Comparative Company Law
Readings 1: Company Migration
Case Law
CJEU [C-81/87] Daily Mail (outbound)
Daily Mail wanted to move from the UK to the Netherlands but
needed a declaration of consent under UK tax legislation from the
Treasury
Netherlands does not prevent foreign companies from establishing
themselves in the NL
Conclusion: Daily Mail cannot move its headquarters, as the
registered ofice remains in the UK and should comply with the
requirements put out by UK law
CJEU [C-212/97] Centros (inbound)
To establish a company in Denmark, a minimum share capital of
DKK 125,000 (~£12,000) was required to be paid into that
company. This was said to help prevent fraudulent insolvencies
Centros Ltd, a wine exporting company, was established as an
English company, where the minimum share capital is £1, by all
Danish shareholders
Denmark refused Centros’ application to trade in Denmark,
claiming that Centros were trying to circumvent Denmark’s
minimum share capitalisation law registration of a “branch” of
Centros which would trade in Denmark
Conclusion: Whilst Members States may implement measures with
the aim of preventing fraud, Centros’ action did not abuse the right
of freedom of establishment, and Denmark could not adequately
justify the national law in question most importantly, where a
company is lawfully established in one EU MS, the inbound EU MS
cannot prevent trade/on-the-ground establishment
1
, Gebhard-criteria: non-discriminatory, suitable for the objective, not
beyond what is necessary and justifed in the general interest
limited applicability
CJEU [C208-00] Uberseering (inbound)
Uberseering was a BV registered in the Netherlands with an all-
German board, and wanted to exercise standing in a German court
to sue, but this was denied
Conclusion: where a company incorporated in another Member
State exercises its freedom of establishment in another Member
State, that other Member State is required to recognise the
company’s legal capacity where the efective seat of
administration is in the state where legal action is sought, the host
state will have to allow the company exercising its freedom of
establishment to enjoy its legal capacity
CJEU [C-167/01] Inspire Art (inbound)
Inspire Art was a British company seeking to set up a branch in the
Netherlands but the Netherlands wanted to prevent this by
requiring Inspire Art to meet the minimum capital requirement for
limited liability companies
Conclusion: any adjustment to the company law of the host state is
not compatible with European law foreign company should only
be subject to the company law of its state of incorporation (so the
registered ofice)
CJEU [C-411/03] Sevic Systems (cross-border merger - outbound)
German company was prevented to merge with a Luxembourg
company by the German legislature restrictions coming from the
state of origin of the claimant German law only allows mergers
between wholly German companies
Conclusion: companies should be able to merge if national
companies are able to merge and restricting mergers between one
company from the host state and another are contrary to EU law
2
Readings 1: Company Migration
Case Law
CJEU [C-81/87] Daily Mail (outbound)
Daily Mail wanted to move from the UK to the Netherlands but
needed a declaration of consent under UK tax legislation from the
Treasury
Netherlands does not prevent foreign companies from establishing
themselves in the NL
Conclusion: Daily Mail cannot move its headquarters, as the
registered ofice remains in the UK and should comply with the
requirements put out by UK law
CJEU [C-212/97] Centros (inbound)
To establish a company in Denmark, a minimum share capital of
DKK 125,000 (~£12,000) was required to be paid into that
company. This was said to help prevent fraudulent insolvencies
Centros Ltd, a wine exporting company, was established as an
English company, where the minimum share capital is £1, by all
Danish shareholders
Denmark refused Centros’ application to trade in Denmark,
claiming that Centros were trying to circumvent Denmark’s
minimum share capitalisation law registration of a “branch” of
Centros which would trade in Denmark
Conclusion: Whilst Members States may implement measures with
the aim of preventing fraud, Centros’ action did not abuse the right
of freedom of establishment, and Denmark could not adequately
justify the national law in question most importantly, where a
company is lawfully established in one EU MS, the inbound EU MS
cannot prevent trade/on-the-ground establishment
1
, Gebhard-criteria: non-discriminatory, suitable for the objective, not
beyond what is necessary and justifed in the general interest
limited applicability
CJEU [C208-00] Uberseering (inbound)
Uberseering was a BV registered in the Netherlands with an all-
German board, and wanted to exercise standing in a German court
to sue, but this was denied
Conclusion: where a company incorporated in another Member
State exercises its freedom of establishment in another Member
State, that other Member State is required to recognise the
company’s legal capacity where the efective seat of
administration is in the state where legal action is sought, the host
state will have to allow the company exercising its freedom of
establishment to enjoy its legal capacity
CJEU [C-167/01] Inspire Art (inbound)
Inspire Art was a British company seeking to set up a branch in the
Netherlands but the Netherlands wanted to prevent this by
requiring Inspire Art to meet the minimum capital requirement for
limited liability companies
Conclusion: any adjustment to the company law of the host state is
not compatible with European law foreign company should only
be subject to the company law of its state of incorporation (so the
registered ofice)
CJEU [C-411/03] Sevic Systems (cross-border merger - outbound)
German company was prevented to merge with a Luxembourg
company by the German legislature restrictions coming from the
state of origin of the claimant German law only allows mergers
between wholly German companies
Conclusion: companies should be able to merge if national
companies are able to merge and restricting mergers between one
company from the host state and another are contrary to EU law
2
