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REGULATORY COMPETITION IN PARTNERSHIP LAW

Published online by Cambridge University Press:  21 October 2009

Mathias M Siems
Affiliation:
Professor of Law, Norwich Law School University of East Anglia and Research Associate, Centre for Business Research, University of Cambridge.

Abstract

Regulatory competition in company law has been extensively debated in the last few decades, but it has rarely been discussed whether there could also be regulatory competition in partnership law. This article fills this gap. It addresses the partnership law of the US, the UK, Germany, and France, and presents empirical data on the different types of partnerships and companies established in these jurisdictions. The main focus is on the use of a limited liability partnership (LLP) outside its country of origin. It is also considered whether some regulatory competition can take place in the law of limited partnerships.

Type
Article
Copyright
Copyright © 2009 British Institute of International and Comparative Law

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References

1 See, eg Bebchuk, L A, Cohen, A and Ferrell, A, ‘Does the Evidence Favor State Competition in Corporate Law?’ (2002) 90 California Law Review 1775CrossRefGoogle Scholar; R Romano, The Genius of American Corporate Law (AEI Press, Washington, 1993); see also III C 3 below.

2 For the case law of the ECJ see III C 1 a below.

3 See Becht, M, Mayer, C and Wagner, H F, ‘Where Do Firms Incorporate?, Deregulation and the Cost of Entry’ (2008) 14 Journal of Corporate Finance 241CrossRefGoogle Scholar.

4 See eg Armour, J, ‘Who Should Make Corporate Law? EC Legislation versus Regulatory Competition’ (2005) 58 CLP 369Google Scholar; Gelter, M, ‘The Structure of Regulatory Competition in European Corporate Law’ (2005) 5 Journal of Corporate Law Studies 247CrossRefGoogle Scholar; Siems, M, ‘Convergence, Competition, Centros and Conflicts of Law: European Company Law in the 21st Century’ (2002) 27 European Law Review 47Google Scholar.

5 There is some literature dealing with the specific question of whether the British LLP may be used by German law firms; see eg M Siems, ‘Tschüss Deutschland nun auch im Personengesellschaftsrecht?—Deutsche und französische Rechtsanwaltskanzleien als LLPs’ (2008) Zeitschrift für Vergleichende Rechtswissenschaft 107 60–78; H Schnittker, Gesellschafts-und steuerrechtliche Behandlung einer englischen Limited Liability Partnership mit Verwaltungssitz in Deutschland (Schmidt, Köln, 2006).

6 See II C 3, III B 1 below.

9 See William Callison, J, ‘Federalism, Regulatory Competition, and the Limited Liability Movement: The Coyote Howled and the Herd Stampeded’ (2001) 26 Journal of Corporation Law 951, 974Google Scholar.

10 RUPA s 201(a).

11 But see Internal Revenue Code § 7704 (exception for publicly traded limited partnerships).

12 RUPA ss 306, 307.

13 ULPA s 201.

14 Ribstein, LE, ‘The Evolving Partnership’ (2001) 26 Journal of Corporation Law 819, 843Google Scholar.

15 Delaware Revised Uniform Partnership Act § 17–303.

16 On the history see eg Hamilton, R WProfessional Partnerships in the United States’ (2001) 26 Journal of Corporation Law 1045, 1056–1058Google Scholar.

17 See eg Bishop, C G, ‘The Limited Liability Partnership Amendments to the Uniform Partnership Act (1994)’ (1997) 53 Business Lawyer 101Google Scholar.

18 RUPA s 201(b).

19 RUPA s 1003(c).

20 Rutledge, TE, ‘To Boldly Go Where You Have Not Been Told You May Go: LLCs, LLPs, and LLLPs in Interstate Transactions’ (2006) 58 Baylor Law Review 205, 227Google Scholar (New York, California, Nevada and Oregon).

21 See C R Goforth, ‘An Overview of Organizational and Ownership Options Available to Agricultural Enterprises, Part I’, (National AgLaw Center Publications, 2002), available at http://www.nationalaglawcenter.org/assets/articles/goforth_ownership1.pdf at 38.

22 Goforth ibid; M Hallweger, ‘Limited Liability Partnership—Eine Gesellschaftsform für USAmerikanische Anwaltszusammenschlüsse und ihre Haftungsfragen Protection’ [1998] Neue Zeitschrift für Gesellschaftsrecht (NZG) 531, 534.

