Following the ECJ's recent case law on EC freedom of establishment (the Centros, Überseering and Inspire Art cases), regulatory competition for corporate law within the European Union takes place at an early stage of the incorporation of new companies. In contrast, as regards the ‘moving out’ of companies from the country of incorporation, the ECJ once considered a tax law restriction against the transfer abroad of a company's administrative seat as compatible with EC freedom of establishment (the Daily Mail case). For years, this decision has been regarded as applicable to all restrictions imposed by countries of incorporation, even the forced liquidation of the ‘emigrating’ company. This paper addresses the question whether EC freedom of establishment really allows Member States to place any limit on the ‘emigration’ of nationally registered companies. It argues that EC freedom of establishment covers the transfer of the administrative seat as well as the transfer of the registered office and, therefore, that the country of incorporation cannot liquidate ‘emigrating’ companies. In addition, it addresses the question whether a new Directive is needed to allow the transfer of a company's registered office and identity-preserving company law changes. It argues that such a Directive is necessary to avoid legal uncertainty and to protect the interests of employees, creditors and minority shareholders, among others, who could be detrimentally affected by the ‘emigration’ of national companies.
* This paper was written during two research periods at the Max Planck Institute for Private and Private International Law of Hamburg, in February and September 2006, and at the Institute for Advanced Legal Studies of the University of London, during July and August 2007. A preliminary version of this work was presented at the seminar La mobilità delle società nell'Unione Europea: profili societari e fiscali, at Bologna University, Ravenna, 8 June 2006.
I would like to thank Mads Andenas, Peter Behrens, Andrea Carinci, Luca Enriques, Stefano Lombardo, Wolfgang Schön and an anonymous referee for many helpful comments on previous versions of this work; Rainer Kulms and Ethan Perry for some relevant language suggestions; and the Max Plank Society for its financial support. All errors are obviously mine.
** Associate Professor of Business Law, Faculty of Economics, University of Modena (Assistant Professor of Business Law, Faculty of Economics, University of Bologna, until October 2007). E-mail: [email protected]