Optional Rather than Mandatory EU Company Law: Framework and Specific Proposals
32 Pages Posted: 19 Jan 2007
Date Written: January 2007
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: Suggested Citation