This article deals with the exclusion of non-profit-making entities from the right of freedom of establishment of Articles 49 and 54 TFEU. It analyses the historical reasons for this exclusion. It is argued that the exclusion from freedom of establishment is no longer justified on the basis of two elements. Firstly, the development of the jurisprudence of the European Court of Justice in the fields of competition law, free movement of capital and tax law makes such exclusion systematically no longer tenable. Secondly, a law and economics treatment of non-profit firms as organisations that efficiently provide services in alternative to for-profit firms weakens the reasons for the exclusion. The article proposes a uniform, European notion of non-profit entity based on a law and economics analysis of this type of firm for the purposes of Article 54 TFEU as opposed to possible different national notions. This is followed by a brief analysis of the hypothesis of regulatory competition among jurisdictions for the law regulating the corporate governance of non-profit entities.

The ECJ's Cartesio judgment should be understood as overriding the Daily Mail judgment of 1988. Under Daily Mail, Community rules governing freedom of establishment were waved away as not applicable, while in Cartesio they are merely not precluding national legislation controlling emigration. According to Cartesio, restrictions on transferring the centre of administration generally pass the test of compatibility. Nonetheless, in the authors' view, there should be no justification for sanctions of annulment or immediate dissolution of a company which has attempted to move its centre of administration to another Member State. In Cartesio, the ECJ proclaimed the right of companies to emigrate for the purpose of conversion into a company form of the host state. By analogy with SEVIC Systems, it seems that the host state may not refuse to give the immigré company permission to convert if similar conversion is open for local legal forms, unless justified by overriding requirements in the public interest. To sum up, the ECJ provides a complex method to determine and protect the freedom of companies to emigrate. Still, this method seems preferable to the other option: forcing Member States to tolerate emigration without regard to their legal tradition and the ensuing difficulties.

Cross-border forum shopping for a different insolvency law regime has become popular within the European Union in recent years. Yet legislators, courts and legal scholarship react with suspicion when debtors cross the border only to benefit from a different insolvency law system. The most prominent legal tool, the European Insolvency Regulation, is based on the assumption that forum shopping has a negative impact on the functioning of the European Internal Market. This paper questions the hostile attitude towards the phenomenon of forum shopping. It is argued that forum shopping can have beneficial effects both for the company and for its creditors, and that strong safeguards for creditors who oppose the migration are in place. Furthermore, the validity of the COMI approach of the Regulation under the fundamental freedoms of the Treaty is questioned; it is suggested that the current regime needs to be amended. The proposed new system would enable more corporate mobility within the European Union and create more legal certainty for all constituencies at the same time.

This paper seeks to provide an analysis of Commission v. Netherlands, a judgment handed down by the First Chamber of the European Court of Justice (hereinafter, ECJ) on 28 September 2006. Although this is the eighth ruling in the increasing series of so-called Golden Share judgments, it too raises interesting questions concerning the relationship between the holding of special rights or golden shares by the state in a privatised company and the EC Treaty provisions on the free movement of capital.

The first issue which is analysed is the application of Article 56 EC to the situation where golden shares are not created by legislation but within the framework of domestic company law. The ECJ decided that even in such a situation the member state concerned is acting, not as a private shareholder, but as a public authority whose actions fall within the scope of application of Article 56 EC. This approach by the ECJ is applauded firstly because it prevents member states from escaping the reach of Article 56 EC by having recourse to mechanisms of general company law and secondly because it allows the ECJ to avoid the thorny issue of whether Article 56 EC is capable of horizontal direct effect.

The holding of golden shares as a restriction on the free movement of capital is then examined. In this context the expansive interpretation given by the ECJ to the concept of restriction is criticised. Attention is then focused on the justification ground invoked by the Dutch state with regard to the golden share in TPG NV, namely the need to guarantee a universal postal service.

In SEVIC, the European Court of Justice (ECJ) held that the refusal of a national commercial court to register a cross-border merger may constitute a violation of the freedom of establishment. In the future, this decision will be superseded by the new Cross-Border Merger Directive. Thus, the importance of the SEVIC decision could be doubted. This note, however, shows that SEVIC has significance beyond cross-border mergers, namely with respect to seat transfers, cross-border divisions and cross-border takeovers.

After a short historical introduction, this paper argues that corporate mobility remains a real political issue. To clarify matters, it proposes to distinguish between a formal seat transfer, being the choice of a different legal regime, and a de facto seat transfer that would not affect the applicable company law, the host State not being entitled to apply its company law rules. A future directive should be based on this distinction, prescribing the formalities for the former and stating clearly the consequences of the latter, thereby also defining the limits within which the “general good” can be invoked.

