dissolution may have serious
implications.
Although the TFEU warrants equal treatment of companies and individuals and
corporate mobility is prima facie protected under the freedom of establishment, the
1
Mario Monti, “A New Strategy for the Single Market”, Mission letter from the President of the
European Commission, José Manuel Barroso to Mario Monti
<http://ec.europa.eu/bepa/pdf/monti_report_final_10_05_2010_en.pdf>,visited 28.03.2013
2
Consolidated version of the Treaty on the Functioning of the European Union, Lisbon, 13.12.2007,
entered into force 1.12.2009, ECR C 83
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existence of the real seat theory restricts the possibilities of companies to move freely
throughout the E.U. The European Court of Justice has tried to erode some
restrictions but failed to clarify important issues on corporate mobility.
In this thesis, I shall analyse the current EU approach to company mobility and
examine if Companies’ movement within the European Market is really ‘free’. In
other words, the question I shall address is to what extent a company can transfer its
registered office or its administrative seat without having to change its legal regime.
In section 1, I will analyse freedom of establishment. Section 2 considers the current
European framework regarding corporate mobility, focusing on the transfer of seat. In
section 3, I will examine important case law of the European Court of Justice in the
specific area. Finally, the fourth section will describe the efforts made to limit existing
restrictions and what could possibly be done to facilitate corporate mobility.
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1. The freedom of establishment
The ultimate objective of the European Union is the establishment of an internal
market, an area without internal frontiers in which persons, goods, services and
capital can move freely. Since it was created in 1993 (under the leadership of Jacques
Delors), borders disappeared and European citizens were enabled to freely live, work,
study, do business in another Member State and benefit from a wide choice of goods
and services.3 The internal market is essential for the sustainable development of
European Union, the economic growth and a competitive social market economy that
aims at employment and social progress.4 The European Union is trying to dismantle
barriers in the internal market in order to make a step towards its main objective:
European integration.
The notion behind European integration is the maintenance of peace and stability.
Jean Monnet’s vision for the European Union was that countries that are dependent on
each other and trade peacefully are less likely to go to war. 5 ‘The stroke of genius of
the European Union’s founding fathers was to create this political project on an
economic basis. This makes sure war becomes impossible, by creating an
interdependence of facts and more precisely the mechanisms of an integrated
market.’6 In this vein, at present, the existence of a functional internal market could
help the Member States of the European Union to face the current economic crisis in
peace.
One important way of attaining this objective (a functional internal market) is through
the freedom of establishment.
3
European Commission, ’20 years of the European Single Market’, [2012], European Union, available:
http://www.digitalplan.gov.gr/resource-api/dipla/contentObject/Single-Market-Achievementsweb_en/content
4
Art 3 TEU
5
Catherine Barnard ‘The Substantive Law of the EU: The four freedoms,[2010], Oxford University
Press, 6
6
Speech of the president of the European Commission José Manuel Barroso, available in the
documentary film ‘together for new growth’, available:
http://ec.europa.eu/internal_market/documentary_film/index_en.htm
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1.1. Protection under the T.F.E.U; scope
Regarding individuals, the freedom of establishment enables natural persons who are
self-employed in one Member State to establish themselves in another Member State.7
In particular, it gives them the right of departure, entry and residence, the right of
access to self-employment, the exercise of activities as a self-employed person and
the recognition of professional qualifications acquired in other EU States.8 Although
article 54 TFEU requires companies to be treated in the same way as natural persons
for the purposes of the freedom of establishment ‘this is not strictly possible, given
the differences between natural and legal persons.’9
The right of establishment manifests itself in two ways: primary establishment and
secondary establishment. Primary establishment for natural persons is the right to set
up a permanent establishment in another Member State10 while for companies it is the
right to transfer their administrative seat to another Member State.11 Secondary
establishment for an individual is the right to maintain a second professional base in
another Member State, parallel to his basic establishment. For a company, this is
perceived as the right to exercise its activity in other Member States through a
subsidiary, branch or agency. 12
The TFEU provisions on the freedom of establishment have a major impact on crossborder corporate mobility. These provisions aim to remove obstacles that hinder
companies from moving freely within the European Union. The freedom of
establishment is safeguarded in the TFEU under articles 49 and 54. Following article
49 TFEU13, restrictions on the freedom of establishment of nationals of a Member
State in the territory of another Member State shall be prohibited. Such prohibition
shall also apply to restrictions on the setting up of agencies, branches or subsidiaries
by nationals of any Member State established in the territory of any Member State.
The freedom of establishment includes ‘the right to take up and pursue activities as
7
Supra, note 5, 295.
Supra, note 5, 297-319
9
P. Craig & G. De Burca, ‘EU Law: Text, Cases and Materials’, Oxford University Press [2011], 779
10
Supra, note 5, 298
11
See: ECJ Case C-81/87 Daily Mail [1988], ECJ 5483, para.12
12
See: ECJ Case C0414/06 Lidl Belgium [2008], ECJ I-0000, para.18; Case C-307/97 Saint-Gobain
ZN [1999] ECR I-6161, para.35; Case C-141/99 AMID [2000] ECR I-11619, para.20 and Case C471/04 Keller Holding [2006] ECR I-2107, para.29
13
TFEU, Art.49
8
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self-employed persons and to set up and manage undertakings, in particular
companies or firms within the meaning of the second paragraph of Article 54, under
the conditions laid down for its own nationals by the law of the country where such
establishment is effected, subject to the provisions of the Chapter relating to capital.’14
Article 54 TFEU15 extends the entitlement to freedom of establishment, subject to the
same conditions as those laid down for natural persons who are nationals of Member
States to ‘companies or firms formed in accordance with the law of a Member State
and having their registered office, central administration or principal place of business
within the Union’. It is worth mentioning that the definition of a company is broad as
it includes ‘companies or firms constituted under civil or commercial law, including
cooperative societies, and other legal persons governed by public or private law’ but
excludes legal persons which are non-profit making.
1.3. The concept of ‘establishment’
In order to apply the Treaty provisions which prohibit restrictions on free
establishment, we need to clarify the concept of establishment. The European Court of
Justice in Factortame II set the conditions that must be met in order for establishment
to take place. In particular, the concept of establishment involves ‘the actual pursuit of
an economic activity through a fixed establishment in another Member State for an
indefinite period.’16
The economic activity: The European Court of Justice through its case law has
recognized the importance of EU nationals to participate in the economic life of a
Member State other than their State of origin and to profit therefrom.17
Permanent activity: In order for a situation to fall within the provisions of the chapter
on freedom of establishment, a company must be involved on a stable and continuous
14
TFEU, Art.49 para.2
TFEU, Art.54
16
ECJ Case C-221/89 R. v. Secretary of State for Transport, ex p. Factortame (Factortame II) [1991]
ECJ I-3905, para.20-21
17
