Free Law Dissertations - By Reference To The Us Debate On Corporate Regulatory Competition,
By reference to the US debate on corporate regulatory competition, critically examine whether there is regulatory competition in European Corporate Law.
Introduction
Corporate regulatory competition is the phenomenon that arises as a result of freedom to incorporate as a corporate seat in an area outside the location of the real seat. In the US, this playing field of choice is naturally that of each of the individual states where corporate law is designated as a matter for each federal state. By contrast, in the EU the freedom to choose a corporate seat in another Member State that is different from the State of location for the real seat is only a recent development.
This piece will begin by giving a brief overview of the corporate regulatory competition that is very much alive in the USA. This analysis will then be followed by an account of the EU judgements that have, at the very least, made it possible for corporate regulatory competition to become a reality for Governments of all Member States. Finally, with the use of empirical data and examples, it will be determined whether a culture of corporate regulatory competition now really exists for European Corporate Law.
AUS Corporate Regulatory Competition a Brief Introduction and Overview
Kamar writes that it is trite law that companies in the USA are entitled to incorporate in any one of the fifty jurisdictions of the States and Columbia while still conducting their business outside their State of incorporation. From a European perspective, the scope for influence and cross-state corporate law observation is greatly increased on account of the complete absence of language barriers that are integral to an entity such as the EU. This is further exasperated by the relative ignorance of the various legal professions of each Member State for the laws of their neighbours. By contrast, any US attorney specializing in re-incorporation will be extremely professionally qualified to give advice on Delaware corporate law, regardless of the jurisdiction of the attorney.The result in the US is a climate of Corporate Law tailoring where, currently, the most attractive State is Delaware and there is unanimous agreement on this point.
The only area of dispute lies in the notion of whether other US States, in addition to Delaware, also lobby for corporations to set themselves up within their jurisdictions. In other words, the presence of Corporate Regulatory Competition is not a mutually recognised fact. It is however difficult to imagine that this kind of lobbying would not occur considering the fact that there is freedom to do so. Romano addresses this criticism of the existence of a competitive culture that is argued on the basis that there is no evidence of duplication of the Delaware incentives by other States and also that many States have no such interest in attracting incorporation within their borders.