23 See eg Ribstein (n 14) 838; Rutledge, T E, ‘Limited Liability (or Not): Reflections on the Holy Grail’ (2006) 51 South Dakota Law Review 417, 423–424Google Scholar.

24 RUPA 1996 s 306(c).

25 See eg Rutledge (n 23) 435–436, 447; Hallweger (n 22) 536.

26 See Rutledge (n 23) 443–444.

27 See R R Keatinge, ‘Are Professional Partnerships Really Partnerships? LLPs, LLCs and PCs—Vicarious Liability Protections and Limitations’ 60 Consumer Finance Law Quarterly Report 518; Rutledge (n 23) 447.

28 See Callison (n 9) 953.

29 ULPA s 404(c).

30 For details see Internal Revenue Code s 1361.

31 On the history of the LLC see eg Hamilton (n 16) 1058–1060.

32 See also http://www.nccusl.org/update/uniformact_why/uniformacts_why-ullca.asp for the 2006 reform of the ULLCA.

33 Rev Proc 88-44, 1988-2 CB 634; Rev Rul 88-76, 1988-2 CB 360.

34 See II B above.

35 ULLCA s 304(a).

36 See eg Saab Fortney, S, ‘Seeking Shelter in the Minefield of Unintended Consequences—The Traps of Limited Liability Law Firms’ (1997) 54 Washington and Lee Law Review 717, 728Google Scholar.

37 See UCCLA s 304 (Comment).

38 See Hamilton (n 16) 1048–1049.

39 See Hillman, R W, ‘Organizational Choices of Professional Service Firms: An Empirical Study’ (2003) 58 Business Lawyer 1387, 1392–1393Google Scholar.

40 See Rutledge (n 20) 217; Hamilton (n 16) 1051–52.

41 See Rutledge (n 20) 227.

42 For the distinction between vertical and horizontal competition see Ribstein, L E, ‘The Evolving Partnership’ (2001) 26 Journal of Corporation Law 819Google Scholar.

43 Source: International Association of Commercial Administrators (IACA), Annual Report of the Jurisdictions, available at http://www.iaca.org/downloads/AnnualReports/2007_IACA_AR.pdf. See also JC Dammann and M Schündeln, ‘Where are Limited Liability Companies Formed? An Empirical Analysis’, University of Texas Law, Law and Economics Research Paper No 126 (2008), available at http://ssrn.com/abstract=1126257. Note that in New York and Texas the legal form of the LLP is not available.

44 Hillman (n 39) 1399.

45 J Romley and E L Talley ‘Uncorporated Professionals’ USC Law and Economics Research Paper No 04-22 (2004), available at http://ssrn.com/abstract=587982.

46 L E Ribstein and R R Keatinge, Ribstein and Keatinge on Limited Liability Companies (2nd edn, Thomson/West, St Paul, 2005) §2:1.

47 Hamilton (n 16) 1053–1054.

48 Ribstein (n 42) 833.

49 A R Bromberg and L E Ribstein, Limited Liability Partnership, The Revised Uniform Partnership Act and the Uniform Limited Partnership Act (2001) (Apen, Austin, 2008) § 1.04(c),(d).

50 See II A and B above.

51 See II C 1 below.

52 Hamilton (n 16) 1054.

53 For these requirements see M Siems, Convergence in Shareholder Law (CUP, Cambridge, 2008) 297–335.

54 See generally Siems (n 53) 299; Ribstein, L E and O'Hara, E A, ‘Corporations and the Market for Law’ [2008] University of Illinois Law Review 661, 716–721Google Scholar (for the constitutional protection of the internal affairs doctrine).

55 See II A above.

56 See Ribstein and O'Hara (n 54) 664 and 702; Rutledge (n 20) 221.

57 ULPA s 901(a); RUPA s 1101(a).

58 ULPA s 901(c); RUPA s 1101(c).

59 See II A above.

60 ULPA s 902

61 RUPA s 1102. For differences between states see Hallweger (n 22) 535.

62 ULPA s 901(b); RUPA s 1101(b).

63 ULPA s 907(c),(d); RUPA s 1103(b),(c).

64 See http://corp.delaware.gov/Non-DE %20LLP%20to% 20DE%20LLP.pdf. For the conversion from a Delaware LLP to a non-Delaware entity see http://corp.delaware.gov/DE%20LLP%20to%20Non-DE %20Entity.pdf.

