Cross-border corporate agreement: cross-border issues

Abstract

The subject of the study is the legal relations that develop between the participants of a corporate agreement with a foreign element. Due to the specifics of this type of contract, not all types of foreign element lead to a cross-border nature, moreover, the amount of a person's participation in the authorized capital of a corporation matters. The issues of changes in the applicable law leading to the impossibility of execution of the corporate contract and the ways in which it is possible to protect the parties from these adverse consequences are investigated. The article analyzes the consequences of the special "volatility" of a corporate contract, which consists in the fact that it is more susceptible to various changes in the foreign element, in particular, related to the exit of a foreign participant from the corporation, the relocation of the corporation, the redomicilation procedure. The methodological basis of the research is the universal dialectical, logical, formal-legal, hermeneutic research methods. The comparative legal method was also used by involving the practice of conflict-of-laws regulation of the countries of the common system of law and Germany. The novelty of the study lies in the fact that mechanisms have been developed to maintain the balance of interests of the parties to a corporate contract with changes in applicable law, the consequences of relocation and redomicilation of the corporation have been determined, a proposal has been put forward on the amount of the participation share of a foreign participant necessary for the recognition of the contract as cross-border. The main conclusions are the following provisions: when determining the cross-border nature of a corporate contract, it is necessary to apply both a legal and an economic approach; the best way to level the risks of changes in applicable law is a conditional choice of applicable law; to determine the materiality of a foreign element, it is necessary to be guided by the norms of corporate legislation on dependent companies; relocation and redomicilation do not lead to a change in the conflict of laws choice of applicable law.