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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Article
CROSS-BORDER TRANSFER OF THE COMPANY SEAT: ONE STEP FORWARD, FEW STEPS BACKWARD
Author(s)
Hana Horak & Kosjenka Dumančić
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DOI:10.17265/1548-6605/2017.10.005
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ABSTRACT
Cross-border transfer of
the company seat for more than decade was and still is hot and unresolved topic
in EU Company Law. Freedom of establishment is indisputable cornerstone of EU
company law and Internal Market enshrined in Articles 49 and 54 of the Treaty
on the Functioning of the European Union (TFEU) but still the company’s
cross border mobility is unsolved. The company transfer of the seat is closely
connected with different Member States legal tradition in relation with the two
different “seat theories” that apply. By the practice of the European Court of Justice both seat theories “the real seat theory” and “the
incorporation theory” are proclaimed as in line with the EU law. Nevertheless,
the process of cross border transfer of the seat occurs as compelling problem
for the cross-border company mobility. In most Member States at the moment the
cross border transfer of the company seat requires the winding-up of the
company and establishing the new one in the other Member State. This procedure
leads to
the loss of legal and business continuity and national approaches to this issue
differ. The Member States intention is to protect shareholders, creditors and
employees and they justify restrictions on these reasons. After a long and
quite successful journey of the European Court of Justice judgments in favorem
of the EU Internal market and with VALE case on the top, there was European
Parliament initiative for a proposal for 14th Directive with an aim to regulate
cross border transfer of seat. The initiative is still not realized. After the
ECJ judgment in Case VALE where the “importance to continue the economic
activity” was enshrined there is new European Court of Justice case
Polbud that deals with cross-border transfer of the company seat. The authors
will examine new developments in the area of EU company law with accent on
cross border transfer of the company seat and analysis of the case Polbud.
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