European_Union_law

In regard to companies, the Court of Justice held in R (Daily Mail and General Trust plc) v HM Treasury that member states could restrict a company moving its seat of business, without infringing TFEU article 49. This meant the Daily Mail newspaper's parent company could not evade tax by shifting its residence to the Netherlands without first settling its tax bills in the UK. The UK did not need to justify its action, as rules on company seats were not yet harmonised. By contrast, in Centros Ltd v Erhversus-og Selkabssyrelsen the Court of Justice found that a UK limited company operating in Denmark could not be required to comply with Denmark's minimum share capital rules. UK law only required £1 of capital to start a company, while Denmark's legislature took the view companies should only be started up if they had 200,000 Danish krone (around €27,000) to protect creditors if the company failed and went insolvent. The Court of Justice held that Denmark's minimum capital law infringed Centros Ltd's freedom of establishment and could not be justified, because a company in the UK could admittedly provide services in Denmark without being established there, and there were less restrictive means of achieving the aim of creditor protection. This approach was criticised as potentially opening the EU to unjustified regulatory competition, and a race to the bottom in standards, like in the US where the state Delaware attracts most companies and is often argued to have the worst standards of accountability of boards, and low corporate taxes as a result. Similarly in Überseering BV v Nordic Construction GmbH the Court of Justice held that a German court could not deny a Dutch building company the right to enforce a contract in Germany on the basis that it was not validly incorporated in Germany. Although restrictions on freedom of establishment could be justified by creditor protection, labour rights to participate in work, or the public interest in collecting taxes, denial of capacity went too far: it was an "outright negation" of the right of establishment. However, in Cartesio Oktató és Szolgáltató bt the Court of Justice affirmed again that because corporations are created by law, they are in principle subject to any rules for formation that a state of incorporation wishes to impose. This meant that the Hungarian authorities could prevent a company from shifting its central administration to Italy while it still operated and was incorporated in Hungary. Thus, the court draws a distinction between the right of establishment for foreign companies (where restrictions must be justified), and the right of the state to determine conditions for companies incorporated in its territory, although it is not entirely clear why.

Question: Who was the defendant in Centros Ltd vs Erhversus-og Selkabssyrelsen?

Question: who didn't have to explain its reasons

Question: who can stop companies from going elsewhere

Question: Who was the plaintiff in Centros Ltd v Erhversus-og Selkabssyrelsen?

Question: Which of the following is a currency: krone, the Daily Mail or TFEU?

Question: Which of the following is not a valid reason to restrict freedom of establishment: labour rights, the public interest in collecting taxes, or creditor protection?

Question: Who was the plaintiff in Uberseering BV v. Nordin Construction GmbH?

Question: Which party in Uberseering BV v Nordic Construction GmbH won?

Question: which ruling could not keep a Denmark company from carrying out a contract in Germany

Question: who could stop a company from going to Italy

Question: Which party in R(Daily Mail and General Trust plc) v HM Treasury won?

Question: Which party in Centros Ltd Erhversus-og Selkabssyrelsen won?

Question: Which of the following is not a US state, Delaware or Germany?