Free Movement of Companies from a Nordic Perspective
| Published date | 01 March 1999 |
| Author | Karsten Engsig Sørensen,Paul Krüger Anderse |
| DOI | 10.1177/1023263X9900600104 |
| Date | 01 March 1999 |
| Subject Matter | Article |
Pa ul K rüg er A nde rse
Ka rst en E ng sig Se re i
Fr ee M ove me nt of C omp anie s from a N ordic Per spe ctiv e
§ 1. C omp any L aw Ha rm oni zat ion and th e F ree M ove me nt o f C om pan ies
As a result of the real ization o f the single market, the discussion about the future
harmonization o f company law in the EU increasingly centres on the free movement of
companies. According to Articles 58 and 66 of the Treaty establishing the European
Community (EC Treaty), companies and natural persons have the same r ights of free
movement. The free movement of a company, however, is restricted by the fact that a
company is a legal fiction created by ( national)1 leg islation and whose existence and
activities are restricted by the provisions o f this legislation.
In order, in ter ali a, to ensure the free movement o f companies, the EU has been
harmonizing company law, and an approximation of major parts of national legislation
concerning public and private limited companies has resulted. A similar approximation
occurred in the Nordic countries in the 1960s and 1970s through the drafting of uniform
Nordic legislation on public limited companies. The discussion below examines the
parallels between t he EU harmonization and the Nordic cooperation within th e field of
company law.
Whereas approximation of national companies acts has been achieved by the adopted
directives, the actual right of free movement of companies with in the EU has no t been
fully achieved. A company may open a branch or establish a subsidiary in another
Member State, but other cross-border activities are largely restricted by existing national
legislation. Therefore, the Commission has propos ed a number of measures in the field
of company law:
* Professor at the Depar tment of Law, Aarhus School of Business, D enmark. This article is based on
a pap er of the sam e title presented at the confer ence ‘Free Movement of Companies, Europ ean and
Nordic P erspectives’ held a t the University o f Stockholm, Sweden , in May 1998.
** Associate Pro fessor at the Department of Law, Aarhus School of Business, Denmark.
1. Apart from European Economic Interest Groupings, all types o f company in the EU are so far created
under national legislation.
6 MJ 1 (1999) 47
Free Movement of Companies from a Nordic Perspective
National legislation does not normally allow companies to enter into cross-border
mergers. The Commission has propose d a Tenth Company Law Directiv e
concerning cross-b order mergers and proposed statutes for a European Company,
a European Association, a European Mutual Society as well as a European
Cooperative S ociety.2
At present a company has only limited possibilities of changing nationality. The
national conflict o f laws rules in some Member States also prevent a company
from transferring its central a dministration to another Member State. To solve this
problem, the Commission is preparing a proposal for a Fourteenth Company Law
Directive on the transfer of the registered offi ce of a company from one Member
State to another with a change of applicable law. 3
Companies forming pa rt of cross-border groups often coope rate closely. National
legislation and case law concerning groups of companies do not always p rovide
a go od basis for such cooperation. To facilitate coop eration in groups of
companies - and to ensure the protection of creditors and shareholders - the
Commission has prop osed harmonization of the law relating to g roups of
companies, cf. the proposal for a N inth Company Law Dir ective.4 The proposal
for a European Company also aims to ensure improved conditions fo r cooperation
in cros s-border gro ups.5
So far, the EU has not solved the problems relating to the free movement of companies.
The following analysis looks at whether these problems have been solved by the Nordic
countries, or whethe r the necessary conditions for solving the problems exist between
the Nordic countries. In addition to an analysis of the Nordic legislative cooperation (cf.
§ 2 below), an analysis o f the conflict o f laws rules in the Nordic countries is also
necessary, cf. § 3 below.
The discussion wil l also include an analysis of some specific situations in which
problems conc erning the free movement of companies have arisen in the Nordic
countries. This concerns the question o f whether foreign companies can be used to
circumvent national company law rules and what po ssibilities national authorities have
2. The proposal for the Tenth Company Law D irective is found in [1985] O.J. C23/1 1. The latest
proposal for a Euro pean Company Statute is from 1991, see [1991] O.J. 07 6 /1 , whereas the
proposals for the oth er three types of company are all from 1992, see [1992] O.J. C99/1 et seq.
3. There is still only an initial draft directi ve, see XV/D2/6 002/97 of 7 N ov. 1997. An earlier draf t was
published in Zei tsc hr ift f i r W ir tsch aft sre cht un d I nso lv enz pra xi s (1997), 1721.
4. There is no official Ninth Company Law Draft Directive, but there is an initial draft fr om 1984, see
Doc. no. III/1639/84, published in Marcus Lutter, Eur op äis che s Unte me hm ens rec ht, (Walter de
Gruyter, 1996), 244. The discussion concerning the future of the Ninth Directive was the subje ct of
the ‘Forum Europaeum Konzem recht’, see ‘Konzemrech t fiir Europa’, Ze its ch ri ft fü r U nte me hm ens -
un d G ese llsc ha ftsr ec ht (1998), 672.
5. See th e Preamble of the SE pro posal.
48 6 MJ 1 (1999)
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