Abuse of Companies: An Introduction

Abstract

In recent years, there has been a renewed focus on the abuse of the corporate form. The primary focus has been on situations where the corporate form as such has been used in an abusive way (for instance to avoid liabilities, to cover (illegal) acts or to benefit from certain rules), and not so much on abuse practiced within companies (by shareholders, directors, etc.). In some cases, the abuse of companies has experienced much press coverage, such as the Panama Papers, the use of letterbox companies and a number of scandals involving European banks overlooking money laundering. A consequence of these and other scandals is that the reputation of limited liability companies in general suffers. As a reaction to this, over time, the judiciary and legislators have tried to handle such abuse of companies to minimise the damage. In recent years, also the European Union (EU) legislators have been active in this area taking steps to prevent the abuse of companies in the area of money laundering, posted workers, taxation and company law. Given that the topic has re-emerged in the way described, the moment seems ripe for an analysis of how abuse of companies has been addressed over time in order to assess whether the current solutions are sufficient. This is the aim of the book entitled Abuse of Companies and the following introductory chapter gives a brief overview of the book and presents some overall conclusions.