Free Movement of Company Headquarters in EU

Abstract

In the beginning, It was not easy to figure out the limits of free movement right in terms of the free movement of companies. However, since the first judgment of the Court of Justice of the European Union, rules and principles have been clearer today. Even though for a long period it was considered that the European system would be obliged to act in the favor of one of two existing theories, real seat theory, and incorporation theory, after continuous, systemic, and clarifying judgments, today it is understood that it is not the case. Therefore member states are free to follow one of the two theories. To reach today's clarification on the particular right, the first case which was assessed by the court was, infamous, Daily Mail judgment in 1987. Thus, analyze on the legal situation of the companies in this paper start with particular judgment and other significant cases such as Cartesio, National Grid Indus, Centros, Uberseering and Inspire Art followed it. All in all, the Court made it clear that member states should allow companies that have been incorporated in other Member states to freely enter and locate themselves in their territory, while allowing this, the Court required those companies to obey incorporation rules of their home states since those rules are character and reason of their existence and immune from host state's incorporation requirements. This paper aims to give a gradually increasing assessment, which is categorized according to time and restrictor state, whether home or host state apply restriction, on particular treaty-based right. Ultimately, the Court's proportionality test, with its sub-tests, on particular cases will be pointed out and work will be finalized.