Corporate Mobility in Private International Law and European Community Law: Debunking Some Myths

Abstract

This paper examines corporate mobility from a private international law perspective and a European Community law perspective. It considers the two important conflicts of laws theories: the incorporation theory and the real seat theory. It looks at the rationale behind these theories and the long-standing dichotomy between incorporation States and real seat States. The paper examines how the application of the incorporation theory and the real seat theory affect corporate mobility in a number of scenarios. The emphasis of the paper is on corporate mobility in the European Community context. The provisions of the EC Treaty furthering cross-border corporate movement and relevant secondary legislation are examined. The limitations of the current legislative framework are appraised and attempts to enact legislation dealing specifically with corporate mobility are evaluated. Important case law of the European Court of Justice is also assessed. Six cases are analysed: Daily Mail, Centros, Uberseering, Inspire Art, SEVIC and Cartesio. The effect of these cases on cross-border transfers of seat is considered. Also, general trends arising from the judgments are depicted and contrasted with entrenched assumptions under private international law. The paper concludes with an overall assessment of the extent to which obstacles to cross-border mobility have been eliminated as a result of Community law.