65 See Ribstein (n 42) 834.

66 See Ribstein and O'Hara (n 54) 695; Bromberg and Ribstein (n 49) § 7.04(b).

67 Rutledge, (n 20) (2006).

68 See Heine, K and Kerber, W, ‘European Corporate Laws, Regulatory Competition and Path Dependence’ (2002) 13 European Journal of Law and Economics 47, 51CrossRefGoogle Scholar; Siems (n 53) 303.

69 See Bebchuk, L A and Cohen, A, ‘Firms’ Decisions Where to Incorporate’ (2003) 46 Journal of Law and Economics 383, 391CrossRefGoogle Scholar.

70 Ribstein and O'Hara (n 54) 703.

71 ibid.

72 ibid 704.

73 Dammann and Schündeln (n 43).

74 Sources: IACA (n 43) (for the number of partnerships); http://www.census.gov/ (for the population data) Note that the legal form of the LLLP is not available in California, Florida, Illinois, New York, and Texas.

75 See Ribstein and O'Hara (n 54) 705; Goodgame, J, ‘Master Limited Partnership Governance’ (2005) 60 Business Lawyer 471, 485–486Google Scholar.

76 DRULPA, § 17-1101(c).

77 See II.A above.

78 For corporate law see Romano (n 1); Siems (n 53) 319.

79 See II.A above.

80 See II.B above.

81 See II.A above.

82 See Illinois Partnership Act 205/15(b) (as amended in 2002).

83 Sources: IACA (n 43) (for the data on partnerships); http://www.census.gov/ (for the population data); Sandra K Miller and James J Tucker III, Limit Practice Liability, September, 2005, available at https://www.aicpa.org/PUBS/jofa//sep2005/miller.doc (for the information about partial and full shield states).

84 The results of Student's t-test are t: 1.341; p: 0.187 (with Texas); t: 1.213; p: 0.232 (without Texas). This means that there is a probability of 18.7 per cent (with Texas) and 23.2 per cent.

85 Bebchuk, L A and Hamdani, A, ‘Vigorous Race or Leisurely Walk: Reconsidering the Competition over Corporate Charters’ (2002) 112 Yale Law Journal 553CrossRefGoogle Scholar.

86 Ribstein (n 42) 833.

87 See Goforth, C R, ‘The Rise of the Limited Liability Company: Evidence of a Race Between the States, But Heading Where?’ (1995) 45 Syracuse Law Review 1193Google Scholar; Ribstein (n 42) 833.

88 See Kobayashi, B H and Ribstein, L E, ‘Evolution and Spontaneous Uniformity: Evidence from the Evolution of the Limited Liability Company’ (1996) 34 Economic Inquiry 464CrossRefGoogle Scholar.

89 See Ribstein and Ohara (n 54) 704.

90 For this rationale see Ribstein, L E, ‘Limited Liability and Theories of the Corporation’ (1991) 50 Modern Law Review 80, 101Google Scholar. For further references see J A McCahery ‘Introduction’ in J A McCahery, T Raaijmakers, and E P M Vermeulen, The Governance of Close Corporations and Partnerships—US and European Perspectives (OUP, Oxford, 2004) 4–5.

91 For the LLP in Texas see II A above.

92 See D J Weidner, ‘Pitfalls in Partnership Law Reform: Some US Experience’ in McCahery et al (n 89) 359.

93 Ribstein (n 42) 836, 853. See also P W Huber, Liability: The Legal Revolution and Its Consequences (Basic Books, New York, 1988).

94 DeMott, D A, ‘Transatlantic Perspectives on Partnership Law: Risk and Instability’ (2001) 26 Journal of Corporation Law 879Google Scholar (however, differences in the default rules on dissolution of a partnership).

95 Limited Partnerships Act 1907 art 8. See also http://www.companieshouse.gov.uk/index.shtml.

96 Limited Partnerships Act 1907 art 5.

97 Partnership Act 1890 s 4(2).

98 M Blackett-Ord, Partnership Law (Tottel 1997) 404.

99 DTI, Reform of Partnership Law: The Ecnomic Impact—A Consultation Document, April 2004, paras 4.2 and 4.3.

100 DTI (n 98) paras 4.3 and 4.4; McCahery, JA and Vermeulen, EPM, ‘Limited Partnership Reform in the United Kingdom: A Competitive, Venture Capital Oriented Business Form’ (2004) 5 European Business Organization Law Review 61CrossRefGoogle Scholar.

