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Will There Ever Be a Delaware of Europe?


Patrick S. Ryan


Catholic University of Leuven (KUL) - Interdisciplinary Center for Law and Information Technology (ICRI); Google Inc.; University of Colorado at Boulder, Interdisciplinary Telecommunications Program


Columbia Journal of European Law, Vol. 11, p. 187, Winter 2004/2005

Abstract:     
The European Union (EU) does not yet have the U.S. equivalent of Delaware; that is, the EU does not yet have a place where it is fairly common to incorporate, regardless of where business is done. Recently, there has been much debate among European states (and legal scholars) in the corporate law field regarding the possible emergence of a "Delaware of Europe." Some European countries have overtly fought a trend towards this possibility by passing local laws that make it difficult to establish a branch or subsidiary company in a location outside the country of origin. In response, the European Court of Justice (ECJ) has heard several cases that have progressively limited the ability of individual countries to restrict the establishment of companies, agencies, branches, and subsidiaries in other European countries. On September 30, 2003, the ECJ delivered its latest blow to countries that have put in place prohibitive regulations regarding incorporation with its decision in the case Inspire Art. This judgment is consistent with the ECJ's jurisprudence on the matter of corporate headquarters and subsidiaries, beginning with Daily Mail, continuing with Centros, and peaking with Uberseering. Daily Mail pertained to a so-called "outbound" case, and Uberseering and Centros dealt with so-called "inbound" cases.

All three cases were decided in the context of "freedom of establishment" from Article 43, paragraph 1, of the European Community Treaty (hereinafter EC), which, read together with Articles 46 and 48 EC, grants great leeway to European corporations that want to move about within the Community.

In this short Case Note and Commentary, we will analyze the development of the ECJ case law as it led to the development of the 2003 ECJ decision Inspire Art. In so doing, we shall review the underlying theories and principles that govern the different legal treatments of European companies when they choose to establish subsidiaries or branches in other European countries.

Number of Pages in PDF File: 15

Keywords: Inspire Art, Uberseering, Grundungstheorie, sitztheorie, centros, delaware of europe, european union, article 43, freedom of establishment

JEL Classification: K10

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Date posted: August 1, 2005  

Suggested Citation

Ryan, Patrick S., Will There Ever Be a Delaware of Europe?. Columbia Journal of European Law, Vol. 11, p. 187, Winter 2004/2005. Available at SSRN: http://ssrn.com/abstract=763164

Contact Information

Patrick S. Ryan (Contact Author)
Catholic University of Leuven (KUL) - Interdisciplinary Center for Law and Information Technology (ICRI) ( email )
Tiensestraat 41
Leuven, B-3000
Belgium
303-835-3574 (Phone)
303-265-9737 (Fax)
Google Inc. ( email )
1600 Amphitheatre Parkway
Second Floor
Mountain View, CA 94043
United States
303-835-3574 (Phone)
University of Colorado at Boulder, Interdisciplinary Telecommunications Program ( email )
Interdisciplinary Telecommunications Program
Boulder, CO 80309
United States
303-835-3574 (Phone)
303-265-9737 (Fax)
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