Case Law of European Union and its Impact on the Regulation of Recognizing Legal Capacity of Legal Persons

Abstract

Nowadays, the European Union has faced significant difficulties associated with the creationof a uniform mechanism for determining the personal law (Statute) of legal entities, i.e. singlecollision bindings to the personal statutes of companies. Attempts to achieve convergence andharmonization of national legislations in this matter have not yet been crowned with success. Thepurpose of this study is to analyze the provisions applied in the countries of the Union, the criteriafor determining the personal law of legal persons, as well as judicial practice aimed at the gradualapproximation, harmonization and leveling of contradictions in various legal systems. In the article,using a comparative method of research, a detailed analysis of the norms of international treatiesand the case law of the Court of the European Union regulating the recognition of legal personalityof legal persons was carried out. The following conclusions are drawn as a result of the developmentof the case law of the Union: the movement of both the statutory and actual location of the companyis allowed under law of the Union; establishing company in a state with a more liberal corporateregime is not an abuse of the institution’s freedom, even if it serves to circumvent the norms ofanother member state in which all the company’s activities will be carried out; is also not an abuse ofthe performance of activities not at the place of registration but at the location of the branch of thecompany; the receiving state is obliged to recognize that a foreign company conducts its activitieson its territory, to recognize its legal personality, the settlement theory in this case does not work; thehost State can not prohibit a transnational merger and its registration in its registry, if such registrationis allowed when merging national companies; the company may move its statutory or actual locationto another state without loss of legal personality under the law of the state of creation; the issue ofthe possibility of maintaining legal capacity and the law applicable to the company (state of creation)when moving to a foreign state is decided by the state of creation itself, which in this case has theright to prohibit or restrict such movement; if the company intends to change the applicable law andtake the legal form of the company provided in the receiving state, the state of establishment cannotprohibit the migration of the company and oblige it to be liquidated, provided that such a migration isallowed by the receiving state.