Soon we can expect a new type of company: the European Private Company (Societas Privata Europaea – SPE) aimed at small and medium-sized enterprises in the EU. In this article, we analyse how creditors of future SPEs will be protected. In the first part, we identify on a general level how creditors can be protected. Then we turn to the tools used in the different draft versions of an SPE statute (Commission Draft, EP Draft and Presidency Compromise). As these do not cover all aspects of creditor protection, the next part examines how these gaps ought to be filled. Subsequently, we discuss whether, from a normative perspective, creditor protection in the EU should be further harmonised. Overall, we conclude that what emerges is a mixed picture between various levels of European and national rules. This may not be ideal but it may be the price worth paying in order to reach political agreement on SPE law.

The growth of banks operating across national borders through branches poses problems for the regulatory and supervisory authorities, which are historically organised on a national basis, particularly in relation to their responsibility for financial stability, crisis resolution, deposit insurance and other aspects of the safety net. This article compares and contrasts two solutions to these problems that are being developed: the first by the Nordic-Baltic countries for handling Nordea, which wishes to take advantage of the European Company Statute in the legal framework of the EU/EEA, and the second by New Zealand, where most of the banks are Australian-owned. The first case reflects an attempt at a joint approach and a universalist solution that seeks greater harmonisation, while the second case reflects a territorial approach and the recognition of differences. Both show that there is already a much wider problem that needs to be addressed, even when banks operate across borders through subsidiaries. Halfway houses between internationalisation and renationalisation of responsibility seem rather less plausible routes to success, even if they are couched in terms of careful memoranda of understanding.

The Council of the European Union recently adopted a modified proposal for an EU Directive on takeovers. As a central feature the new proposal contains a provision imposing on the management of a target company a duty of passivity (Neutralitätspflicht) once a public bid for the shares of the target company has been made. This duty of passivity in the face of a hostile offer has been a key feature of the first proposal for an EU Takeover Directive in 1989 and the amended proposals of 1990, 1996, and 1997. It is a central element of the UK City Code on Takeovers and Mergers that from the beginning served as a model for the drafts of the EU Takeover Directive and can still be detected as such in the current proposal. The rule of passivity also found its way into the laws of many Member States that enacted takeover laws in anticipation of the imminent passing of a Takeover Directive. In Germany, a takeover statute is still missing. However, German corporate law scholars widely support the rule of passivity. Moreover, the rule of passivity is already in place in the non-binding German Takeover Code, a non-government voluntary regulation of takeovers to which about 60-70 % of the stock exchange listed companies in Germany have subjected themselves. Finally, the German government this year presented a draft proposal for a German Takeover Act that also contains a duty of passivity. Thus it seems fair to say that until very recently the rule of passivity has been a widely accepted, integral part of European takeover law.

The EC Merger Regulation (ECMR) gives exclusive powers for the EC Commission to regulate large, pan-European mergers under the EC competition laws. The ECMR requires the Commission to declare mergers incompatible with the Common Market if they “create or strengthen a dominant position as a result of which effective competition is impeded”.

In the last two decades there have been many examples of co-operation between national stock exchanges in Europe. However, most of these have been cooperation on a very low scale. Starting in 2000, this pattern seems to have changed. Stock exchanges have committed themselves to “alliances”, or even “mergers”, entailing a co-operation which is far more intensive than most former examples of co-operation. In the last couple of years many such alliances have been formed, some have been dissolved, and even more have been considered.

La Porta et al. have made a number of influential empirical contributions linking the level of investor protection in different countries to the development of capital markets. They find that rules associated with common law are superior in fostering larger and broader capital markets, especially compared to countries based on the French civil law tradition. However, this article argues that the existing methodological approach is problematic when subjected to careful legal analysis based mostly on Scandinavian examples. In particular, one may question the appropriateness of relying on legal indices, as laws by their very nature cannot be stacked like bricks of similar size. Furthermore, it is argued that the notion of investor protection needs to be considered in a consistent, complete and unbiased manner, in which the binary categorisation should be modified. Specifically, due to the ambiguity of formal investor protection rights, it is suggested that the ratio of actual minority votes cast at the general meeting to the total number of minority shares may serve as an alternative proxy for the real degree of investor protection.

The new Limited Liability Company – New Firm Act in Spain is analysed as a compromise between a laissez faire legislature trying to speed up the process of incorporation of companies and lowering legal barriers to entry and interest groups that make a living through the regulation of entry. The substantive review of company contracts by registrars is criticised and some proposals for deregulation are made.

In EBOR 10(1) (2009, pp. 73–95), the Green Paper on a new Danish Companies Act was described in some detail. The Act has now been passed mostly as proposed in the Green Paper, except for some issues in respect of capital maintenance and the transfer of the registered seat of a company. Against this background, the main features of the new Act are explored and the minor differences from the original proposal are explained. It is concluded that although the new Act is now at the forefront of European company law and is especially well-suited to the needs of foreign enterprises and investors, reform is still necessary on a European level.

In November 2011, the European Commission published legislative drafts proposing radical reforms for statutory audits in Europe, fuelling heated political and academic debates. This paper presents cornerstones for a new regulatory framework of auditing and thereby contributes to the ongoing debate on the role of auditors and their independence.

