There are four stages leading up to the creation of a limited liability company (GmbH). The founders agree upon the memorandum and articles (1), appoint a manager (2) and pay in the capital contribution (3). They must then notify the relevant District Court (Registergericht) in order to register the company in the Commercial Register (Handelsregister) (4). This notification must include a confirmation from the manager that the requisite minimum proportion of the proprietor's capital contributions has been paid in and is freely available for his or her use.

For historic reasons, the parliamentary legislator of North-Rhine-Westphalia assigned important public responsibilities concerning water supply and distribution in the areas of the rivers Lippe and Emscher to the public-law bodies Lippeverband and Emschergenossenschaft. By law the compulsory members of theses bodies are the Land (federal state) North-Rhine-Westphalia, the municipalities situated in the respective territories, as well as private companies involved with water distribution or usage as well as companies profiting from the bodies’ work or making it more difficult. In 1990 the organizational structure of the two bodies was reformed and participation rights of the respective work forces were introduced. They were granted the right to name representatives to the bodies’ supervisory boards (councils) and the boards of directors, but not for the most powerful organs, the assemblies of the bodies’ members.

The European Company – or Societas Europaea (SE) – has been referred to as the “flagship of European Company Law”. This is certainly true if one considers the ambitious origins of the project. In 1970, the European Commission presented the first draft of the Statute for a European Company. A completely autonomous European legal form was intended, freely floating above the national legal forms and based solely on the sturdy branch of a purely European corporate law. The text of 1970 was, in substance, a complete code of corporate law. From the management structure to shareholders’ actions, from the law of corporate groups (Konzernrecht) to accounting law, from tax law to co-determination – every regulation required in a modern corporate law was provided for.

On October 24, 2002, the Second Senate of the Bundesverfassungsgericht (German Federal Constitutional Court) issued its ruling in the Geriatric Nursing Act case. The eagerly expected judgment not only puts an end to the discussion on the Federation's legislative powers in the field of geriatrics, which has occupied German politicians and constitutional scholars since the mid-1980s, when the drop in the number of applicants for geriatric nursing jobs and the steady growth of the elderly population have led to calls for a standardization of the education for geriatric nurses at Federal level. More importantly, the decision brings clarity to the question of the justiciability of the so-called Erforderlichkeitsklausel (“necessity clause”) laid down in Article 72 para. 2 of the Basic Law.

The decision of the Bundesarbeitsgericht [Federal Labor Court, Abbr. BAG] of October 10, 2002 raises essentially the increasingly important question of the exercise of religious freedom at the workplace. The case concerned the ordinary dismissal of a Moslem saleswoman employed in a big department store claiming to wear during the working time, according to the rules of her religious belief, as headgear a shawl covering the hair. The court has declared that the dismissal is violating section 1 par. 2 Kündigungsschutzgesetz [Act on the Protection against Unfair Dismissal, Abbr. KSchG] and has mainly stated that the wearing of a headgear at the workplace as an expression of the religious belief does not justify as such the ordinary dismissal of an employee.

“Certainty is so essential, that law cannot even be just without it”, Francis Bacon once observed in the good old times. In the context of the general 20th century's trend from formal to substantive justice, however, policy objectives such as distributive justice, democratic political governance, or effective transnational regulation increasingly came to the focus of private law legislation. The rise of “consumerism” in contract law is the paradigmatic example of this development, which – at least from a German perspective – was triggered mainly by European measures on the harmonisation of private laws. While all intellectual capacities were absorbed by “regulating contracts” in the light of the new principle of “contractual solidarity”, the basic need of a legal system for overall consistency as a prerequisite for the administration of justice (“treating like cases alike”) obviously got out of sight. The critique with regard to pointillism and eclecticism in the European approach to private law harmonisation (“piecemeal legislation”), which lead to the patchwork character of the acquis communautaire, is a common place today, even within the European Commission. However, the conclusion, that has to be drawn, is not formulated straight forward: As consistency goes, arbitrariness comes, an inconsistent law is a contradictio in adjecto.

