European Companies’ 'Mutilated Freedom'. From the Freedom of Establishment to the Right of Cross-Border Conversion

Abstract

This article examines the intricate relation between private international law and freedom of establishment within the EU, as well as the CJEU case-law on this issue. Articles 49 and 54 TFEU provide companies formed in accordance with the law of a Member State with the freedom to undertake their business in any other Member States. The relation between this freedom and the national rules on conflict of laws and of substantive company law, which are not fully harmonized within the EU, however, is an issue that has risen many concerns amongst academics and practitioners. Several cases, in fact, have shown that companies are often unable to enjoy this freedom due to private international law and national company law provisions. In this paper I argue that the CJEU interpretation of such provisions has de facto “mutilated” the freedom of establishment, reducing it to a more restricted right of cross-border conversion.