see to that effect: Case 2/74 Reyners [1974] ECR 631, para.21; Case C-55/94 Gebhard [1995] ECR
I-4165, para.25; Case C 451/05 ELISA [2007] ECR I-8251, para.63; Case C-348/08 Attanasio [2010]
ECR I-0000, paras.36, 39
15
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basis in the economic life of another Member State.18 In other words, an activity must
be carried out on a permanent basis or for an indefinite period or, in any case, without
a foreseeable limit to its duration.19
Cross-border character: The TFEU provisions on the freedom of establishment cannot
be applied to activities which are confined in all respects within a single Member
State.
20
As the Court put it in Bekaert 'the absence of any element going beyond a
purely national setting in a given case... means, in matters of freedom of
establishment, that the provisions of Community law are not applicable to such a
situation.’21
2. Corporate mobility and the EU
2.1. Characteristics of a business corporation
Although corporate law is different across national jurisdictions, there is a common
structure of business corporations. In particular, the basic legal characteristics of a
business corporation are: legal personality, limited liability, transferable shares,
centralized management under a board structure and shared ownership by contributors
of capital.22 In market economies, business corporations generally adopt a legal form
that includes the above mentioned characteristics (occasionally with small deviations).
The idea behind this common structure is to facilitate economic transactions as well
as the coordination between participants in a corporate enterprise.23
A firm can be characterized as a ‘nexus for contracts’ in the sense that it serves,
fundamentally as the common counterparty in numerous contracts and co-ordinates
the actions of suppliers, employees and customers through exercise of its contractual
rights.24 The concept of legal personality is fundamental in corporate law as it enables
a company to become a legal subject and exercise rights similar to those of a natural
18
ECJ, Case C-70/95 Sodemare [1997] ECR I-3395, para.24
ECJ, Case C-196/87 Steymann [1988] ECR 6159 para.16
20
ECJ,Case C-41/90 Höfner and Elser [1991], ECR I-1979, para.37; Case C-332/90 Steen [1992] ECR
I-341, para.9; and Joined Cases C-29/94 to C-35/94 Aubertin and Others [1995] ECR I-301, para.9
21
Case 204/87 Bekaert [1988] ECR 2029, para.12; Joined Cases C-54/88 Eleonora Nino & others
[1990] ECR 3537 , para.11
22
Reinier Kraakman et al, ‘The Anatomy of Corporate Law: A Comparative and Functional
Approach’, Oxford University Press, [2009], 5
23
Ibid, 2
24
Ibid, 6
19
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person. A legal person (persona ficta) has rights, responsibilities and can be held
liable. One of the core elements of the firm as a ‘nexus for contracts’ is the ‘separate
patrimony’ or ‘entity shielding’. ‘Entity shielding’ refers to the firm’s right of
ownership, as distinguished from the firm’s owners’ right of property. That is to say,
the firm’s assets are distinct from other assets owned by the firm’s owners and
creditors are granted a claim only on the firm’s assets as a security for its debts.25
Although the legal personality is a construction of law, its importance is fundamental
for the exercise of certain rights. In particular, it is important in order to apply the
TFEU provisions on the right of establishment which warrant equal treatment of
natural and legal person for the purposes of this freedom.
2.2. The ‘nationality’ of a company
Notwithstanding the TFEU provisions on the freedom of establishment, companies
often face difficulties when they try to pursue an economic activity in another
Member State. One of the basic reasons is the existence of different national company
laws that refuse to grant legal subjectivity to companies formed under a different legal
system. For instance, when a company transfers its seat, two countries are involved:
the home country and the country to which the company will move. It is accepted that
both countries might have interest to regulate this activity.26 However, for reasons of
legal certainty, it cannot be left to the discretion of the States involved but there
should be specific rules to govern such situations. 27
Every person who holds the nationality of an EU Member State is automatically an
EU citizen. The EU citizenship is additional to and does not replace the national
citizenship.28 Each Member State has the right to lay down the conditions for the
acquisition of the nationality of that State. However, within the Union ‘any
discrimination on grounds of nationality shall be prohibited.’ In other words, States
25
Ibid, 6
Jonathan Rickford,’ Special issue section on the restructuring of companies in Europe’, 15 European
Business Law Review 1232, [2004]
27
Heinz Kußmaul,’ Corporations on the move, the ECJ off track: relocation of a corporation’s
effective place of management in the EU’, 6 European Company Law,[2009], 247
28
TFEU, Art.20
26
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are not allowed to discriminate (directly or indirectly) against nationals based on their
nationality. 29
Nationality is a legal relationship between a natural person and a country, a
connecting factor between a person and a Member State that determines which
national law is applicable. Regarding natural persons, the nationality in most Member
States is conferred by birth and connects the person with the jurisdiction of a Member
State.
On the other hand, the ‘nationality’ of a company is its seat, meaning its registered
office and its administrative seat. According to established case law the freedom of
establishment includes the right of companies formed in accordance with the law of a
Member State and having their registered office, central administration or principal
place of business within the Union, to pursue their activities in the Member State
concerned through a branch or agency. With regard to companies, it should be noted
in this context that ‘it is their corporate seat in the above sense that serves as the
connecting factor with the legal system of a particular State, like nationality in the
case of natural persons.’30 Therefore, the corporate seat is the connecting factor
between the legal entity and the legal system of a particular Member State.
However, national European company laws provide different criteria for connecting
the legal entity with the jurisdiction of one State, creating obstacles to the free
movement of companies. Currently, two different doctrinal approaches exist that
determine the ‘nationality’ of a company: The incorporation theory and the real seat
theory.
2.3. The dichotomy between law theories
2.3.1. The incorporation theory
The incorporation theory determines the applicable law by reference to the
jurisdiction of incorporation. That is to say, the decisive connecting factor is
29
See ECJ, Case C-212/99 Commission v Italy [2001] ECR I-4923, para. 24, and Case C-224/00
Commission v Italy [2002] ECR I-2965, para.15
30
ECJ, Case 270/83 Commission v France [1986] ECR 273, para.18, and Case C-330/91
Commerzbank [1993] ECR I-4017, para.13
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registered office and where this is located. This theory emerged in the 18th century in
the UK as a way to guarantee that English companies engaged in maritime activities
would remain subject to English law regardless of the place they conducted their
overseas activities.31 Later, it was mostly adopted by States with a liberal approach to
trade32 and currently, States adhering to this principle are the UK, the Netherlands and
several Scandinavian countries.
Under the incorporation theory, firms can freely choose their country of incorporation
irrespective of where their administrative seat is as this theory does not restrict a
company to transfer its administrative seat to another Member State. On condition
that the registered office remains in the State of incorporation, the emigrating
company will continue to be subject to the law of that Member State without having
to change its legal regime. To put it differently, a company’s transfer of
administrative seat does not involve dissolution of the company and subsequent reincorporation as the company will maintain its legal personality. The decisive factor is
whether the company has satisfied the formation legal requirements of the State of