The traditional justification of consumer protection is founded on the notion of restraining the monopoly power of huge companies and the potential that they posses to influence consumers via advertising that limits consumers’ ability to verify what is in their own best interest. This theory refers not to the individual consumer in a concrete situation, but stresses a general economically weaker position of the consumer vis-à-vis the suppliers. Consumers are seen as less knowledgeable and as economically inferior to producers and traders. So a large deviation between the ideal of consumer sovereignty and reality is presumed. The power imbalance on the market (“countervailing power”) leads to demand for market reconciliation, compensation or balancing. According to this conception the state must support the consumers as weaker market participants during the counterweight

Formation of a holding SE is one of the four ways of establishing a European Company (societas europaea - ‘SE') as regulated in the Council Regulation No 2157/2001 on the Statute for a European Company (cited below: SE-Reg.). It is also an original way of European company law to create a joint stock company. It's true that companies are making use of the holding structure in order to combine their economic potentials and to create international groups of enterprises. But, as it was in the case of the formation of the Aventis S.A., the holding structures usually come into existence by means of an increase of the subscribed capital in an existing company. The new shares are issued to the shareholders of another company who pay for it with the shares of their company. The operation results in formation of a holding structure in which the company that increased its capital, becomes a holding company dominating a company or companies the shares of which were contributed. The formation of a holding SE is guided by the similar idea: an exchange of the shares of national private or public limited liability companies into the shares of a European Company. However, in contrast to the Aventis like-cases, the dominant company, i.e. the SE, does not exist yet but has to be created by the companies according to the provisions of the SE-Regulation. This fact as well as many legal gaps existing in the scanty regulation of holding formation and the necessity to apply both the provisions of European and national law concomitantly may lead to many legal problems some of which will be presented below.

This essay deals with the topic of director & officer liability for the dissemination of false information in Germany in the form of ad-hoc disclosures. From the perspective of an American trained attorney, it is surprising to note that there is, to date, very little – quite possibly zero – real personal civil liability in this area for directors & officers of publicly traded companies, however limited criminal sanctions do exist. The essay discusses the lawmaking which is underway in Germany to increase civil liability. After a review of the laws which govern the dissemination of false information, the essay reviews five German cases: Infomatec, EM.TV, Metabox, Comroad and Deutsche Telekom as examples of cases where criminal sanctions for management appear to be much more likely than civil liability.

Robert Kagan's essay Power and Weakness is a masterful articulation of the neo-conservative vision. That said, it is surely the essay's fabulous timing, rather than its content, that has set the international law community abuzz. The vision itself is not new–it has been circulating for at least a decade.

The ancient Latin saying volenti non fit iniuria (loosely translated: if you consent you cannot complain) denotes a legal principle on a par with principles such as pacta sunt servanda or non concedit venire contra factum proprium. As a defence to tort claims well established in both the civil and the common law tradition, the phrase articulates an universal value that has never been seriously contested. Why, then, does a young German scholar devote a complete habilitation (professoral thesis) to the study of such an expression? The answer is clear: as with any general principle of law, the problems start once you try to apply them to a specific case. Unlike rules, principles do not lend themselves to easy execution but require thorough reasoning, taking into account the fact that principles may work both ways. For example, if a seller does not deliver the promised good in time, he may invoke the principle of pacta sunt servanda in order to convince a judge that despite his breach the contract should be upheld. Likewise, the buyer may claim that, since the seller did not keep his promise (i.e., violated the said principle), she does not have to keep hers either.

The term corporate governance has come to mean many things to many people. One important reason is that views continue differ as to the fundamental question of the role the firm. While some believe that corporations can contribute best to society if they do what they do best, namely to provide high quality goods and services to the marketplace, for others corporate responsibilities are much broader.

The Bundestag's 1998-2002 term witnessed an unprecedented agenda in private law legislation. Besides profound changes in various areas, including a radical overhaul of the German Law of Civil Procedure, the German Bundestag (parliament) enacted a sweeping reform of the Bürgerliches Gesetzbuch (German Civil Code). Compared to these radical changes the proposed Act to Prevent Discrimination in Private Law seemed a rather modest endeavor. The project nonetheless turned out to be more troublesome than expected. In May 2002, it was shelved, due also to heavy lobbying activities by, inter alia, the Catholic and Protestant Churches. Yet it will no doubt soon re-enter the stage as Germany is under an obligation to translate two EU anti-discrimination directives into national law.

In November, 2000, the Bundesverfassungsgericht (Federal Constitutional Court) surprised the public by holding that the publisher's freedom of expression and press secured by Article 5 of the Grundgesetz (Basic Law) could be violated if the publication of advertisements was prohibited, provided the advertisement is included in the scope of protection itself. At that time shocking advertisements were being heavily discussed in the public. This public debate had been sparked, in part, by the Bundesgerichtshof (Federal Court of Justice) decision prohibiting Stern Magazine's publication of advertisements containing repulsive pictures on behalf of the fashion and lifestyle brand Benetton. The magazine complained to the Federal Court of Justice against this judgment, an appeal that generated the dictum quoted above. In November, 2002, the Federal Constitutional Court had another opportunity to characterize the importance of the freedom of expression and the press in competition law, particularly in the context of the publishing industry.