102 The Law Commission and The Scottish Law Commission, Partnership Law, Reports Law Com No 283 and Scot Law Com No 192, 2003 (515 pages), available at http://www.lawcom.gov.uk/docs/lc283-2.pdf. See also G Morse, ‘Partnerships for the 21st Century?—Limited Liability Partnerships and Partnership Law Reform in the United Kingdom’ [2002] Singapore Journal of Legal Studies 455.

104 DTI Summary of Responses to the Consultation on Reform of Partnership Law: The Economic Impact, July 2006, para 2.13; McCahery and Vermeulen (n 99) 79.

105 French Code Civil art 1857; German Civil Code (BGB) § 714.

106 French Code Civil art 1858.

107 French Code Civil art 1842.

108 BGHZ 146, 34. For a comment see O Maaß and M Siems, ‘Die Rechtsfähigkeit der Gesellschaft bürgerlichen Rechts in Deutschland—Ein Vorbild für Österreich?’ [2002] Wirtschaftsrechtliche Blätter (wbl) 2002, 149 (also dealing with Austrian law).

109 Loi no 66-879 du 29 novembre 1966 relative aux sociétés civiles professionnelles.

110 Loi no 66-879 arts 11, 13, 14.

111 French Code de Commerce art L 221-1(2); German Commercial Code (HGB) §§ 124, 128.

112 French Code de Commerce art L. 222-(2); German Commercial Code (HGB) §§ 161(1), 171.

113 French Code de Commerce art L 210-6; German Commercial Code (HGB) §§ 124, 161(2).

114 Generally see J Heenen, ‘Partnerships and Other Personal Associations for Profit, in International Encyclopedia of Comparative Law (Mohr, Tübingen, 1975) paras 1–167 (but also para 1–172: no authority to represent partnership); For Germany see also German Commercial Code (HGB) § 163. For the UK see Limited Partnerships Act 1908 art 5.

115 McCahery and Vermeulen (n 99) 76.

116 McCahery and Vermeulen (n 99) 71–72.

117 See J Armour ‘Law, Innovation and Finance: A Review’ in J A McCahery and L Renneeboog (eds), Venture Capital Contracting and the Valuation of Hi-Tech Firms (OUP, Oxford, 2003) 133–161, who also refers to the role of insolvency and labour law for venture capital investment.

118 On the US see III A above, on Jersey see III C 3 below.

119 Introduced by Limited Liability Partnerships Act 2002.

120 J Whittaker and J Machell, The Law of Limited Liability Partnerships (Jordans, Bristol, 2004) para 17.9.

121 Limited Liability Partnerships Act 2000 ss 2, 3.

122 Limited Liability Partnerships Act 2000 s 1.

123 Cabvision Ltd v Feetum & Marsden (Feetum v Levy) [2005] 1 WLR 2576, [2005] EWCA Civ 1601; Tower Taxi Technology LLP v Marsden & ors [2005] EWHC 1084, [2005] EWCA Civ 1503.

124 See eg Whittaker and Machell (n 119) paras 15.5–15.14.

125 See S Young, Limited Liability Partnerships Handbook (Tottel, Edinburgh, 2007) para 20.5.

126 Limited Liability Partnerships Regulation 2001 s 3; Limited Liability Partnerships (Amendments) Regulations 2005.

127 See Freedman, , ‘Limited Liability Partnerships in the United Kingdom—Do They Have a Role for Small Firms?’ (2001) 26 Journal of Corporation Law 897, 912Google Scholar.

128 Limited Liability Partnerships Act 2000 ss 5, 6; Limited Liability Partnerships Regulation 2001 s 7.

129 Limited Liability Partnerships Act 2000 s 7; Finance Act 2001.

130 See Freedman (n 126) 914. See also III B 1 below.

131 See Freedman (n 126) 902–903.

132 For instance, the ‘Big Four’: PwC LLP, KPMG LLP, Deloitte & Touche LLP, Ernst & Young LLP.

134 Estimation based on shorter period.

135 ibid.

136 Gesetz of 25 July 1994, BGBl I 1994, 1744 (PartGG).

137 In PartGG §§ 4(1)(s1), 6(3)(s.2), 7(2)-(4), 8(2)(s2), 9(1), 10(2) there are even explicit references to the OHG law.

138 § 8(2) PartGG as modified by Gesetz of 22 July 1998, BGBl I 1878 (author's translation).

