Opinion of the Advocate General — ECLI:EU:C:2007:92
Date: 2007-02-13
Language of the case: German
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment;Free movement of capital
Procedure: Action for failure to fulfil obligations - successful;Action for failure to fulfil obligations - unfounded
Origin: Germany

Summary of the Judgment Free movement of capital – Restrictions – Company law (Art. 56(1) EC) A Member State which maintains in force legislation which, in derogation from ordinary company law, combines a limitation of the voting rights of every shareholder in a given company to 20% of that company’s share capital with the requirement of a majority of over 80% of the company’s capital for the adoption of certain decisions by the general assembly, and which, in derogation from the general law, allows a Member State and a territorial entity of that State each to appoint two representatives to the company’s supervisory board, fails to fulfil its obligations under Article 56(1) EC. The fixing of the threshold of the required majority at more than 80% of the capital, being a requirement derogating from general law and imposed by way of specific legislation, affords any shareholder holding 20% of the share capital a blocking minority and in this case creates an instrument enabling the public authorities to procure for themselves a blocking minority allowing them to oppose important resolutions, on the basis of a lower level of investment than would be required under general company law. By capping voting rights at the same level of 20%, the specific legislation supplements a legal framework which enables the said public authorities to exercise considerable influence on the basis of such a reduced investment. By limiting the possibility for other shareholders to participate in the company with a view to establishing or maintaining lasting and direct economic links with it which would make possible effective participation in the management of that company or in its control, such a situation is liable to deter direct investors from other Member States, thereby diminishing the interest in acquiring a stake in the capital of that company and thus constituting a restriction on the movement of capital. The same applies to the right to appoint two representatives to the company’s supervisory board, being a specific right, in derogation from general company law, laid down by a national legislative measure for the sole benefit of the public authorities. By enabling those authorities to participate in a more significant manner in the activity of the supervisory board than their status as shareholders would normally allow, that measure thus establishes an instrument which gives the public authorities the possibility of exercising influence which exceeds their levels of investment. (see paras 43-46, 50-52, 54, 56, 59, 61-62, 64, 66, 68, 82, operative part)