incorporation; if these requirements are met, the company is recognised in all the
other Member States33.
Seen from a European perspective, it is important to examine how an incorporation
State regulates inbound migration, hence, how it treats companies formed in other
Member States. As a general rule, incorporation States recognize the legal personality
of foreign companies but they often ask for additional requirements, making the
foreign company subject to specific legal obligations. These obligations are usually
imposed to protect shareholders, employees and for tax reasons.34 Therefore, although
incorporation States do not require change of the applicable law, they restrict foreign
companies to a certain extend by imposing supplementary obligations.
One of the main advantages of the incorporation doctrine is that it does not hinder the
freedom of establishment. A company can choose the legal system for incorporation
31
António Frada de Sousa, Company’s Cross-border Transfer of Seat in the EU after Cartesio, Jean
Monnet Working Paper [2009], 4 available:
http://centers.law.nyu.edu/jeanmonnet/papers/09/090701.pdf
32
Robert R. Drury, The regulation and recognition of foreign corporations: The ‘’Delaware
syndrome’’ [1998] Cambridge Law Journal, 182
33
Stephan Rammeloo, Corporations in Private International Law: A European Perspective, [2001],
Oxford University Press, 16
34
Supra, Note 31, 5
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and then transfer its administrative seat to another Member State. As a company will
possibly choose the jurisdiction that is more advantageous, most States try to make
their company laws attractive in order for companies to incorporate under their law
and for them to earn revenue through incorporation fees.35 Although the opponents of
this theory argue that the free transfer of seat will lead to a ‘race to the bottom’ and to
a lower protection of stakeholders36, there is no doubt that it promotes legal certainty37
and migration of companies. Companies exercise the right of establishment without
losing their legal identity and foreign companies are recognised.
2.3.2. The real seat theory
The real seat theory determines the applicable national legal order by reference to the
State where the company carries out its real activity. That is to say, the decisive
connecting factor is the administrative seat (real seat) of the company that should
coincide with the State of incorporation. This doctrine, which dates back to the 19th
century, was basically developed in Germany and France and ‘reflects the territorialist
principle according to which sovereign States have absolute control over their
territories.’38
The main idea behind the real seat doctrine is that the country where a company
conducts its activities is the one mostly affected by these activities and thus, it should
regulate the internal affairs of the company.39
However, the demand for the
administrative seat and the place of incorporation to coincide restricts the corporate
mobility within the EU. First of all, a company incorporated in a real seat State cannot
move its administrative seat to another Member State without dissolution of its legal
personality and ex novo re-incorporation.40 This happens because when a company
transfers its administrative seat, it is no longer subject to the law of the State in which
it was incorporated.
35
Supra, note 22, 26
S. Deakin, ‘Legal Diversity and Regulatory Competition: which Model for Europe?, 2006, European
Law Journal, p440-454
37
Supra, note 31, 17-18
38
Supra, note 31, 6
39
Werner F. Ebke, ‘The ‘’real seat’’ doctrine in the conflict of corporate laws, [2002], The
international Lawyer, 1027
40
Supra, note 31, 7
36
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Moreover, foreign legal entities that have their administrative seat and registered
office in different Member States are not recognized under this doctrine. In crossborder situations involving a State adherent to the real seat theory, foreign companies
are restricted to the extent that (1) they cannot transfer their administrative seat to the
real seat State without winding up in the home State and reincorporating and (2) they
cannot transfer their registered office to it without transferring their administrative
seat as well.41
It is argued that the real seat doctrine aims to prevent the abuse of a corporate form. In
other words, it prevents companies from avoiding a legal system through
incorporation in a more advantageous jurisdiction and it protects the company’s
stakeholders.42 Nevertheless, it is clear that its existence poses obstacles to the free
movement of companies within the EU as it makes a company’s migration a very
complicated issue. It can be argued that it renders less attractive the exercise of the
freedom of establishment43 and as a result, the far-reaching aim of economic
integration becomes more difficult.
2.4. The transfer of seat
The discrepancy between the incorporation theory and the real seat theory poses
substantial hindrances when it comes to the migration of companies within the EU. In
the absence of specific measures that regulate seat transfers within the EU, the gap
between these theories and the non-recognition of foreign companies will continue to
accentuate the problem and render the migration of companies complicated.
When a seat transfer takes place, it is either the registered office or/and the
administrative seat that is transferred. In such situations both conflict and substantive
law of the country of origin and the host country are applied. Conflict rules determine
the applicable substantive law but substantive law determines the continuity of a
company in a sense that it determines whether the transfer is eventually permissible or
41
Christiana Panayi, ‘Corporate Mobility in Private International Law and European Community Law:
Debunking Some Myths’, Yearbook of European Law, Vol 28, [2009], Oxford University Press, 9-12,
available: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1437555
42
Werner F. Ebke, ‘The European Conflict-of-Corporate Laws Revolution: Uberseering, Inspire Art
and Beyond’ [2005], 16 European Business Law Review, 13
43
See Case C-19/92 Kraus [1993] ECR I-1663, para.32, and Case C-299/02 Commission v
Netherlands [2004] ECR I-0000, para.15
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not.44 A company might want to transfer either its registered office or its
administrative seat.
2.4.1. Transfer of registered office
A registered office is the official address of a company in the State in which it was
incorporated, the address where a company receives and sends its official
correspondence. It is often called statutory seat, although the definition is not exactly
the same as the statutory seat basically refers to the place declared as the company’s
seat it its statute.45
The cross border transfer of the registered office from a country adherent to the
incorporation theory would mean that the connecting factor ceased to exist and would
result in a change of the applicable company law. Therefore, the company would have
to dissolve first in the home country and re-incorporate in the host country. Regarding
immigrating companies, if the host country is an incorporation country, it will also
require re-incorporation of the company which will result in a change of the
applicable law. 46
The transfer of registered office from a country following the real seat theory would
not –theoretically- be an issue since the connecting factor (the administrative seat) is
maintained. Nevertheless, ‘as registration connects the company with the laws of the
State in which it is registered, once the registered office is transferred, the laws of that
State become unenforceable.’47 Therefore, many States require the registered office
and the administrative seat to coincide. Practically, the transfer of the administrative
seat is also required by the host State in order to recognize the foreign company.
Consequently, dissolution of a company seems inevitable because as soon as the
44
Federico M. Mucciarelli, Companies’ emigration and EC Freedom of Establishment, [2007],
available: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1078407
45
Supra, note 31, 3
46
Commission Staff Working Document, Impact assessment on the Directive on the cross-border
transfer of registered office, SEC [2007], 1707, 9, available:
http://ec.europa.eu/internal_market/company/docs/shareholders/ia_transfer_122007_part1_en.pdf
