Cases - corp

Daily Mail

freedom of establishment does not give a company the right to transfer its central management to another Member State while remaining governed by the law of the state of incorporation

Daily Mail rule

national law controls company exit

• right of establishment does not include the right to transfer central management and control to another state

Cartesio

Hungary could prevent a company from moving its seat to Italy while remaining a Hungarian company

Cartesio court reasoning

To question if a company is faced with a restriction of the freedom of establishment, can only arise if in fact that company has a right to that freedom (like given the conditions)

companies are creations of national systems and can;

• define connecting factors

• and define how to keep the connection

Cartesio rule

national law determines the connecting factor and what is required to keep it

companies are not free to move their real seats while retaining the legal status in one country if the national law of such country does not permit so

Cartesio significance

reaffirmed Daily Mail that companies are creatures of national law

Uberseering

Germany didn’t want to recognise the legal capacity of a company validly incorporated in the Netherlands

Uberseering rule

a company validly incorporated in one Member State must be recognised in all other Member States

Uberseering significance

host states cannot deny legal personality to EU companies properly incorporated elsewhere

Vale

Italy company sought to convert into a Hungarian company. Hungary refused on grounds that only Hungarian companies could convert domestically.

Vale rule

if domestic conversions are allowed cross-border conversions must also be allowed under principle of equivalence and effectiveness

Vale significance

host states may impose procedural requirements but cannot automatically refuse foreign conversions (given than locals can)

Sevic

Germany refused registration of a merger between a German and Luxembourg company.

Under Germany law, mergers between 2 German companies was allowed, but between one German and one foreign company it was not allowed.

Sevic rule

freedom of establishment covers all measures pursuing economic activities. This includes cross-border mergers. Restrictions are only justified to protect creditors, minority shareholders and employees.

Sevic significance

if domestic mergers are allowed cross-border mergers must also be allowed unless justified

Polbud

Polish company wanted to move its registered office to Luxembourg. But under Polish law to complete the move and be removed from the Polish register it was required to undergo a liquidation procedure.

Polbud rule

forced liquidation violated freedom of establishment

Polbud significance

transfer of seat alone is not evidence of fraud

protections are allowed (for interest of creditors, minority shareholders, employees) but it must be proportional

Sergers

Dutch authorities refused insurance benefits towards a director because the the director was not an employee and because company was incorporated abroad (but dutch law directors are covered by such insurance)

Sergers rule

a Member State cannot deny benefits solely because a company was formed in another Member State

Sergers significance

foreign EU companies must receive equal treatment

Centros

Denmark refused branch registration in UK because founders used UK incorporation to avoid Danish minimal capital rules

Centros rule

companies may choose the most favourable Member State for incorporation and establish branches elsewhere, it is the inherent exercise of freedom of establishment

Centros significance

forum shopping (choosing the more lenient law) is not in itself an abuse of EU law

Inspire Art

Netherlands imposed extra requirements on a foreign incorporated company operating mainly in the Netherlands

Inspire Art rule

host states cannot impose additional capital or disclosure requirements solely because a company is foreign incorporated

Inspire Art significance

operating mainly in another Member State is not proof of fraud

Uber

question whether Uber was an information society service or a transport service

Uber rule

…provides a transport service not merely a digital platform service

Uber significance

regulated under Article 58 TFEU not Article 56 TFEU

• art 56 - protected by EU - freedom of services

• art 58 - under MS law - transportation service

Job Centre

Company in italy wanted to be an intermediary between employees and employers but under Italian law intermediaries are only for public agencies

Job Centre rule

Member States cannot maintain monopolies

Even if a service is normally public it is still an economic activity, cant distort competition without justification (and also when cannot meet demand)

Job Centre significance

job placement is an economic activity protected by EU competition law

Ubbink

company appeared in a register as being in formation and not fully incorporated

Ubbink rule

EU nullity rules (in this case art 11 of directive 2017/1132) apply only when a company has been properly disclosed as existing

Ubbink significance

if registration is incomplete (not properly registered in public registry) responsibility is determined by national law

Marleasing

Spain had not fully implemented the directive. Problem regarding if Spanish law should be applied (which would allow nullity of company because of unlawful cause) but directive art 11 has only an exhausitve list

Marleasing rule

national courts must interpret national law in conformity with EU directives

Marleasing significance

directives influence interpretation even before proper implementation

Revlon

company faced a hostile takeover (white knight buyer) shareholders sued

Revlon rule

when sale of the company becomes inevitable directors must maximise shareholder value

Revlon significance

directors are to secure the highest value reasonably available for shareholders, and may not balance the interest of shareholders against the interest of other stakeholders

Nativa S.R.L.

Italian company sought registration with a purpose focused on positive social impact and happiness but was denied because the purpose was not economic enough, this lead to a legislation on Societa Benefit

Nativa S.R.L. rule

companies may pursue both profit and common benefit under Italian benefit corporation law

Nativa S.R.L. significance

directors have a DUTY to balance profit and social goals

Rabobank

EU company directives do not protect third parties from a director acting on behalf of a company in situations where there is a conflict of interest.

Rabobank rule

conflict of interest issues fall outside Directive 2017/1132 and are governed by national law