'The European Company Statute - How will it better protect minority shareholders?'

Abstract

This article examines the European Company Statute which came into force on 8th October 2004 with an analysis of minority shareholders rights under this new statute compared with the present company law in three major member states. There is a common perception that different legal systems have different levels of shareholder protection and different levels of risk against fraud. Analysis indicates that despite differences in the common law legal systems and civil law systems, member states' company law has been converging, largely due to outside forces . These forces are ongoing process of globalisation of financial regulation, the European Union's directives to harmonise member states, the OECD's internationally agreed code of corporate conduct, 'Principles of Corporate Governance', international accounting standards and electronic fraud, the International Accounting Standards being an important factor since a random sample of companies registered in UK, France and Germany show that 45 % of these have operations in the USA, 43% in Asia, 26% in South America, 19% in Africa and 12% in Australia and New Zealand.

KEYWORDS - shareholders, European, statute, converging, fraud, regulation.

Introduction

This article builds on the contributions of Coase(1960)1, Hayek (1973)2, North (1990)3 and Williamson (1988) 4 in the analys...

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