The Costs of Separation: Friction between Company and Insolvency Law in the Single Market

44 Pages Posted: 13 Feb 2014 Last revised: 15 Feb 2014

See all articles by Carsten Gerner-Beuerle

Carsten Gerner-Beuerle

University College London - Faculty of Laws; European Corporate Governance Institute (ECGI)

Edmund Schuster

London School of Economics - Law School

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Date Written: February 10, 2014


Corporate mobility and choice of law within the EU has dominated much of the academic writing in European company law over the last decades. What has not yet received much attention is the way in which national company law interacts with and depends on features of the national legal system outside of company law. In this article we explore this interaction and its relevance for coherent national regulatory systems.

Using the regulatory framework for companies in the ‘vicinity of insolvency’ as an example, we show how choice of company law can create both regulatory gaps and multiplication of legal requirements, as private international law rules are applied inconsistently across Europe. More importantly, however, we show that even consistent application of conflicts rules would fail to resolve these problems due to cross-doctrinal interdependence within any national legal system.

We conclude that this is a design flaw in the way EU law deals with the increasingly international reach of corporations, and discuss possible paths for resolving or mitigating this issue.

Suggested Citation

Gerner-Beuerle, Carsten and Schuster, Edmund-Philipp, The Costs of Separation: Friction between Company and Insolvency Law in the Single Market (February 10, 2014). LSE Legal Studies Working Paper No. 6/2014, Available at SSRN: or

Carsten Gerner-Beuerle (Contact Author)

University College London - Faculty of Laws ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Edmund-Philipp Schuster

London School of Economics - Law School ( email )

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