47
Supra, Note 41, 14
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immigrating company will be required to additionally transfer its administrative seat,
the connecting factor will cease to exist.48
2.4.2. Transfer of administrative seat
An administrative seat (often called real seat, head office or central headquarters) is
the location of the company’s centre of administration and control. Put differently, it
is the place where the functions of a company are coordinated.
As a general rule, the transfer of administrative seat is possible from countries
following the incorporation doctrine. Under the incorporation doctrine, the place of
the administrative seat is irrelevant as the connecting factor is the registered office.
Since the registered office remains the same, the applicable law is maintained and
winding-up is not compulsory. However, a host real seat State can restrict the transfer
of administrative seat by imposing certain requirements such as the parallel transfer of
registered office or reincorporation. Thus, it can refuse to recognize a foreign
company unless it reincorporates ex novo.
On the contrary, under the real seat theory, the transfer of administrative seat is either
impossible or restricted by certain conditions.49 Since the connecting factor (the
administrative seat) ceases to exist, a company might have to change its legal regime
and wind-up. The transfer from a real seat State leads to dissolution of legal
personality whereas the transfer to a real seat State leads to non-recognition of the
foreign company in the host State.
3. Corporate mobility and the E.C.J
In the last decades, the ECJ was called to interpret the freedom of establishment and
protect European corporations migrating within the EU. After all, it is within its
power to ‘rule on matters dealing with the Treaty freedoms and set aside rules of
48
49
Supra, Note 46
Ibid
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national law that would be detrimental to those freedoms.’50 There is no doubt that the
ECJ jurisprudence had a major impact on the seat-transfer as through its
interpretation, it basically broadened the scope of freedom of establishment.
3.1. Daily Mail 51
Daily Mail was one of the first cases that dealt with corporate mobility as perceived
under the freedom of establishment. However, in essence, this case deals with taxrelating restrictions.
Daily Mail was an English company that wanted to transfer its administrative seat to
the Netherlands whilst retaining its legal personality. Its ultimate aim was to sell a
significant part of its non-permanent assets and to use the proceeds of that sale to buy
its own shares. The establishment of its administrative seat in the Netherlands was
allowed under English company law but it would render Daily Mail no longer subject
to UK corporation tax.52 Since the company wanted to maintain its ‘legal personality
and its status as a United Kingdom company’, the approval of the Treasury was
required for such a transfer.53 At first, the tax authorities refused to give consent and
after a long period of negotiations, they agreed on condition that Daily Mail would
sell part of the assets before transferring its residence out of the UK.54
Daily Mail initiated proceedings before the ECJ arguing that the freedom of
establishment gave it the right to transfer its administrative seat to another Member
State without prior consent or the right to obtain such consent unconditionally.55 In
other words, it argued that the approval of the Treasury was a requirement that
violated the freedom of establishment. At this point, it should be made clear that there
was no issue of discrimination as under English company law, every company
incorporated in the UK could transfer its administrative seat and preserve its legal
personality after the approval of the Treasury.
50
Eddy Wymeersch, ‘The transfer of the Company’s Seat in European Company Law’, Common
Market Law Review(40), [2003], (661-695), 681
51
ECJ, Case 81/87 Daily Mail [1988] ECR 5483
52
Ibid, paras.6-8
53
Ibid, para.18
54
Ibid, para. 8
55
Ibid, para. 8
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It is noteworthy that the Court dealt with Daily Mail as a conflict of laws case, as
(possibly) it did not feel comfortable to address it as an exit tax case.56 In essence,
since both countries (UK and the Netherlands) were inherent to the incorporation
theory, the transfer of administrative seat would not create any problem. In particular,
the Court emphasized that unlike natural persons, companies are creatures of the law
and ‘they exist only by virtue of the varying national legislation which determines
their incorporation and functioning.’57 Therefore, the question whether the seat of a
company incorporated under national law may be transferred from one Member State
to another is a problem which is not resolved by the rules concerning the right of
establishment.58 In this vein, the Court held that the right of establishment is not
applicable when it comes to the transfer of seat.
3.2. Centros 59
Centros was a private company owned by two Danish nationals, who seeking to
circumvent the Danish minimum capital requirement rules they registered their
company in England. Since they lacked any intention to conduct operations in the
UK, they tried to establish a branch in Denmark. However, the Danish Chamber of
Commerce refused to register the branch on the ground that Centros was actually
attempting to set up a primary establishment in Denmark and it did not fulfil the
minimum capital requirement. Centros argued that its refusal is contrary to the
freedom of establishment. It is worth mentioning that the case only dealt with the
secondary establishment and thus, establishment of an English private company’s
branch in Denmark.
Centros is a landmark case with major implications on the migration of companies
within the EU as the Court gave a very broad interpretation of the freedom of
establishment. In particular, the Court ruled (based on Segers60) that a company
formed in accordance with the law of a Member State in which it has its registered
56
Supra, note 31, 14
Daily Mail, para.19
58
Daily Mail para.23
59
ECJ, Case C-212/97 Centros [1999] ECR I-1459
60
ECJ, Case C-79/85, Segers, [1986], para.16
57
- 18 -
office, is entitled to carry out business in another Member State through a branch
even if it does not pursue any economic activity in the state of incorporation.61
Although the Court recognized that Member States are entitled to take measures in
order to prevent the abuse of provisions of Community law, it concluded that the
fact that ‘a national of a Member State who wishes to set up a company chooses to
form it in the Member State whose rules of company law seem to him the least
restrictive and to set up branches in other Member States cannot, in itself, constitute
an abuse of the right of establishment.’62 As a result, the fact that Centros pursued
its activities only in the Member State where its branch was established (Denmark)
was not sufficient to prove the existence of abuse or fraudulent conduct63 and
therefore, the refusal for registration of the branch was incompatible with the TFEU
provisions. Last but not least, the Court pointed out that the fact that company law
was not completely harmonised in the Community was of little consequence for
interpreting the freedom of establishment.64
3.3. Überseering 65
Überseering was a Dutch company, properly incorporated in the Netherlands (with
only German shareholders) that transferred its administrative seat to Germany. Under
German real seat theory, this necessitated reincorporation of the company in
Germany. Überseering did not follow the formation formalities under German law
and as a result it was denied standing in the German Court on the ground of lack of
legal capacity. It is clear that German law restricted immigrating companies by
requiring the registered office and the administrative seat to coincide in order to
recognise legal capacity. An immigrating company had no other choice but to
reincorporate in Germany in order to be able to bring proceedings there.
The Court of Justice found that the refusal to recognize the company’s legal capacity
and to give standing restricted the freedom of establishment without justification. In
particular, it ruled that the requirement of reincorporation of the same company in
61
Centros, para.17