National legislators approach European law very differently. The reason for these differences lies partly in the historical development of their individual legal cultures. If one pursues a broad interpretation of the term ‘legal culture’ one takes especially into account the style of law and the attitude toward it. Thus legal culture can be defined as the Continental civil law countries’ ideal of a “concise, but comprehensive codification by which the judge can derive solutions for all possible cases through teleological interpretation;” whereas the common law rather limits this concept to “special laws which are interpreted very narrowly by the courts and accordingly are designed by the legislator to the last detail”. Furthermore, one could include the status of a judge, the nature of legal discourse, or the training of legal professionals, as well as the respect accorded to the law by the population when defining the concept of ‘legal culture'.

The controversy over the planned anti-discrimination laws in Germany, specifically the new provisions in private law to be discussed here, rages on unabated. Publications on this planned law are numerous. And, whether Pro or Contra, they turn out notably more engaged and heated than is suited to the lawyers’ traditional temperament. The fact that the formal discussions and rounds of debate, which were long ago extended to non-lawyers, continue to multiply shows symptomatically to just what extent the topic is now able to get experts and laypeople alike worked up. The principle of equality of human beings, for centuries “one of the pillars of European democracies”, is about to gain currency in new fields of significance: it now aims beyond the binding of states, to bind their citizens as well.

On 12 December 2002, the European Court of Human Rights (ECHR) declared inadmissible an application filed against Greece and Germany by 257 victims and relatives of victims of Nazi war crimes committed in Greece in 1944. This decision was not only the latest of a number of ECHR decisions concerning the judicial treatment of Nazi war crimes committed during the Second World War, but it also marked the second time that the Court had to deal with the question of whether states may rely on sovereign immunity in cases concerning breaches of peremptory and non-derogable jus cogens norms.

[Editors’ Comment: The following is the text of Mr. Kenny's remarks at the Second European Corporate Governance Conference, which was organized by the Vlerick Management Institute and the University of Gent, Belgium, and held at the Belgian National Bank, Brussels, 28 & 29 November 2002. The conference, which was convened by Professor Lutgart Van den Berghe of the University of Gent, was dedicated to the intensive debate over the marks and characteristics of “European Capitalism” in light of the international corporate governance debate, which has been affected by the recent earthquakes in the confidence of investors, shareholders and stakeholders precipitated by the corporate scandals of Enron, Worldcom, Global Crossing and others. The conference also took note of the impact of America's new Sarbanes-Oxley legislation, which seeks to respond to the wave of corporate scandals, on the international corporate governance debate.

Addressing Human Rights requires that we consider both reality and imagination. What forces are shaping the world in which we live? What space is available for change? What role is played, and can be played by individuals? At a meeting of relatively young leaders of this hemisphere, organized by the Inter-American Development Bank at the end of the Twentieth Century, Gabriel Garcia Marquez was asked what we might expect from the Twenty-First Century as we emerge from the Twentieth Century, which distinguished itself with two world wars and with genocide. Gabriel Garcia Marquez responded by saying that we should not expect anything from the Twenty-First Century. He explained that everything relevant was the result of imagination, from the Ninth Symphony to heart transplants; they were in the heads of their inventors before taking place in reality.

Rational investment decisions require accurate information regarding the operations and performance of issuers. As the U.S. Securities and Exchange Commission (“SEC”) has recently noted: “Accurate and reliable financial reporting lies at the heart of our disclosure-based system for securities regulation, and is critical to the integrity of the U.S. securities markets. Investors need accurate and reliable financial information to make informed investment decisions. Investor confidence in the reliability of corporate financial information is fundamental to the liquidity and vibrancy of our markets.” Issuers have strong motives to signal to investors that the business information they disclose is correct and complete – so as to build solid reputations and avoid discounts that investors might apply to their stock prices as compensation for undisclosed risk or misrepresented results. A similar argument applies to “gatekeeping” reputational intermediaries, such as auditing firms and investment banks that lend their reputations to their clients in various ways. However, dishonest issuers and gatekeepers can take advantage of a generally honest market (that does not contain a substantial fraud risk discount), and the return on fraud for a given member of a firm might exceed such individual's pro rata share of the firm's overall reputational capital, making crime literally pay; therefore, regulation must be introduced to supplement market controls and mandate full and accurate disclosure.