European law is a daily reality. The legislation and, correspondingly, the extend of regulations given by the written primary and secondary European Union (EU) law becomes so densely, meanwhile almost as densely as it was hitherto only known from the national regulations system. Consequently, e.g. in Germany, more than 50 per cent of all administrative decisions on federal, state or communal level are taken on basis of regulations coming from Brussels - not everybody is aware of this development yet. From a theoretical point of view, this EU-legislation can be divided into two different types of rules. One type, of course, are the rules passed by the EU-legislator which create new fields of law. This is regularly then the case if supranational European institutions are founded. The by far bigger part of EU-legislation is, however, that type which consists of rules created to harmonize the regulations already existing on national level in the Member States in order to lighten the burden of friction caused by 12 different (not to talk about the future developments, namely the East-Enlargement of the European Union) systems within the EU in the age of globalization, especially seen from an economical point of few. Again, from a theoretical point of view, the legislative instrument of harmonization can be divided into two categories. The first can be described as assimilation and adjustment. It is meant to bring the differing national regulations in one subject of matter, e.g. company law, in a kind of mainstream, i.e. to co-ordinate and to make them similar but not necessarily uniform. The Commission in that case normally uses directives for harmonization of law. The Member States then are obliged to set up their own legislation in a manner that the principle of effectiveness of the EU-rules is not infringed but promoted. Nevertheless, there is room for keeping alive typical and traditional national characteristics of legislation. The second category of harmonization can be described as standardization or, even stronger, unification of law. In that case the means of EU-regulation is used. It takes away the freedom of the Member States to design and set up harmonized rules in their own responsibility. An EU-regulation is binding upon every Member State and it has immediate validity. Thus, unlimited availability of the same law throughout the whole Community is, ideally, being achieved.
Table of Contents
DISCUSS THE NEED FOR HARMONIZATION OF COMPANY LAW IN EUROPE HAVING REGARD TO THE DEVELOPMENT AND EXPERIENCES IN THE U.S. AND THE CURRENT STATUS OF HARMONIZATION IN EUROPE.
INTRODUCTION
LEADING TO THE TOPIC
WHAT IS HARMONIZATION?
AUTONOMOUS HARMONIZATION
NEED FOR HARMONIZATION OF COMPANY LAW IN THE EUROPEAN UNION?
WHY MIGHT HARMONIZATION BE NECESSARY?
Current Status of Harmonization of Company Law in Europe
Globalization
Freedom of Establishment in the EU
Protection of Third Parties
Development and Experiences in the U.S.A.
No Uniform Company Law
Mitigating factors
Model Statutes
WHY MIGHT HARMONIZATION NOT BE NECESSARY?
Current Status of Harmonization of Company Law in Europe
High Transition Costs
Gap between Law and Reality
Different Languages
Package Solutions
Petrifaction of Law
Development and Experiences in the U.S.A.
Basis of a Common Legal Culture
Freedom of Establishment in the U.S.A.
Model Act Legislation (MBCA)
EVALUATION OF THE FACTS
THE COMPETITIVE APPROACH
A EUROPEAN MODEL ACT
CONCLUSION
EUROPEAN PROBLEMS – A FINAL OUTLOOK
THE SOCIETAS EUROPAEA
Objectives and Topics
This work examines the necessity and methods of harmonizing company law within the European Union by comparing the EU approach with historical developments and experiences in the United States, particularly focusing on the tension between uniform codification and competitive legal systems.
- The theoretical foundations and legislative instruments of harmonization within the EU.
- A comparative analysis of the U.S. model, focusing on state-level competition and model acts.
- Arguments for and against the necessity of strict legal harmonization in Europe.
- Challenges related to cultural differences, language barriers, and national sovereignty.
- The feasibility of a European Model Act as an alternative to current directive-based policies.
Excerpt from the Book
I) LEADING TO THE TOPIC
European law is a daily reality. The legislation and, correspondingly, the extend of regulations given by the written primary and secondary European Union (EU) law becomes so densely, meanwhile almost as densely as it was hitherto only known from the national regulations system. Consequently, e.g. in Germany, more than 50 per cent of all administrative decisions on federal, state or communal level are taken on basis of regulations coming from Brussels – not everybody is aware of this development yet.
From a theoretical point of view, this EU-legislation can be divided into two different types of rules. One type, of course, are the rules passed by the EU-legislator which create new fields of law. This is regularly then the case if supranational European institutions are founded. The by far bigger part of EU-legislation is, however, that type which consists of rules created to harmonize the regulations already existing on national level in the Member States in order to lighten the burden of friction caused by 12 different (not to talk about the future developments, namely the East-Enlargement of the European Union) systems within the EU in the age of globalization, especially seen from an economical point of few.
Summary of Chapters
INTRODUCTION: Defines the scope of EU legislation, distinguishing between the creation of new legal fields and the harmonization of existing national regulations.
NEED FOR HARMONIZATION OF COMPANY LAW IN THE EUROPEAN UNION?: Explores the arguments regarding the necessity of harmonization, considering the reduction of transaction costs versus the potential benefits of legal competition, while examining the U.S. experience with model statutes.
EVALUATION OF THE FACTS: Critically assesses the competitive approach between Member States and the potential implementation of a European Model Act to improve foreseeability and flexibility in corporate governance.
CONCLUSION: Addresses the persistent cultural and political challenges within the EU and reflects on the limited success of the Societas Europaea in creating a unified European company law framework.
Keywords
Harmonization, Company Law, European Union, United States, Legal Competition, Model Acts, Transaction Costs, Real Seat Doctrine, Societas Europaea, Codification, Corporate Governance, Legal Culture, Globalization, Member States, Directive.
Frequently Asked Questions
What is the core focus of this publication?
The publication analyzes the need for harmonizing company law in Europe, specifically by comparing the current EU approach with the diverse corporate legal frameworks found in the United States.
What are the primary thematic areas covered?
Key themes include legal harmonization strategies, the competitive nature of national legal systems, the impact of globalization, and the effectiveness of current EU directives compared to U.S.-style model acts.
What is the central research question?
The work explores whether strict, top-down harmonization of company law is necessary or if alternative approaches—such as fostering legal competition or utilizing model acts—would be more effective in a diverse European economic landscape.
Which scientific methodology is employed?
The author employs a comparative legal research methodology, evaluating the European Union's regulatory framework against the U.S. experience to highlight differences in legal culture and economic efficiency.
What topics are discussed in the main body?
The main body covers the definition of harmonization, arguments for and against its necessity, the limitations of current EU directives (e.g., high transition costs, petrifaction of law), and the historical experiences of the U.S. regarding its uniform and non-uniform legal practices.
Which keywords best describe the work?
Key concepts include Harmonization, Company Law, European Union, Legal Competition, Model Acts, and Corporate Governance.
How does the author view the "real seat doctrine"?
The author identifies the "real seat doctrine" as a significant barrier that thwarts efforts in European company law policy by requiring companies to incorporate in the jurisdiction where their headquarters are located.
What is the status of the Societas Europaea?
The author characterizes the Societas Europaea as a result of a 25-year, largely unsuccessful effort by the European Commission, serving currently more as a "gesture of good will" rather than a fully effective supra-national legal tool.
- Quote paper
- Jochen Müller (Author), 2002, Harmonization of company law in Europe, Munich, GRIN Verlag, https://www.grin.com/document/56982