Centros, paras.24, 27
63
Centros, paras.29-30
64
Centros, para.28
65
ECJ, Case C-208/00 Überseering [2002] ECR I-9919
62
- 19 -
Germany is ‘tantamount to outright negation of freedom of establishment.’66
Although overriding requirements relating to the general interest can justify
restrictions on freedom of establishment, they could not ‘justify denying the legal
capacity and, consequently, the capacity to be a party to legal proceedings of a
company properly incorporated in another Member State in which it has its registered
office.’67
Überseering differs from Daily Mail, where a company wanted to transfer its
administrative seat whilst retaining its legal personality in the State of incorporation.
In Überseering, the crucial issue was the non-recognition of the legal capacity of an
existing company. The Court conferred that every European corporation properly
incorporated in one Member State has the right to transfer its administrative seat to
another Member State and be fully recognized in that State.
3.4. Inspire Art 68
Inspire Art was a private limited liability company incorporated in the UK which
carried all its activities in the Netherlands (the facts of the case are very similar to
Centros). The company, which had only one Dutch citizen as a sole shareholder, did
not intend to conduct business in the UK and decided to establish a branch in the
Netherlands. Although the Dutch law allowed the registration of the branch, it
considered Inspire Art as a ‘formally foreign company’ that had to fulfil additional
requirements. ‘Formally foreign companies’ were subject to certain provisions of
Dutch company law such as, inter alia, the requirement to comply with the minimum
capital rule.
The Court of Justice ruled that the Dutch legislation was incompatible with the
freedom of establishment as the additional obligations for formally foreign companies
had the effect of impeding the exercise of the freedom of establishment. In particular,
based on its ruling in Centros, the Court repeated that the fact that a company was
formed in one Member State only for the purpose of establishing itself in a second
Member State, where its main or indeed entire, business is to be conducted, did not
66
Überseering, para.81
Überseering, paras. 92,93
68
ECJ, Case C-167/01 Inspire Art [2003] ECR I-10155
67
- 20 -
deprive it of the right to invoke the freedom of establishment.69 After all, this inbound
restriction could not be justified on the grounds of public interest.
In Inspire Art, the Luxemburg Court made a step further towards mutual recognition
of companies incorporated in another Member State. However, it is still unclear what
rules travel with the company when it migrates.70 In fact, there seems to be a
distinction between inbound and outbound migration. After Überseering and Inspire
Art, non- recognition of the immigrating company is not allowed on the ground that
the company was incorporated under the law of another Member State. On the
contrary, Daily Mail jurisprudence has remained untouched and the home State
remains free to impose restrictions on emigrating companies.71
3.4. Cartesio 72
Cartesio regarded a Hungarian limited partnership that wanted to transfer its
administrative seat to Italy while retaining its legal personality under Hungarian law.
The registration of the transfer was rejected by the Hungarian Commercial Court
because under Hungarian Law (adherent to real seat theory) the location of
incorporation and the administrative seat had to coincide. That is to say, a company
could transfer its administrative seat only if it was first wound up in Hungary and then
reincorporated under Italian law.
Contrary to the opinion of Advocate General Maduro, the Court found that Hungarian
rules were compatible with the freedom of establishment and in the absence of
uniform European legislation, national law will determine ‘both the connecting factor
required of a company if it is to be regarded as incorporated under the law of that
Member State and, as such, capable of enjoying the right of establishment, and that
required if the company is to be able subsequently to maintain that status.’73
69
Inspire Art, paras. 95,98
Eva Micheler, ‘Recognition of companies incorporated in other EU Member States’, [2003],
International and Comparative Law Quarterly, 52, 521-534, 529
71
See Wolf-Georg Ringe, ‘No Freedom of Emigration for Companies?’ European Business Law
Review, Vol 16, (2005), available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1085544
72
ECJ, Case C-210/06 Cartesio [2008] ECR I-9641
73
Cartesio, paras.109-110
70
- 21 -
In essence, the Court confirmed the reasoning of Daily Mail that ‘companies are
creatures of national law and exist only by virtue of the national legislation which
determines its incorporation and functioning.’74 Hence, it is at the discretion of the
Member State to permit (or not) a company governed by its law and wishing to move
its seat to retain that status.75 At this point, it is worth mentioning that the Advocate
General Maduro had a different opinion and found Hungarian rules in breach of the
freedom of establishment as national rules that allow a company to transfer its
administrative seat ‘only within the national territory clearly treat cross-border
situations less favourably than purely national situations.’76
3.5. Vale 77
Vale was an Italian company that wanted to convert into a Hungarian company and
transfer its registered office from Italy to Hungary. For this reason, it applied to be
deleted from the commercial register in Italy and later it applied for a new entry in the
Hungarian commercial register as the successor of the Italian company. However, the
Hungarian trade register refused the registration on the ground that Hungarian law
does not recognize a cross-border conversion into a Hungarian company. In contrast,
it recognises domestic conversion and thus, only companies incorporated under the
law of Hungary are allowed to convert.
In its judgment delivered on 12 July 2012, the Court ruled that Member States have
the right to define the connecting factor required of a company if it is to be regarded
as incorporated under its national law and this right is not infringed by the obligation
under Article 49 and 54 TFEU to permit a cross-border conversion.78 Hungarian law
precluded the conversion of foreign companies into Hungarian companies and the
Court ruled thereof that by providing ‘only for conversion of companies which
already have their seat in the Member State concerned, that legislation treats
companies differently according to whether the conversion is domestic or of a crossborder nature’ ; this unequal treatment may deter companies which have their seat
74
Cartesio, para.104
Cartesio, para.110
76
Opinion of Advocate General Maduro in Cartesio, para.25
77
ECJ, Case C-378/10, Vale, [2010], ECJ
78
Vale, paras.29-30
75
- 22 -
(registered office or administrative seat) in another Member State from exercising the
freedom of establishment and therefore, it leads to an unjustified restriction of the
right of establishment.79
Moreover, the absence of rules in secondary European Union law cannot justify
differences in treatment depending on whether a domestic or cross-border conversion
is at issue. The existence of these rules cannot be made a precondition for the
implementation of the freedom of establishment.80
Summary
In brief, during the past few decades, the ECJ through its case law broadened the
scope of the freedom of establishment, making though a distinction between
emigrating and immigrating companies. In general, migration is overall unhindered in
the host State but the State of origin (home State) has still the discretion to put
restrictions on the transfer of seat. In Daily Mail and Cartesio, the Court allowed
restrictions on the transfer of administrative seat imposed by the home State of
companies. On the contrary, in Centros, Inspire Art and Überseering (the so called
‘moving in’ cases), the Court stipulated that the State of arrival (host State) cannot
impose obstacles on the transfer of seat.
Although restrictions ‘on the exit of companies from one jurisdiction, entering
another, either remaining a foreign company there or as a company incorporated in
the new jurisdiction, constitute a major obstacle to free movement and the
functioning of the Internal Market’81 the Court did not go that far so as to forbid
them. In contrast, it merely stated the conditions under which such national