139 Business Guide Niedersachsen, 2007, available at http://www.invest-in-germany.com/uploads/media/BusinessGuide_Niedersachsen.pdf.

140 German Commercial Code (HGB) §§ 230–236.

141 See C J Mesnooh, Law and Business in France (Nijhoff, Boston, 1994) 77.

142 French Code Civil art 1871. See also Heenen (n 113) para 1-1 (participation association has no equivalent in England).

143 For the UK data on limited partnerships and LLPs see n 98 and 132; the UK data on limited and public companies are based on Commission Staff Working Document, Impact assessment on the Directive on the cross-border transfer of registered office, SEC(2007) 1707, Annex I Table A 2. For the German data on KGs, GmbHs, and AGs see n 138; the German data on PartGs are based on T Lenz in W Meilicke (ed), Partnerschaftsgesellschaftsgesetz (2nd edn, Beck, Munich, 2006), § 1 para 13; The French data are based on http://www.insee.fr/fr/themes/tableau.asp?ref_id=NATnon09222&reg_id=0.

144 145,000 of these are GmbH & Co KG, see III A 2, above.

145 GmbHG §5(1). However, the Gesetz zur Modernisierung des GmbH-Rechts und zur Bekämpfung von Missbräuchen (MoMiG) of 23 October 2008, BGBi. I 2008, 2026, has introduced a new type of limited company (‘Unternehmensgesellschaft’), which can be started with a minimal capital of € 1 but which has to allocate one quarter of its annual profits to its capital reserve until the €25,000 level is achieved.

146 Loi no 2003-721 du 1er aoÛt 2003 pour l'initiative économique.

147 The SAS is a simplified form of SA (eg regarding its corporate governance and restrictions on the transfer of shares), aimed at smaller companies.

148 Precisely, it is 1.8 times more than France and 2.1 times more than Germany.

149 See II B above.

150 Freedman (n 126) 903–904 (footnotes omitted).

151 Loi no 90-1258 du 31 décembre 1990 relative à l'exercice sous forme de sociétés des professions libérales soumises à un statut législatif ou réglementaire ou dont le titre est protégé et aux sociétés de participations financières de professions libérales. All legal forms which law firms are allowed to use can be found in Loi no 71-1130 du 31 décembre 1971 portant réforme de certaines professions judiciaires et juridiques, art 7 (as amended).

152 Loi no 90-1258 art 5(1).

153 Loi no 90-1258 art 5(2).

154 Loi no 90-1258 art 16 (author' translation).

155 Loi no 90-1258 art 2.

156 Code de Commerce Art L 223-2 in contrast to Art L 224-2 (€37,000 minimum capital for French joint-stock companies).

157 Source: Observatoire du Conseil National des Barreaux (Janvier 2005) 13.

158 The ‘association’ is just a loose form of collaboration (cf Loi du 1er juillet 1901 relative au contrat d'association); lawyers contract with clients in their own name and remain personally liable.

159 Source: Obserratoire do Conseil National des Barreaux (Octobre 2008) 53, available at http://www.cnb.avocat.fr/OBSERVATOIRE-ACTUACITES_r18.html.

160 BayObLG, NJW 1995, 199.

161 Gesetz of 31 August 1998, BGBl I, 2600 (enacting §§ 59 c ff. BRAO).

162 BRAO, §§ 59 d, e, j.

163 BGH, NJW 2005, 1568.

164 However, according to OLG Hamm (decision of 26 June 2006 Az 15 W 213/05) no approval from the local bar association is necessary.

165 Source: Bundesrechtsanwaltskammer, available at http://www.brak.de. It is not reported how many lawyers have established a partnership under civil law (‘BGB Gesellschaft’).

166 See III.A.2 above.

167 See III.C below.

168 See also J A McCahery, EPM Vermeulen, M Hisatake, and J Saito ‘The New Company Law—What Matters in an Innovative Economy?’ Working Paper 2006, available at http://ssrn.com/abstract=942993 33, 43.

169 See III A 2 above.

170 See eg W Zöllner in Baumbach and Hueck, GmbHG (18th edn, Beck, Munich, 2006), Anhang GmbH-Konzernrecht, para 114.

171 See eg V Triebel and D Silny, ‘Die persönliche Haftung der Gesellschafter einer in Deutschland tätigen englischen Rechtsanwalts-LLP’ (2007) Neue Juristische Wochenschrift (NJW) 1034, 1036.

