Some Reflections on Freedom of Establishment of Non-Profit Entities in the EU
Free University of Bozen-Bolzano - CRELE Center for Research in Law and Economics; Free University of Bozen-Bolzano - School of Economics
June 30, 2012
ECGI - Law Working Paper No. 192/2012
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.
Number of Pages in PDF File: 38
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
Date posted: July 22, 2012