The Nordic countries have traditionally cooperated in different legislative areas, although lately to a lesser extent. The experience with Nordic company law development illustrates particularly well the problems related to harmonisation. Although the difficulties were alleviated by the fact that the harmonisation programme took place on a small scale, with few countries involved and with large similarities in the cultural, social and political environment, many goals could not be achieved. The EU, with its current 28 Member States and their differences, in similar respects, has faced and will continue to face far greater problems. The Nordic countries, and knowledge of their history in this respect, can provide some guidelines for possible solutions regarding harmonisation.

Despite the cooperation in company law, the Scandinavian countries have adopted different regulatory strategies because of political and other factors. Significant differences can be seen in the extent and type of regulation used, but also between countries that use one law for regulating companies and those that use, or have used, separate laws for the regulation of private and public companies. Small company regulation is a highly topical issue in view of the Commission proposal for the SPE.

In conclusion, knowledge of the Nordic countries and their history in harmonisation and small company regulation can provide valuable information for possible solutions.

This issue of EBOR presents to a wider audience the papers and proceedings of a symposium on ‘Efficient Creditor Protection in European Company Law’, which took place from 1 to 3 December 2005 at the premises of the Max Planck Institute in Munich, as a joint venture of Munich’s Ludwig Maximilians University and the Max Planck Institute for Intellectual Property, Competition and Tax Law. As the organisers of this conference, we were proud and delighted that so many outstanding scholars from Europe and the United States agreed to participate, give presentations, make comments and contribute to the discussions, although we had nothing to offer but a lot of preparatory work, uncomfortable winter travel and the prospect of exchanging some views on questions of corporate law reform in our conference room. We would also like to express our gratitude to the Max Planck Society for the Advancement of Sciences for its generous financial support of the conference and this publication.

The corporate landscape of a country comprises the total number and size, overall activity, economic performance, legal form, corporate governance and importance of the companies that operate there. It is dependent, inter alia, on the country's size, population, economic strength, historical development, traditions, stability, stage of development of the legal system and geographic position, as well as a series of other factors. This paper presents the author's views on the current level of development of Croatia's corporate landscape. In order to understand the changes that have taken place in this landscape, it is also necessary to describe the state of the Croatian corporate landscape in 1989, before the transition. It is also important to explain how private companies were established, how foreign direct investment was carried out, the course of privatisation, how bankruptcies were handled and how Croatia's capital markets developed. Taken together, these factors paint a comprehensive picture of the corporate and social landscape in Croatia. After these factors have been analysed, this paper presents on Croatian companies and an overview of corporate governance in Croatia.

During socialist times the socialist enterprises were the basic entities of the socialist economic system. Admittedly, there were also commercial companies in Central and Eastern Europe in this period, but examples tended to be rare. In the form of limited liability companies (owned by the state or by a state entity) they typically served the purpose of facilitating economic exchange with third countries (companies or banks for foreign trade, insurance companies, etc.). In Romania, Hungary, Poland and the GDR, for example, their legal foundations dated from the period in between the World Wars, and partly even from the 19th century. Regulation largely ceased to develop after that time. Bulgaria, to mention another example, abolished – without substitution – its Commercial Code and Act on Private Limited Companies in 1951, dissolved all trading companies and vested in the Ministerial Council the authority to set up companies by the mere approval of their articles of association. In this way, the insurance company Bustrad and the Bulgarian Bank of Foreign Trade were set up in 1961 and 1964 respectively, both of them as public limited companies. Following a number of intermediate steps, of which the State Council's resolution 56/1989 on economic activity deserves special mention, Bulgarian company law was finally recodified in the second part of the commercial code in 1991.

Our honoree, Professor Mestmäcker, in applying Albert 0. Hirschmann's formularization of “exit” and “voice” to company law, places “exit” as a compensation claim under such law (Anspruch auf Abfindung), and clearly points out the difference between the function of public and close companies. Although Japanese company law does not expressly state as much, “exit” means the repayment of one's holdings. As such, in principle, it is impermissible from the standpoint of protecting company creditors. However, in certain circumstances, small shareholders opposing a majority decision may require the company, for their protection, to buy back its shares so they can leave that company (appraisal rights).

This paper analyses the monitoring under competition law of the formation and operation of company groups in Poland. Groups of undertakings, which existed in the centrally planned economy, have been eliminated, or have radically, changed the range of their operations. Reasons for the formation of company groups include: risk management on the emerging market, the creation of common investment funds under the restrictive monetary policy, reduced transaction costs, and the delegation of powers to subsidiaries. The groups operating currently were incorporated through agreements between companies, buy-outs of state enterprises by private investors, acquisitions and outsourcing. The distribution networks form the majority of the agreement-based groups. Sectoral diversification is a characteristic feature of the capital groups and in most cases they are vertically integrated. Polish competition law enables the supervision of agreements between undertakings, acquisitions and buy-outs by private investors. The application of the competition law resulted in the formation of multi-sectoral company groups. The market power of companies and their groups depends not only on their size but also on the size of their relevant markets. Liberalisation of international economic relations results in the elimination of barriers to entry on product and geographic markets, weakening the market power of the domestic market players and developing competition.

Financial groups may be defined as groups in which one or more components, legally independent companies, engage in offering financial services to the public, acting as a bank, a broker, an insurance company, an investment adviser or in any other capacity, offering their services to individuals, professional investment managers or other business firms. Firms that exclusively offer financial services to other group entities – the so-called “in-house banks” would be excluded, as these normally do not receive “deposits or other repayable funds” from the public.