Regulatory Competition in Company Law in the European Community: Prerequisites and Limits

The work challenges the commonly accepted idea that the European single market needs a harmonized company law as a precondition for tis correct fucntioning, on the basis of a law and economics comparison with the American situation. The Study critically analyzes the two major reasons advances to justify harmonization–the race to the bottom argument and the standardization argument–on the basis of the regulatory compettion paradigm and concludes that they are basically wrong. Instead of pursuing harmonization fo substantive compnay law, the proposal is to adjust conflict of law rules in favor of the incorporation theory as ruled by the European Couurt of justice in its important Centros-decision of March 1999/ Companies should be granted freedom of establishment and free movement among jurisdictions in the European Union. Contents: EC company law: the state of the art–The theory of regulation and regulatory competition–The American market for corporate charters–The European market for corporate charters–Policy conclusions.