Optional Rather than Mandatory EU Company Law: Framework and Specific Proposals

32 Pages Posted: 19 Jan 2007

See all articles by Gerard Hertig

Gerard Hertig

ETH Zurich; European Corporate Governance Institute (ECGI)

Joseph A. McCahery

Tilburg University - School of Law; European Banking Center (EBC); Tilburg Law and Economics Center (TILEC); European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: January 2007

Abstract

A significant debate rages within the EU about whether to give firms the choice to opt in or out of corporate law provisions. Both sides agree that more flexibility and adaptability of legal rules to business needs is crucial. Nevertheless, and not surprisingly, many still view EU mandatory harmonization efforts as an opportunity to upgrade Member State corporate law.

We argue that bringing options to the forefront of EU company law may significantly reduce costs for small and medium-sized firms and provide clear benefits to public companies. With respect to implementing such a regime, we advocate the step-by-step adoption of legal options, beginning with the implementation of a limited number of specific EU provisions that firms can select as an alternative to the corresponding Member State statutory or case law.

Keywords: company law, default rule, harmonization, legal options, menu provisions, opt-in, opt-out, regulatory competition

JEL Classification: F15, G38, K22, L22

Suggested Citation

Hertig, Gerard and McCahery, Joseph A., Optional Rather than Mandatory EU Company Law: Framework and Specific Proposals (January 2007). ECGI - Law Working Paper No. 78/2007. Available at SSRN: https://ssrn.com/abstract=958247 or http://dx.doi.org/10.2139/ssrn.958247

Gerard Hertig (Contact Author)

ETH Zurich ( email )

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Switzerland
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+4144-632-1097 (Fax)

HOME PAGE: http://www.hertig.ethz.ch

European Corporate Governance Institute (ECGI)

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

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

Joseph A. McCahery

Tilburg University - School of Law; European Banking Center (EBC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands
+31-(0)13-466-2306 (Phone)
+31-(0)13-466-2323 (Fax)

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

European Corporate Governance Institute (ECGI)

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

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

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