Article 43 EC prohibits not only restrictions on freedom of establishment on the part of the host State but also those restrictions that are attributable to the State of origin. This article focuses on the latter aspect, the prohibition on ‘exit restrictions’, which was at the centre in the European Court of Justice's recent judgment in Marks & Spencer.

The consequences of recent decisions of the European Court of Justice are that the Member States may not impose instant taxation on companies based only on their migration, but the Member States still do so. Secondary EU law provides tax neutrality only for a migrating SE. The prerequisites under which this tax neutrality is granted are so restrictive that their conformity with freedom of establishment is doubtful. As the European Court of Justice does not deny the right of Member States to tax increases in value at the time of realisation, a tax deferral concept might be a future solution.

Within the European Union, firms are now free under Articles 43 and 48 EC to choose a corporate form of their liking, regardless of the actual head office (real seat) of the company. However, they are not free to choose the applicable bankruptcy regime. Under Article 3(1), first sentence, of the European Insolvency Regulation (EIR), jurisdiction for main insolvency proceedings lies with the courts of the Member State in which the debtor has the centre of its main interests (COMI). The COMI standard is fuzzy and allows last-minute forum shopping by the management/shareholders of a distressed debtor, to the detriment, especially, of creditors who cannot (easily) adapt. Given the poor performance of the COMI standard, it seems worthwhile to explore the merits of an alternative approach that gives more room to freedom of choice in international company insolvency law in Europe. Various models of free choice are discussed: free choice of the applicable insolvency law, free choice of the applicable insolvency law insofar as it contains substantive – as opposed to procedural – provisions, free choice of the bankruptcy forum (‘unconstrained forum choice’) and free choice of the bank–ruptcy forum in combination with the company law applicable to a company (‘constrained forum choice’). This article shows that, on efficiency grounds, the last model is to be preferred. It would improve matters compared to the status quo, and it would also be easy to implement in practice by changing the wording of Article 3 EIR. Even though this solution is preferable as a policy option, it is not mandated by Articles 43 and 48 EC. However, these treaty provisions do not mandate the COMI standard either. European legislation is thus free to effect the desirable changes to the EIR.

This article addresses the question what will be the impact of the recently admitted choice of corporate law in Europe and how regulators can and should react.

Drawing on the empirical evidence and theoretical insights produced in the abundant debate on charter competition in the United States, this article argues that the European scenario differs significantly from the American one. A look at the most relevant differences and an analysis of European incorporators' incentives leads to the conclusion that no Member State occupies at present, or has proper incentives and political manoeuvring space to assume in the future, a similarly preponderant position like the winner of the historical American competition for corporate charters. Although the individual preferences of decision-makers may motivate some cross-border (re)incorporations, no dominant State of incorporation will emerge in the European Union in the medium term.

Synthesised with the possible restraints Member States can put on corporate law arbitrage, the important conclusion to be drawn from a public policy perspective is that, in the European context, some forces arguably accountable for a socially undesirable pro-managerial tilt in the American market for corporate charters are not present. Thus, the case for remedying centralised legislation is harder to make in the European Union. Some of the prospective and existing harmonisation, even if only providing minimum standards, has to be reassessed from this perspective.

On 30 September 2003, the European Court of Justice (hereinafter: the ECJ), in full court, handed down a judgment in the Inspire Art case in which it found certain provisions of the Dutch Law on Formally Foreign Companies of 17 December 1997 (Wet op de Formeel Buitenlandse Vennootschappen. Hereinafter: the WFBV) to be contrary to Article 2 of the Eleventh Company Law Directive and others to form a restriction to the exercise of the right of secondary establishment incapable of justification under Article 46 of the EC Treaty or the case law on overriding reasons relating to the public interest, also referred to as the ‘:rule of reason’ case law. Ten days later, a leading Dutch legal periodical stated that this judgment would lead to the Netherlands being inundated by private limited liability companies incorporated in England under English company law. Does the ruling in Inspire Art mean that the dikes erected in the Netherlands to prevent an influx of so-called formally foreign or pseudo-foreign companies have collapsed? In this paper I will deal with the following issues. Firstly in order to answer the question whether the judgment in Inspire Art can indeed be regarded as a break-through with regard to the freedom of establishment of companies, I will place this ruling against the background of two other judgments in this field, namely the judgments in the Centros and Überseering cases. I will then discuss the importance of the Inspire Art ruling for both the exercise of the right of primary and that of secondary establishment by companies. This will be followed by a discussion of the so-called abuse or improper use of the right of establishment. I will then briefly touch on the issues of the concept of legal capital and forum shopping before drawing some conclusions.

Starting from the latest decision of the European Court of Justice on the freedom of establishment for companies that are active in the European single market, this article develops an economic and comparative framework to answer the question which level (federal or national) should have competence to decide conflict of law rules for companies operating in the entire single market.