Optional rather than Mandatory EU Company Law: Framework and Specific Proposals

Hertig Gerard and McCahery Joseph A
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Hertig Gerard: ETH Zurich.
McCahery Joseph A: Professor of Corporate Governance and Business Entrepreneurship, University of Amsterdam Faculty of Economics and Econometrics; Goldschmidt Visiting Professor of Corporate Governance at the Solvay Business School (Brussels); Professor of Financial Market Regulation, Tilburg University Faculty of Law.

European Company and Financial Law Review, 2006, vol. 3, issue 4, 341-362

Abstract: 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.This article shows 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.

Date: 2006
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DOI: 10.1515/ECFR.2006.015

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