restrictions are justified. According to the Court's case-law, national measures liable
to restrict the exercise of fundamental freedoms guaranteed by the Treaty must
fulfil four conditions:(1) they must be applied in a non-discriminatory manner; (2)
they must be justified by imperative requirements in the general interest;(3) they
79
Vale, para.36
Vale, para.38
81
Max Andenas & Frank Wooldridge, ‘European Comparative Company Law’, [2009], Cambridge
University Press, 13
80
- 23 -
must be suitable for securing the attainment of the objective which they pursue; and
(4) they must not go beyond what is necessary in order to attain it.82
Finally, since the Court has not expressed any preference vis-à-vis the traditional
conflict between the incorporation theory and the real seat theory, both connecting
factors co-exist, making situations involving real seat theory countries more
complicated. Cross-border movement is not (yet) fully unhindered and it seems that
transfer of seat without dissolution of legal personality is at least problematic (if not
impossible.)
4. Eroding restrictions on corporate mobility
4.1. Protection under Secondary European Legislation
The European Union can act only within the limits of the competences conferred upon
it by the Member States.83 Following article 50 TFEU, in order to attain the freedom
of establishment, ‘the European Parliament and the Council, acting in accordance
with the ordinary legislative procedure and after consulting the Economic and Social
Committee, shall act by means of directives.’84 That is to say, we should examine
secondary European Legislation in order to assess whether it adequately addresses
restrictions on corporate mobility within the EU. In essence, Secondary European
Legislation includes provisions that enable a company to –indirectly- transfer its
registered office within the Union.85 Regarding the transfer of seat, the initiatives so
far have resulted in the Societas Europaea Regulation (SE)86 and the Cross-Border
Merger Directive.87
The SE Regulation
The rationale behind the SE was similar to that of the harmonisation of European
company laws. The SE would provide a legal form, identical in all Member States,
82
Centros, para.34
TEU, Art.5
84
TFEU, Art.50
85
Christiana Panayi, ‘Corporate Mobility in Private International Law and European Community Law:
Debunking Some Myths’, Yearbook of European Law, Vol 28, [2009], Oxford University Press,
available: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1437555
86
Council Regulation (2001/2157/EC) of 8 October 2001 on the Statute for a European Company (SE),
[2001], OJ L 294/01
87
Directive 2005/56/EC of 26 October 2005 on cross-border mergers of limited liability companies,
[2005]OJ L310
83
- 24 -
and as a result it would ‘facilitate cross-border cooperation and integration of business
in Europe.’88 The initial idea was to create a truly pan-European company as a 28th
company law regime on a supra-national basis.89
A SE is recognised in every Member State as a public limited liability company
formed in accordance with the law of the Member State in which it was registered.90
Under the Regulation, a SE is allowed to transfer its registered office to another
Member State without having to wind up and loose its legal personality. 91 However,
according to article 7 of the SE Regulation the registered office of an SE shall be
located within the Community, in the same Member State as its administrative seat.
Moreover, a Member State may call for the same place of the administrative seat and
the registered office.92 That is to say, a SE cannot transfer its registered office without
transferring its administrative seat as well.
The failure to reach consensus regarding a uniform set of rules governing the SE lead
to the parallel application of the provisions of the Statute and the national company
law of the Member State where the SE was incorporated.93 Although the SE was an
ambitious initiative attempting to provide a solution to the problems associated with
the migration of companies within the Union, it turned out to be unattractive.94 Some
of the basic parameters are the set-up costs, the time-consuming and complex
procedures and the legal uncertainty of the SE formation process.95 For instance, the
minimum capital requirement of 120.000€ is considered very high for small and
medium enterprises. 96
Moreover, the Commission Report acknowledges that the SE poses a number of
practical problems; ‘first, the SE Statute does not result in a uniform SE legal form
88
Jaap Winter, ‘Company Law at the Cross-Roads’, in ‘Reforming Company and Takeover Law in
Europe’ edited by Guido Ferrarini et al, [2004] , Oxford University Press,
89
European Commission, ‘Report of the Reflection Group on the Future of EU Company Law’, 29,
available: http://ec.europa.eu/internal_market/company/docs/modern/reflectiongroup_report_en.pdf
90
SE Regulation, Article 10
91
Ibid art.8(1)
92
Ibid art 7
93
Supra, note 88
94
According to the European Trade Union Institute’s, (ETUI’s) European Company Database, the
number of established SEs by 1 April 2013 was only 1766, http://ecdb.worker-participation.eu/
95
Commission report, The application of Council Regulation 2157/2001 of 8 October 2011 on the
Statute for a European Company (SE), COM(2010) 676, Brussels, 17.11.2010, p6, available: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0676:FIN:EN:PDF
96
Philippe Pelle’ Companies crossing borders within Europe’, Utrecht Law Review, available:
https://www.utrechtlawreview.org/index.php/ulr/article/view/URN%3ANBN%3ANL%3AUI%3A101-101075
- 25 -
across the European Union, but in 27 different types of SEs. Second, the Statute
contains multiple references to national law and uncertainty remains as to the legal
implications of the Statute's directly applicable rules and their interface with national
law. Third, the uneven distribution of SEs across the European Union suggests that
the Statute does not respond sufficiently well to the needs of companies in all 27
Member States.’97 Seen in that light, the SE provided an alternative, indirect way of
transferring the registered office but it was an inadequate solution.
The Cross-Border Merger Directive
The Cross- Border Merger Directive was adopted in 2005 after a long period of
negotiations and constitutes an indirect possibility for private and public limited
liability companies to transfer their registered office from one Member State to
another. Under the Directive, this cross-border transfer is possible if a company sets
up a subsidiary in the Member State where it wants to move its registered office and
then merges the existing company into the subsidiary.98 After the merger, the
registered office is transferred, the initial company continues (indirectly) to exist and
the applicable law is that of the location of the subsidiary.99
However, the procedure is complicated given the fact that it requires the setting up of
a new company (subsidiary) that will subsequently absorb the initial company. This
would imply the costs and the procedural formalities required both for setting up a
company and for carrying out the cross-border merger.
100
For instance, the merger
requires the drawing-up of joint draft terms of merger and their the publication in the
national gazette, a report by the administrative bodies of each of the companies
involved, the approval of the merger by both companies, an expert's report for both
companies involved, the judicial or administrative preventive supervision of the
legality of the merger, and finally the publication of the merger.101 It is clear that the
cross-merger Directive confers the indirect possibility of cross-border transfer of
97
European Union, MEMO/10/592, 19.11.2010, available: http://europa.eu/rapid/pressrelease_MEMO-10-592_en.htm
98
Supra, note 31, 60-62
99
Supra, note 41, 22-24
100
Supra, note 46, 40
101
Ibid, 40
- 26 -
registered office but it is incapable of directly addressing the problem of unhindered
seat transfer within the Union.
4.2. What is to be done?
Obstacles to free movement of companies can have an imperceptible effect on the
internal market as companies might end up being forced to adhere to onerous
obligations. It is particularly vigilant to ensure the unhindered transfer of seat (both of
registered office and administrative seat) and thus, the abolition of obstacles in the
free movement of companies. After all, ‘Member States are required to take all