172 However, in the UK the Legal Services Act 2007, ss 71-111 allows ‘Alternative Business Structures’ (ABS) with external ownership. Presumably it will take until 2011 until these new structures can be authorised (see http://www.sra.org.uk/sra/legal-services-act.page). For a comparative analysis of liberalisations of law firm structures see Commission Staff Working Document, Progress by Member States in reviewing and eliminating restrictions to Competition in the area of Professional Services of 5 September 2005, SEC(2005) 1064, paras 58–64.

173 This is based on the Second Company Law Directive 77/91/EEC of 13 December 1976 (as amended).

174 For instance in Germany according to BGHZ 90, 381.

175 See III.A.2, B.1 above.

176 See II.C above.

177 See III.A above.

178 See Whittaker and Machell (n 119) paras 17.1 and 17.12.

179 As it may be the case in Germany; see I Saenger, ‘Wegzug von Personengesellschaften’ in Dieter Birk (ed), Transaktionen, Vermögen, Pro Bono, Festschrift zum zehnjährigen Bestehen von P+P Pöllath+Partners (Beck, Munich, 2008) 95, 300, 304 (real seat of a partnerships has to be Germany). Note that the Regulation (EC) No 593/2008 of 17 June 2008 on the law applicable to contractual obligations (‘Rome I’) excludes partnership law in art 1(2)(f).

180 Case C-212/97 Centros Lt. v Erhvervs-og Selskabsstyrelsen ECR [1999] I-1459.

181 Case C-208/00 Überseering BV v Nordic Construction Company Baumanagement GmbH ECR [2002] I-9919. However, the country in which the company was incorporated may impose restrictions; Case 81/87 Daily Mail and General Trust [1988] ECR 5483 confirmed in Case C-210/06 Cartesio Oktató és Szolgáltató bt, judgment of 16 December 2008.

182 Case C-167/01 Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd. ECR [2003] I-10155.

183 Case C-411/03 SEVIC Systems AG [2005] ECR I-10805.

184 Case C-210/06 Cartesio Oktató és Szolgáltató bt, judgment of 16 December 2008 (however, there was no violation of the Treaty since the case only concerned restrictions by the country in which the partnership was established; see n 180).

185 Partnership Act 1890 s 4(2).

186 See III.A above.

187 Limited Liability Partnerships Act 2000 s 1.

188 See III.A.1 above.

189 See eg German Civil Code (BGB) § 89; Requirements of Writing (Scotland) Act 1996 ss 2, 3 (partnerships; companies) and ss 4, 5 (local authorities; other bodies corporate). Of course, these entities may often be ‘non-profit-making’ and therefore the freedom of establishment may not protect them.

190 For a similar result see Al Randelzhofer and U Forsthoff in E Grabitz and M Hilf, Kommentar zur Europäischen Union (Beck, Munich, 2001) art 48 EG para 7.

191 By analogy to the case law of the ECJ for companies; see (n 179–n 182).

192 See M Henssler and H-P Mansel, ‘Die Limited Liability Partnership als Organisationsform anwaltlicher Berufsausübung’ (2007) Neue Juristische Wochenschrift (NJW) 1393, 1399.

193 See III.A.2 above.

194 Insolvency Act 1986 s 214 IA 1986. For applicability to the LLP see SR Cross, ‘Limited Liability Partnerships Act 2000: Problems Ahead’ (2003) Journal of Business Law 268, 273.

195 See Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (‘Rome II’) art 4; Triebel and Silny (n 170). For a different view see Henssler and Mansel (n 191) 1395-1387 (UK tort law applicable via dépaçage).

196 That is the case in Germany and (presumably) in other civilian legal systems whose tort law is based on the German Civil Code; for Germany see Siems (n 5) 73.

197 For the similar problem concerning the UK limited company see eg Kersting, C and Philipp Schindler, C, ‘The ECJ's Inspire Art Decision of 30 September 2003 and its Effects on Practice’ (2003) 4 German Law Journal 1277, 1290Google Scholar; Koller, T, ‘The English Limited Company—Ready to Invade Germany’ (2004) 15 International Company and Commercial Law Review 334, 341 fGoogle Scholar.

198 See eg B Grunewald and H Müller, ‘Ausländische Rechtsberatungsgesellschaften in Deutschland’ (2005) Neue Juristische Wochenschrift (NJW) 465, 466.

