A Proposal for Reforming Group Law in the European Union - Comparative Observations on the Way Forward

39 Pages Posted: 11 Oct 2016 Last revised: 24 Oct 2016

See all articles by Peter Böckli

Peter Böckli

Böckli Bodmer & Partners

Paul L. Davies

University of Oxford- Faculty of Law

Eilis Ferran

University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)

Guido Ferrarini

University of Genoa - Law Department and Centre for Law and Finance; European Corporate Governance Institute (ECGI)

José M. Garrido Garcia

International Monetary Fund (IMF); University of Castilla-La Mancha (Spain)

Klaus J. Hopt

Max Planck Institute for Comparative and International Private Law; European Corporate Governance Institute (ECGI)

Adam Opalski

University of Warsaw - Faculty of Law and Administration

Alain Pietrancosta

Sorbonne Law School

Markus Roth

University of Marburg - Faculty of Law

Rolf Skog

Göteborg University - Department of Law

Stanislaw Soltysinski

Komisja Kodyfikacyjna Prawa Cywilnego; Sołtysiński Kawecki & Szlęzak, Legal Advisors

Jaap W. Winter

Vrije Universiteit Amsterdam; University of Amsterdam; Insead

Martin Winner

Vienna University of Economics and Business - Department of Business Law

Eddy Wymeersch

Ghent University - Financial Law Institute; ECGI

Date Written: October 8, 2016

Abstract

The legal regime applicable to groups of companies in the European Union has been discussed for many years. National legislations have been adopted in a certain number of member states, and new initiatives are being considered by the European Commission and in academic writing. The central issues in groups of companies is the relationship between the controlling shareholder, often the parent company and the subsidiaries, and the potential for abuse to the detriment of the latter’s minority shareholders and creditors. Several answers have been formulated, going from a duty of the parent to indemnify the subsidiary for the charges imposed by the parent, to the acceptance of these charges provided they result in some benefit to the subsidiary and provided they do not endanger the subsidiary’s solvency. In a third approach, these issues may be solved by other common company law, e.g. on the basis of the unfair prejudice provisions. With respect to shareholder and creditor protection, a comparative analysis concludes that there is no need for additional regulatory safeguards. The present approaches indicate that group relations are often characterised by conflicts of interest. Therefore, it is proposed to develop a standard for dealing with these, especially under the form of Related Party Transactions. The specific conditions for dealing with intragroup related party transactions are submitted for further discussion.

Keywords: Parent-Subsidiary Relations, Minority and Creditor Protection, Related Party Transactions, European Regulation

Suggested Citation

Böckli, Peter and Davies, Paul L. and Ferran, Eilis and Ferrarini, Guido and Garrido Garcia, José M. and Hopt, Klaus J. and Opalski, Adam and Pietrancosta, Alain and Roth, Markus and Skog, Rolf R. and Soltysinski, Stanislaw and Winter, Jaap W. and Winner, Martin and Wymeersch, Eddy O., A Proposal for Reforming Group Law in the European Union - Comparative Observations on the Way Forward (October 8, 2016). Available at SSRN: https://ssrn.com/abstract=2849865 or http://dx.doi.org/10.2139/ssrn.2849865

Peter Böckli

Böckli Bodmer & Partners ( email )

St. Jakobs-Strasse 41
PO Box 2348
Basel, 4002
Switzerland

Paul L. Davies

University of Oxford- Faculty of Law ( email )

Harris Manchester College
Oxford, OX1 3TD
United Kingdom

Eilis Ferran

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge CB3 9DZ
United Kingdom
+ 44 1223 338335 (Phone)
+ 44 1223 338340 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Guido Ferrarini

University of Genoa - Law Department and Centre for Law and Finance ( email )

Via Balbi, 22
16126 Genova, 16100
Italy
+39 010 209 9894 (Phone)
+39 010 209 9890 (Fax)

HOME PAGE: http://www.clfge.org

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

José M. Garrido Garcia

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

University of Castilla-La Mancha (Spain) ( email )

Toledo 45071
Spain

Klaus J. Hopt

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
D-20148 Hamburg
Germany
+49 40 41 90 02 05 (Phone)
+49 40 41 90 03 02 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Adam Opalski

University of Warsaw - Faculty of Law and Administration ( email )

ul. Wybrzeże Kościuszkowskie 47
Warszawa, 00-347
Poland

Alain Pietrancosta

Sorbonne Law School ( email )

17, rue de la Sorbonne
Paris, IL 75005
France

Markus Roth

University of Marburg - Faculty of Law ( email )

Universitaetsstrasse 6
Marburg, D-35037
Germany

Rolf R. Skog

Göteborg University - Department of Law ( email )

Viktoriagatan 30
Box 650
Göteborg, 40530
Sweden
+46 31 7866990 (Phone)

HOME PAGE: www.law.gu.se

Stanislaw Soltysinski

Komisja Kodyfikacyjna Prawa Cywilnego ( email )

Ujazdowskie Ave. No. 11
Warsaw, 00-950
Poland

Sołtysiński Kawecki & Szlęzak, Legal Advisors ( email )

Wawelska Str. No. 15B
Warsaw, 02-034
Poland

Jaap W. Winter

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam
Netherlands
+31653978419 (Phone)

University of Amsterdam ( email )

Oude Manhuispoort
Amsterdam
Netherlands

Insead ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France

Martin Winner

Vienna University of Economics and Business - Department of Business Law ( email )

Welthandelsplatz 1
Vienna, A-1020
Austria

Eddy O. Wymeersch (Contact Author)

Ghent University - Financial Law Institute ( email )

Universiteitstraat 4
Gent, B-9000
Belgium
+32 9 264 68 27 (Phone)
+32 9 264 68 55 (Fax)

HOME PAGE: http://www.law.ugent.be/fli

ECGI ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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