appropriate measures, whether general or particular, to ensure the fulfilment of the
obligations arising out of the Treaty and to abstain from any measures which could
jeopardize the attainment of the objectives of the Treaty.’102
Unfortunately, the initiatives taken so far did not have the expected results and
currently, the freedom of establishment provided by the TFEU does not restrict a
Member State to pose restrictions on emigrating companies. Therefore, legislative
action at Community level is needed in order to directly address the problem. In this
respect, the implementation of the long awaited 14th Directive on the cross-border
transfer of the registered office might provide a solution to the problem.
The discussion for the 14th Company Law Directive started in the middle of the 90s
but the idea was set aside by the European Commission in December 2007 on the
grounds that alternative solutions were adequate and there was no need for action at
EU level on this issue.103 As the Commissioner for Internal Market and Services
Charlie McCreevy stated ‘the result of the economic analysis of the possible added
value of a directive were inconclusive. Companies already have legal means to
effectuate cross-border transfer.’104 referring to SE Regulation and the Cross-Border
Merger Directive.
102
ECJ, Case C-19/92 Kraus,[1993], ECJ I-1663, para.31
Supra, note 46
104
Speech 07/592 of 3 October 2007 (Speech by Commissioner McCreevy at the
European Parliament’s Legal Affairs Committee, Brussels), available : http://europa.eu/rapid/pressrelease_SPEECH-07-592_en.htm
103
- 27 -
On 2 February 2012 the European Parliament requested the Commission swiftly to
submit a proposal for a Directive on the cross-border transfer of company seats.105
According to the Resolution adopted by the Parliament ‘The directive should allow
companies to exercise their right of establishment by migrating to a host Member
State without losing their legal personality but by being converted into a company
governed by the law of the host Member State without having to be wound up.’106 It is
intriguing that the 14th directive would make it possible for a company to transfer its
registered office from one Member State to another, while retaining its legal
personality. For instance, under the Directive a German GmbH could transfer its
registered office to the UK and transform itself into a UK Ltd. After the transfer of the
registered office, it would no longer be subject to German company law but only to
the UK company law. Until now such an action was either impossible or required the
dissolution of the company in its country of origin before it could be re-incorporated
in the new country.
There are two possible legislative approaches for the 14th company law Directive.
According to the limited approach, the transfer of the registered office can be
accompanied by simultaneous transfer of the administrative seat. In this case, Member
States adherent to real seat principle would be allowed to require companies to
transfer their registered office to their territory together with their administrative seat.
On the contrary, companies moving to a Member State following the incorporation
theory would be allowed to relocate their registered office alone. Consequently, such
an approach ‘will not permit the development of a true market for re-incorporations in
the EU’107 and will render the benefit of the Directive limited.
Under the extensive approach the Directive must enable companies to relocate their
registered office alone from one Member State to another with a change on the
applicable law. Under this approach a Member State could not demand the transfer of
the registered office to be accompanied by the transfer of administrative seat. In this
respect, this approach would be a significant development vis-à-vis real seat
105
European Parliament Resolution of 2 February 2012 with recommendations to the Commission on a
14th company law directive on the cross-border transfer of company seats ,2011/2046(INI), available:
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-20120019&language=EN#BKMD-3
106
Ibid, Recommendation 2
107
Supra, note 31, 56
- 28 -
countries. The European Commission acknowledged the significance of the extensive
approach as follows:
Improving efficiency and the competitive position of existing companies by
providing them with the possibility to choose the corporate legal framework
that best suits their needs, while ensuring that the interests of the stakeholders
are properly protected, contributes to the achievement of the Lisbon
objectives. Making an option to transfer registered offices available to
European businesses would make EU markets more open and enhance
corporate mobility. Opening the borders for companies would also increase
the pressure on EU Member States to make their laws more flexible and
business friendly. This would contribute to the Lisbon aim to simplify and
modernise regulatory environment and cut the red tape.108
Despite the existence of legal means to effectuate a cross-border seat transfer, the
adoption of the 14th Directive (with an extensive approach) is indispensable109 as the
disadvantages of the alternative methods override their advantages. This Community
legal instrument would constitute an impetus to the relocation of companies within the
EU. Since it would regulate the matter in detail, it would –hopefully- put an end to the
never ending story on free movement of companies.
Additionally, the role of the ECJ is vital as it can facilitate corporate mobility through
its interpretation.110 So far, the stance of the ECJ was not decisive enough as the Court
did not want to intervene in national legal orders. Being afraid of overstepping its
competence borders, the Court refrained from declaring that ‘restrictions “on
entering” or “on leaving” national territory are prohibited.’111 Seen in that light, the
Court could preclude obstacles to the free movement caused by both the incorporation
theory and the real seat theory. Without dismissing the real seat theory which entails a
higher risk to restrict a company and without abolishing in total every restriction, it
could make clear that in principal limitations are not allowed unless there is an
exceptionally crucial reason. In this sense, it could set a stricter framework under
108
Supra, note 46, 28
Eddy Wymeersch ,’ Is a Directive on Corporate Mobility Needed?’. European Business
Organization Law Review, 8, [2007], 161-169.
110
Schön, Wolfgang, ‘The Mobility of Companies in Europe and the Organizational Freedom of
Company Founders’, [2006], European Company and Financial Law Review, 3(2), 122-146
111
Opinion of Advocate General Tizzano in SEVIC, para.45
109
- 29 -
which restrictions are allowed. After all, on the basis of the current status of European
Union Law, it is impossible to argue that ‘Member States enjoy an absolute freedom
to determine the life and death of companies constituted under their domestic law,
irrespective of the consequences on the freedom of establishment.’112
112
Opinion of Advocate General Maduro in Cartesio, para.31
- 30 -
Conclusion
This thesis presented the current EU approach to company mobility and examined to
what extent a company can transfer its seat (registered office and administrative seat)
without having to change its legal regime. Employing the traditional legal dogmatic
method, variant EU law sources were described and analysed based on the relevant
legal literature. The freedom of establishment for companies is one of the
fundamental rights enshrined in articles 49 and 54 TFEU and requires the abolition of
barriers to corporate mobility. However, the movement of companies is still mainly
constrained by Member State discretion. Hence, the right of departure cannot always
be guaranteed as the State of origin has still the discretion to impose restrictions on
the transfer of seat. The ECJ has eroded restrictions, basically caused by the real seat
theory which entails a higher risk to impose restrictions, but it has not eliminated
them. In this respect, the adoption of the 14th Company Law Directive is more acute
than ever. The European Union should warrant the abolition of obstacles to freedom
of movement and accordingly enable citizens and businesses to make the most of the
advantages of the Internal Market.
- 31 -
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part1_en.pdf