199 This is discussed, but rejected, in Germany; see Siems (n 5) 73.

200 M P Weller and F Kienle, ‘Die Anwalts-LLP in Deutschland—Anerkennung—Postulationsfähigkeit—Haftung (Teil II)’ [2005] Deutsches Steuerrecht (DStR) 1102, 1104.

201 Case C-208/00 Überseering BV v Nordic Construction Company Baumanagement GmbH ECR [2002] I-9919.

202 SenFin Berlin of 19 January 2007, Internationales SteuerRecht (IStR) 2007 447–448.

203 See P Essers and Gerad TK Meussen, ‘Taxation of Partnerships/Hybrid Entities’ in McCahery et al (n 89) 415.

204 For a list of double-taxation treaties between the UK and other countries see http://www.icaew.com/index.cfm?route=154613.

205 Source: Becht et al (n 3) 248.

206 See III C 1 a above.

207 Becht et al (n 3) 249. The differences-in-differences technique measures whether legal changes in one country (but not the other ones) have had an impact on corporation decisions.

209 See III A 2 above.

210 See III B 1 above.

211 Becht et al (n 3) 242, 245, 255.

212 For instance, http://www.formationshouse.com, http://www.companyregistrations.co.uk and http://www.ukincorp.co.uk offer their services in German, French and other European languages. Other websites who offer the establishment of an LLP appear mainly oriented towards the UK market; see http://www.yorkplace.co.uk; http://www.sdgonline.com; http://www.start.biz; http://www.chalfen.com.

213 Search in http://www.amazon.de (Fachbücher).

214 H Schnittker und S Bank, Die LLP in der Praxis: Gesellschaftsrecht und Steuerrecht der Limited Liability Partnership (Beck Munich 2007); Schnittker (n 5).

215 References in Siems (n 5); Triebel and Silny (n 170).

216 See eg B E Aronson, ‘Elite Law Firm Mergers and Reputational Competition: Is Bigger Really Better?’ (2007) 40 Vanderbilt Journal of Transnational Law 763.

217 Loi no 2003-721 du 1er aoÛt 2003 pour l'initiative économique.

218 Ley 7/2003, de 1 de abril, de la sociedad limitada Nueva Empresa.

220 See JJA Burke, ‘Corporate Governance in Estonia: Intact despite 2007 amendment to Commercial Code’ Baltic Rim Economies Review 4/2007, Expert Article 129.

221 Gesetz zur Modernisierung des GmbH-Rechts und zur Bekämpfung von Missbräuchen (MoMiG), as approved by the German parliament on 26 June 2008.

222 BH, and Lennarts, L, ‘The Reform of Dutch Private Company Law: New Rules for the Protection of Creditors’ (2007) 8 European Business Organization Law Review 567Google Scholar; J A McCahery, E D G Kiersch and L Timmerman, Private Company Law Reform: International & European Perspectives (CUP, Cambridge, 2007).

223 See II.A above.

224 See Morris, P and Stevenson, J, ‘The Jersey Limited Liability Partnership: A New Legal Vehicle for Professional Practice’ (1997) 60 MLR 538CrossRefGoogle Scholar; Payne, J, ‘Limiting the Liability of Professional Partnerships: In Search of this Holy Grail’ (1997) 18 Company Lawyer 81, 85–87Google Scholar.

225 See Cross (n 193) 270; McCahery et al (n 167) 35.

226 See McCahery et al (n 167).

228 See Consultation paper, available at http://www.gov.je/StatesGreffe/MinisterialDecision/EconomicDevelopment/2008/mde20080050.htm. This led to the Limited Partnerships (Amendment) (Jersey) Law 2009 L.6/2009.

229 See III.C.1. a above.

230 See III.A.1. above.

231 See II.A. C.3 above.

232 Morris and Stevenson (n 222) 542.

233 Freedman (n 126) 898.

234 McCahery et al (n 167) 33.

235 See III.A.1 above.

236 See in particular Romano (n 1) 14 f.

237 Justice Brandeis in Liggett v Lee, 288 US 517, 559.

238 Cary, W.L, ‘Federalism and Corporate Law: Reflections upon Delaware’ (1994) 83 Yale Law Journal 663CrossRefGoogle Scholar. For further references see (n 1).

239 See eg J Armour, ‘Legal Capital: an Outdated Concept’ (2006) 7 European Business Organization Law Review 5; E Ferran, ‘The Place for Creditor Protection on the Agenda for Modernisation of Company Law in the European Union’ [2006] European Company and Financial Law Review 178.