Tutorial 6 - Crossborder conduct: freedom of establishment & migration
Theories
Real seat theory: company matters are governed by the nationa law of the place of the head
office of the business. Uberseering case: abolished the real seat theory in inbound migration.
Is it also abolished for outbound migration? Daily mail and cartesio the court didnt abolish it if
you... Valer: outbound migration, real set is abolished when we transfer the real seta and the
head office. If you only transfer the head office then real seat theory still applies.
Outbound migration is a matter of the perspective of the homestate (state where you move
away from)
Inbound migration is the perspective of the host state (state where you move to)
Incorporation theory: company matters are governed by the national law of the place of the
firm’s incorporation, which wil usually correspond to its registered office
Freedom of establishment
- Setting up a company out of the blue in another MS. This is possible (art. 49 TFEU)
- Setting up a subsidiary or branch in another MS is possible following from the
Centros case. The 11th Directive and cases Centros and Inspire Art are about
branches. A subsidiary is a company on its own. A branch is a part of the company.
- Moving an existing company to another MS
● Moving the headquarters (Daily Mail, Uberseering, Cartesio)
● Moving the headquarters and registered office (crossborder conversion, Vale)
registered office is the place where you register the company. Headquarters is where
the management of the company is.
- Crossborder merger
Daily mail was about outbound migration. An outbound transfer of the headquarters does not
fall under the scope of articles 49/54 TFEU (freedom of establishment).
Companies are creatures of national law, and they must comply with restrictions imposed by
the national law of the MS in which they are formed.
Centros was about inbound migration. A refusal to register a branch of a company duly
established in another MS is contrary to articles 49/54 TFEU.
Choice for the least restrictive jurisdiction but there may be no abuse.
That does not prevent the authorities of the MS concerned from adopting any appropriate
measure for preventing or penalising fraud (Gebhard)
- non discriminatory
- public interest
- suitable for securing the objective
- proportional
Uberseering was about inbound migration. If a company is duly established by the law of a
MS, it is entitled to rely on freedom of establishment. The host state has to recognize the
legal capacity and the capacity to be a party to legal proceedings of the company.
Inspire Art is about inbound migration. It’s contrary to article 49/54 TFEU for a MS to impose
on the exercise of freedom of secondary establishment in that state by a company formed in
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