Council Regulation (2001/2157/EC) of 8 October 2001 on the Statute for a
European Company (SE), [2001], OJ L 294/01

Directive 2005/56/EC of 26 October 2005 on cross-border mergers of limited
liability companies, [2005]OJ L310

European Commission, ’20 years of the European Single Market’, [2012],
European Union, available: http://www.digitalplan.gov.gr/resourceapi/dipla/contentObject/Single-Market-Achievements-web_en/content

European Commission, ‘Report of the Reflection Group on the Future of EU
Company Law’, 29, available:
http://ec.europa.eu/internal_market/company/docs/modern/reflectiongroup_report_en.
pdf

European Parliament Resolution of 2 February 2012 with recommendations to
the Commission on a 14th company law directive on the cross-border transfer
of company seats ,2011/2046(INI), available:
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-20120019&language=EN#BKMD-3

European Trade Union Institute’s, (ETUI’s) European Company Database, the
number of established SEs by 1 April 2013 was only 1766, http://ecdb.workerparticipation.eu/

European Union, MEMO/10/592, 19.11.2010, available:
http://europa.eu/rapid/press-release_MEMO-10-592_en.htm

Opinion of Advocate General Maduro in Cartesio

Opinion of Advocate General Tizzano in SEVIC

Speech of the president of the European Commission José Manuel Barroso,
available in the documentary film ‘together for new growth’, available:
http://ec.europa.eu/internal_market/documentary_film/index_en.htm

Speech /07/592 of 3 October 2007 (Speech by Commissioner McCreevy at the
European Parliament’s Legal Affairs Committee, Brussels), available :
http://europa.eu/rapid/press-release_SPEECH-07-592_en.htm

TFEU, Consolidated version of the Treaty on the Functioning of the European
Union, Lisbon, 13.12.2007, entered into force 1.12.2009, ECR C 83
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Case Law

2/74, Reyners [1974] ECR 631

270/83, Commission v France [1986] ECR 273

C-79/85, Segers, [1986], ECJ

81/87, Daily Mail [1988] ECR 5483

C-196/87, Steymann [1988] ECR 6159

204/87, Bekaert [1988] ECR 2029

Joined Cases C-54/88, Eleonora Nino & others [1990] ECR 3537

C-221/89 R. v. Secretary of State for Transport, ex p. Factortame
(Factortame II) [1991] ECJ I-3905

41/90, Höfner and Elser [1991], ECR I-1979

C-332/90, Steen [1992] ECR

C-330/91, Commerzbank [1993] ECR I-4017

C-19/92, Kraus [1993] ECR I-1663

Joined Cases C-29/94 to C-35/94 Aubertin and Others [1995] ECR I-301

C-55/94, Gebhard [1995] ECR I-4165

C-70/95, Sodemare [1997] ECR I-3395

C-212/97, Centros [1999] ECR I-1459

C-307/97, Saint-Gobain ZN [1999] ECR I-6161

C-141/99, AMID [2000] ECR I-11619

C-212/99, Commission v Italy [2001] ECR I-4923

C-208/00, Überseering [2002] ECR I-9919

C-224/00, Commission v Italy [2002] ECR I-2965

C-167/01, Inspire Art [2003] ECR I-10155

C-299/02, Commission v Netherlands [2004] ECR I-0000

C-471/04, Keller Holding [2006] ECR I-2107

C 451/05, ELISA [2007] ECR I-8251

C-210/06, Cartesio [2008] ECR I-9641

C-0414/06, Lidl Belgium [2008], ECJ I-0000

C-348/08, Attanasio [2010] ECR I-0000

C-378/10, Vale, [2010], ECJ
I-341
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