A new approach to the governing law of companies in the EU: a legislative proposal

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The European Commission recently invited views on whether legislation concerning the governing law of companies should be introduced. This article proposes that the response should be in the affirmative. It suggests that legislation should allow private ordering in the choice of a company's governing law and the situation of its seat. However, Member States should be limitedly empowered to protect against the avoidance of norms that reflect a "vigorous legislative intention" of the State in which a company's headquarters are situated. In order to retain the benefits of a single governing law and to limit complicated interactions with other laws, the formal bifurcation of a company's governing law should be avoided. Instead, the Member State of incorporation should ensure that certain matters in a company statute reflect the policy enshrined in the law of the Member State of the company's headquarters. Innovative use of information technology may be sufficient to limit potential inefficiencies.
Original languageEnglish
Pages (from-to)589-621
Number of pages33
JournalJournal of Private International Law
Issue number3
Publication statusPublished - Dec 2010


  • private international law
  • company law
  • EU
  • companies
  • choice of law
  • freedom of establishment
  • information technology
  • European Union


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