European Company Law

Abstract

In Europe, as elsewhere, companies have traditionally had their roots in the sovereign States. In each country company law has developed in its own way and consequently companies incorporated under different national laws often have less in common than one would be inclined to think. The differences between national company laws may hamper a company’s dealings with foreign nationals and discourage them from purchasing its shares. Almost all companies are fettered by the law under which they are incorporated and this may seriously affect their international mobility; they find it virtually impossible to transfer their seat to another country or to merge with foreign companies and in some cases they even experience difficulty in being recognized abroad. Although these impediments have obviously not prevented the company from being the major vehicle for international business transactions, it cannot be denied that differences in company law from one country to another may cause problems or at least cost legal fees.