Horizontal and Vertical Regulatory Competition in EU Company Law: The Case of the European Private Company (SPE)

Andrássy Working Paper Series No.28

28 Pages Posted: 8 Aug 2013 Last revised: 16 Aug 2013

See all articles by Martina Eckardt

Martina Eckardt

Andrássy University Budapest

Wolfgang Kerber

University of Marburg - School of Business & Economics

Date Written: May 8, 2013

Abstract

Since the Centros decision of the European Court of Justice in 1999, the regime of corporate laws in Europe has evolved in a fundamental way. Although it is rather incomplete and imperfect, a two-level system of corporate laws has emerged. It is characterized by a considerable degree of free choice of law. This opens up the possibility of horizontal regulatory competition between the company laws of the Member States. With the draft regulation on the European Private Company (SPE) an additional legal form tailored to the needs of small and medium-sized enterprises (SMEs) is proposed. We analyse whether the introduction of such a supranational European legal form for limited liability companies can be recommended from the perspective of the economic theory of legal federalism. To this end we present a general theoretical framework for studying centralisation/harmonisation vs. decentralisation of legal rules and regulations in regard to company laws within the European Union. Our analysis of the empirical evidence on horizontal regulatory competition as well as on the advantages and problems of the introduction of such an additional legal form for SMEs shows clearly that it might render many benefits without considerable disadvantages when compared with the existing situation of only horizontal competition between the legal forms of the Member States.

Keywords: Company Law, Corporate Governance, Regulatory Competition, European Integration

JEL Classification: F15, K22

Suggested Citation

Eckardt, Martina and Kerber, Wolfgang, Horizontal and Vertical Regulatory Competition in EU Company Law: The Case of the European Private Company (SPE) (May 8, 2013). Andrássy Working Paper Series No.28. Available at SSRN: https://ssrn.com/abstract=2307427 or http://dx.doi.org/10.2139/ssrn.2307427

Martina Eckardt (Contact Author)

Andrássy University Budapest ( email )

Pollack Mihály tér 3
Budapest, 1088
Hungary
+36 1 266 4408 (Phone)
+36 1 266 3099 (Fax)

HOME PAGE: http://www.andrassyuni.hu/

Wolfgang Kerber

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany
+49 6421 2823921 (Phone)

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