Some Reflections on Freedom of Establishment of Non-Profit Entities in the EU

38 Pages Posted: 22 Jul 2012

See all articles by Stefano Lombardo

Stefano Lombardo

Free University of Bozen-Bolzano - CRELE Center for Research in Law and Economics; European Corporate Governance Institute (ECGI); Free University of Bozen-Bolzano - Faculty of Economics and Management

Date Written: June 30, 2012

Abstract

This article deals with the exclusion of non-profit-making entities from the right of freedom of establishment of Articles 49 and 54 TFEU. The article analyses the historical reasons for this exclusion. It is argued that the exclusion from freedom of establishment is no longer justified on the basis of two elements. Firstly, the development of the jurisprudence of the European Court of Justice in the fields of competition law, free movement of capital and tax law makes such exclusion systematically no longer tenable. Secondly, a law and economics treatment of non-profit firms as organisations that efficiently provide goods and services in alternative to for-profit firms weakens the reasons for the exclusion. The article proposes a uniform, European notion of non-profit entity based on a law and economics analysis of this type of firm for the purposes of Article 54 TFUE as opposed to possible different national notions. The article then analyses briefly the hypothesis of regulatory competition among jurisdictions for the provision of the law regulating the corporate governance of non-profit entities.

Keywords: non-profit firms, but lucratif, foundations, associations, freedom of establishment, competition law, tax law, regulatory competition, USA, EU, corporate governance, agency problems, agency costs

Suggested Citation

Lombardo, Stefano and Lombardo, Stefano, Some Reflections on Freedom of Establishment of Non-Profit Entities in the EU (June 30, 2012). ECGI - Law Working Paper No. 192/2012, Available at SSRN: https://ssrn.com/abstract=2115107 or http://dx.doi.org/10.2139/ssrn.2115107

Stefano Lombardo (Contact Author)

Free University of Bozen-Bolzano - CRELE Center for Research in Law and Economics ( email )

Free University of Bolzano
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Bolzano, BZ 39100
Italy

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
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1000 Brussels
Belgium

Free University of Bozen-Bolzano - Faculty of Economics and Management

Piazza Universita
Bolzano-Bozen (BZ), 39100
Italy
+39 0471 013491 (Phone)

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