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The European Company Law Action Plan Revisited

The European Company Law Action Plan Revisited: Reassessment of the 2003 priorities of the European Commission

Koen Geens
Klaus J. Hopt
Copyright Date: 2010
Published by: Leuven University Press
Pages: 376
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  • Book Info
    The European Company Law Action Plan Revisited
    Book Description:

    The harmonisation of company law has always been on the agenda of the European Union. Besides the protection of third parties affected by business transactions, the founders had two other objectives: first, promoting freedom of establishment, and second, preventing the abuse of such freedom. In fact, the fear of the Netherlands becoming the ‘Delaware of Europe' (in terms of competition among Member States) seemed real, until, ironically, at the beginning of the 21st century, it was the privilege of the Dutch (and the Danish) state to fail in making the abuse argument before the European Court of Justice. The Court was apparently at ease since comparative law research had shown that the U.S. model of state competition was more fruitful than harmful: Delaware had, among U.S states, developed the most sophisticated corporate law, and nurtured the country's most experienced company law judges. Therefore the Commission felt ready to refocus its company law strategy. On the basis of the so-called Winter Group Report, it wrote its Company Law Action Plan, which was issued on 21 May 2003. Now, six years later, a revisit is appropriate. In this volume researchers of the Jan Ronse Institute for Company law of the Katholieke Universiteit Leuven present five papers on the main priorities of the Action Plan: capital and creditor protection, corporate governance, one share one vote, financial reporting, and corporate mobility. The book also includes responses and ensuing discussions by reputed European company law experts. The conclusion of the book is written by Jaap Winter.

    eISBN: 978-94-6166-008-4
    Subjects: Law

Table of Contents

  1. Preface
    (pp. 7-8)
    Koen Geens and Klaus J. Hopt
  2. The European Company Law Action Plan Revisited: An Introduction
    (pp. 9-24)
    Klaus J. Hopt

    “The European Company Law Action Plan 2003 Revisited” is an excellent topic for celebrating the 20thanniversary of the Jan Ronse Institute at the Catholic University of Leuven. The Institute was founded in 1988 by the late Professor Jan Ronse, a highly renowned authority on Belgian and Dutch company law, with the goal of undertaking education and research in the field of company, association, and financial law. In doing so, Professor Ronse was a pioneer and a visionary.² We must remember that in the early 1980s the slogan of “Eurosclerosis” was circulating, the Delors Commission with its White Book on...

  3. I. Reforming Legal Capital: Harmonisation or Fragmentation of Creditor Protection?
    (pp. 25-78)
    Jean-Marie Nelissen Grade and Matthias Wauters

    The capital formation and maintenance rules are considered to be one of the cornerstones of European company law. The minimum capital requirement for public limited liability companies and the detailed rules on capital formation, shareholder distributions, acquisition of own shares and the alteration of capital, set out in the Second Company Law Directive (hereinafter referred to as the “Second Directive”), express a continental – and in particular, a German³ – approach to shareholder and creditor protection, but are not part of the Anglo-American tradition. It is therefore not surprising that, unlike other Member States, the United Kingdom and Ireland did not extend...

  4. II. Corporate Governance in a European Perspective
    (pp. 79-144)
    Hilde Laga and Floris Parrein

    Corporate governance refers to the organization of the relationship between owners and managers of a corporation. It stands for the way in which corporations are directed and controlled³ and deals with the way in which suppliers of finance to corporations assure themselves of getting a return on their investment⁴. Framing this issue is necessary in a situation where the suppliers of finance do not run the company themselves but hire a management team that is responsible for the daily activities of the company. This separation of ownership and control lies at the heart of the need for corporate governance⁵ ⁶,...

  5. III. One Share One Vote: Fairness, Efficiency and EU Harmonisation Revisited
    (pp. 145-208)
    Koen Geens and Carl Clottens

    The European Commission, in its Company Law Action Plan of 2003, considered that there was a strong case for promoting the principle of proportionality between capital and control – One Share One Vote (“1S1V”) – as a means of achieving, in the medium to long term, real shareholder democracy in the EU³. This proposal was part of a broader set of corporate governance measures intended to strengthen shareholders’ rights.

    Shareholder democracy is in itself a rather vague notion which may sound appealing but only creates confusion⁴. Indeed, it is capital that reigns in a stock corporation, not people; a company is therefore...

  6. IV. Belgian and European Accounting Law 30 years after the Fourth EC Directive. A route planner in a landscape scattered with (a growing number of) crossroads
    (pp. 209-286)
    Karel Van Hulle and Frank Hellemans

    Looking at the European Commission’s Action Plan of 21 May 2003 on “Modernising company law and enhancing corporate governance within the European Union”³, it is already apparent from the introduction that the Commission has adopted a rather narrow interpretation of the concept of “company law” in this context. This immediately explains why accounting law or, to use the Commission’s terminology, “financial reporting”, is not including the Action Plan.

    However, the foregoing does not mean that from the Commission’s perspective company law and financial reporting are not interlinked. Neither does it imply that the Commission’s policy leaves (modernisation of ) financial...

  7. V. Corporate Mobility
    (pp. 287-344)
    Marieke Wyckaert and Filip Jenné

    Pursuant to Article 43 of the Treaty establishing the European Community, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State are prohibited (the “right of primary establishment”). This prohibition also applies to restrictions on setting up agencies, branches or subsidiaries by nationals of a Member State established in the territory of any Member State (the “right of secondary establishment”).

    Article 43, 2ndsection further provides that the freedom of establishment also includes the right to set up and manage companies or firms⁴ under the same conditions laid down for its...

  8. Transcript of Panel Debate
    (pp. 345-356)

    I propose to focus on matters the Commission could take action on or, to the contrary, should not do, as to produce conlusions the future EU Commission could look at. In this manner we are preparing the ground.

    I have a question for Gerard Hertig on financial reporting: I would like to broaden the question from technical financial reporting to disclosure in general and the role of disclosure in this particular financial crisis. Is disclosure a real panacea, should we leave it to the enlightened self-interest of market participants or do we need mandatory disclosure?

    To answer your first question,...

  9. The European Union’s Involvement in Company Law and Corporate Governance
    (pp. 357-376)
    Jaap Winter

    It was an honour to speak at the special commemoration of Professor Jan Ronse on the occasion of the conference on the European Company Action Plan of 2003 organised by the Jan Ronse Institute, chaired by Professor Walter van Gerven and in the presence of former Minister of Justice Van Deurzen and of the Ronse family. This contribution is a reflection of my presentation. Part I addresses the EU’s involvement in company law and its evolution. Part II deals with its more recent involvement in corporate governance.

    The basis of the EU’s involvement in company law is the freedom of...