INTRODUCTION TO PRIVATE INTERNATIONAL LAW
2011/2012
Lecture 5
Dr. Andrzej W. Wiœniewski
General and European Perspective
1. Basic Problems of Regulation of Legal Persons in the International Context
1.1. The concept of a legal person (“moral”, or “juridical” person; “ legal entity”) in the field of conflict of laws; a “company” as a model legal person in international relationships
Treaty on the Functioning of the European Union (TFEU)
as amended by the Treaty of Lisbon (2007)
Article 54. Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.
'Companies or firms' means companies or firms constituted under civil or commercial law, including co-operative societies, and other legal persons governed by public or private law, save for those which are non-profit making.
1.2. The problem of recognition of a legal person
1.3. The notion and scope of the personal statute of a legal person
1.4. Connecting factors: the „creation” (incorporation) theory; the statutory seat; the „real” seat; the place of registration
2. Regulation of the Polish PIL Related to Legal Persons
Chapter 3
Moral Persons and Other Organizational Entities
Article 17.
1. Moral person shall be subject to the law of the country in which it has its seat.
2. If, however, the law specified in paragraph (1) refers to the law of the country according to the law of which the moral person was established, the law of the latter country shall apply.
3. The law specified in paragraphs (1) and (2) shall govern in particular:
1) formation, merger, division, transformation or dissolution of the moral person;
2) legal character of the moral person;
3) the individual name and the business name of the moral person;
4) legal capacity of the moral person;
5) sphere of competence and the rules of functioning as well as the appointing and the dismissing of the members of its organs;
6) rules of the representation;
7) the acquisition and the loss of the status of the shareholder, or of the membership in the moral person, and the rights and obligations connected therewith;
8) responsibility of the shareholders or of the members for the debts of the moral person;
9) legal effects of the breach by a person representing the moral person of the law, articles of association or the statutes.
Article 18.
1. If the moral person shall perform the juridical act within the sphere of its business activity, it shall be sufficient for this person to have the ability to act under the law of the country in which its place of business is situated.
2. Where no restrictions of the ability or representation of the moral person are provided in the country in which the juridical act was made, the moral legal person may rely upon such restrictions under the law designated in Article 17.1 and 17.2 against the other parties only if the other party is aware of them or he did not know about them because of negligence. This provision shall not apply to the juridical acts concerning the alienation of real property in a country other than that where juridical act was performed.
Article 19.
1. After the seat of the moral person has been transferred to another country, the moral person shall be subject to the law of this country since the moment of such transfer. Legal personality obtained under the law of the previous seat shall be maintained, if it is so provided by the law of each of the countries concerned. Transfer of the seat within the European Economic Area shall not lead to the loss of moral personality.
2. The merger of moral persons seated in different countries requires the completion of the requirements specified in the law of all these countries.
Article 20.
The provisions of Article 16 shall apply mutatis mutandis to the protection of personal interests of legal persons.
Article 21.
The provisions of Article 17 to 20 shall apply mutatis mutandis to the organizational entities devoid of the legal personality.
2.1. Art. 17.1: statutory or real seat?
2.2. Art. 17.2: renvoi
2.3. Art. 18: exception in favour of the law of the place of business; treatment of restrictions of capacity
2.4. Art. 19: transfer of the seat
2.5. Art. 21: entities not being legal persons (e.g., in the Polish legal system, commercial partnerships)
3. Conflict of Laws Regulation Versus Freedom of Establishment
3.1. Freedom of establishment under the European law. Cross-border transfer of the seat, cross border mergers and divisions as “establishment” of the company
3.2. Practical results of the application of the „real seat” theory and freedom of establishment
3.3. Leading rulings of the ECJ (Daily Mail, 1988; Centros, 1999; Überseering, 2002; Sevic Systems, 2005; Cartesio, 2008) and the results thereof: green light for company immigration (Überseering) and cross-border merger (Sevic); differentiated treatment of company emigration (Cartesio)
Überseering
93. Such objectives cannot, however, justify denying the legal capacity and, consequently, the capacity to be a party to legal proceedings of a company properly incorporated in another Member State in which it has its registered office. Such a measure is tantamount to an outright negation of the freedom of establishment conferred on companies by Articles 43 EC and 48 EC.
Sevic Systems
30. To refuse generally, in a Member State, to register in the commercial register a merger between a company established in that State and one established in another Member State has the result of preventing the realisation of cross-border mergers even if the interests mentioned in paragraph 28 of this judgment are not threatened. In any event, such a rule goes beyond what is necessary to protect those interests.
31. In those circumstances, the answer to the question referred must be that Articles 43 EC and 48 EC preclude registration in the national commercial register of the merger by dissolution without liquidation of one company and transfer of the whole of its assets to another company from being refused in general in a Member State where one of the two companies is established in another Member State, whereas such registration is possible, on compliance with certain conditions, where the two companies participating in the merger are both established in the territory of the first Member State.
Cartesio
110. […] [A] Member State has the power to define both the connecting factor required of a
company if it is to be regarded as incorporated under the law of that Member State and, as
such, capable of enjoying the right of establishment, and that required if the company is to be
able subsequently to maintain that status. That power includes the possibility for that Member
State not to permit a company governed by its law to retain that status if the company intends
to reorganise itself in another Member State by moving its seat to the territory of the latter,
thereby breaking the connecting factor required under the national law of the Member State of
incorporation.
111. Nevertheless, the situation where the seat of a company incorporated under the law of
one Member State is transferred to another Member State with no change as regards the law
which governs that company falls to be distinguished from the situation where a company
governed by the law of one Member State moves to another Member State with an attendant
change as regards the national law applicable, since in the latter situation the company is
converted into a form of company which is governed by the law of the Member State to which
it has moved.
112. In fact, in that latter case, the power referred to in paragraph 110 above, far from
implying that national legislation on the incorporation and winding-up of companies enjoys
any form of immunity from the rules of the EC Treaty on freedom of establishment, cannot, in
particular, justify the Member State of incorporation, by requiring the winding-up or
liquidation of the company, in preventing that company from converting itself into a company
governed by the law of the other Member State, to the extent that it is permitted under that
law to do so.
113. Such a barrier to the actual conversion of such a company, without prior winding-up or
liquidation, into a company governed by the law of the Member State to which it wishes to
relocate constitutes a restriction on the freedom of establishment of the company concerned
which, unless it serves overriding requirements in the public interest, is prohibited under Article 43 EC (see to that effect, inter alia, CaixaBank France, paragraphs 11 and 17).
Ruling: As Community law now stands, Articles 43 EC and 48 EC are to be interpreted as not precluding legislation of a Member State under which a company incorporated under the law of that Member State may not transfer its seat to another Member State whilst retaining its status as a company governed by the law of the Member State of incorporation.
See also full texts of the quoted awards (accessible in the Internet)