The GmbH & Co. KG is the most common ‘hybrid’ type of company in Austria. It consists of a limited partnership (KG) owning the company assets and a private company limited by shares (GmbH) participating as the KG's (usually only) general partner. Typically, the shareholders of the GmbH and the limited partners of the KG are identical, in most cases also holding shares in the same proportion. Contrary to most other forms of business organisation, the GmbH & Co. KG is not a legislative product but has arisen out of practical needs. The main purpose of setting up a GmbH & Co. KG is to combine fiscal advantages of partnerships (i.e., netting the company's profits and losses against the shareholders' other income) with limited liability. Although this hybrid was recognised very early by the courts, the discussion about its legitimacy is still alive. As soon as the tax advantages disappear in comparison to other legal forms, the attractiveness of the GmbH & Co. decreases. A legislator should hesitate to establish a hybrid only to facilitate fiscal benefits; he must prove and secure advantages by civil and corporate law.

This paper seeks to provide an analysis of Commission v. Netherlands, a judgment handed down by the First Chamber of the European Court of Justice (hereinafter, ECJ) on 28 September 2006. Although this is the eighth ruling in the increasing series of so-called Golden Share judgments, it too raises interesting questions concerning the relationship between the holding of special rights or golden shares by the state in a privatised company and the EC Treaty provisions on the free movement of capital.

The first issue which is analysed is the application of Article 56 EC to the situation where golden shares are not created by legislation but within the framework of domestic company law. The ECJ decided that even in such a situation the member state concerned is acting, not as a private shareholder, but as a public authority whose actions fall within the scope of application of Article 56 EC. This approach by the ECJ is applauded firstly because it prevents member states from escaping the reach of Article 56 EC by having recourse to mechanisms of general company law and secondly because it allows the ECJ to avoid the thorny issue of whether Article 56 EC is capable of horizontal direct effect.

The holding of golden shares as a restriction on the free movement of capital is then examined. In this context the expansive interpretation given by the ECJ to the concept of restriction is criticised. Attention is then focused on the justification ground invoked by the Dutch state with regard to the golden share in TPG NV, namely the need to guarantee a universal postal service.

All over Europe, we see drastic changes being made to simplify company law and make it more flexible. A fundamental principle of this reform movement is the freedom of shareholders to determine internal structure and power balance. At the same time, as a consequence thereof, we may see more situations in which minority shareholders at some point may feel trapped. More freedom and flexibility will therefore need to be supplemented with a credible and efficient level of minority protection. Until now, the general approach in Europe (but also to a certain extent in the United States) is that shareholders only have a right to exit through a buy out if the conduct of the controlling shareholder(s) is unfair and/or oppressive. One can doubt whether this provides an acceptable level of protection in terms of efficiency and effectiveness. In this article, it will be submitted that it might be economically sound, as well as efficient, effective and satisfactory from a legal point of view, for the law to go further and award minority shareholders a right to exit the company ‘at will’ provided that (i) a reasonable notice period is observed and (ii) additional costs of financing are taken into account.

This contribution focuses on two themes: the function of private company statutes and their flexibility. It is recognised initially that private company statutes serve economic activities and purposes. In this instrumental role, they contribute to economic welfare. In addition, they have the function to serve legal certainty and to protect the justified interests of persons involved in a private company. This function is designed to promote fairness. Together these functions result in two types of rules in a private company statute: rules serving welfare, which are usually non-mandatory rules, and rules serving fairness, which are usually mandatory. The private company, as the object of these rules, has the internal characteristics of a partnership and the external characteristics of a corporate body. In addition, shareholders are financially and personally deeply involved in the private company and have no easy exit. These characteristics should be determinative for a private company statute. The author puts forward some suggestions for adjustments to the current Dutch proposal for a private company statute.

This article discusses the proposed changes to the capital maintenance regime applicable to the Dutch BV. The draft legislation introduces a liability of directors for unlawful distributions and an obligation for shareholders to repay distributions made to them in the suspect period of one year prior to the opening of bankruptcy proceedings. The current enhanced balance sheet test is replaced with a simple balance sheet test and a liquidity test. With the proposed new rules on creditor protection, the Dutch legislature aims to balance welfare and fairness: the law should not place unnecessary restrictions on company's financing decisions, but at the same time it should offer effective protection to creditors. The draft legislation has been subjected to a consultation process. The reactions to the consultation document show that it is not easy to strike the right balance between the interests of the three parties involved: the shareholders, the directors and the creditors.

This paper describes the current state of implementation of the European Commission's 2003 Action Plan on Modernising Company Law and Enhancing Corporate Governance, as well as how the new Commission revisited and adjusted the Action Plan after it entered office in November 2004. In addition, the paper sketches the outlook for the future development of European company law and corporate governance. It presents the methods and goals of the Commission and, to the extent possible, describes the contours of the concrete measures that are in the works.

After a short historical introduction, this paper argues that corporate mobility remains a real political issue. To clarify matters, it proposes to distinguish between a formal seat transfer, being the choice of a different legal regime, and a de facto seat transfer that would not affect the applicable company law, the host State not being entitled to apply its company law rules. A future directive should be based on this distinction, prescribing the formalities for the former and stating clearly the consequences of the latter, thereby also defining the limits within which the “general good” can be invoked.

In 1998, the British Government started a comprehensive review of company law due to growing concerns regarding the adequacy of the British model of the company and its governance to cope with the reality of the modern corporation and with the competitiveness of the British economy in the context of globalisation. The Company Law Review explicitly acknowledged the economic significance of company law by stating that it needed to be assessed and justified according to its effectiveness in meeting the objective of enabling the competitiveness of British companies. It is in this context that Andrew Griffiths places his analysis of the legal issues arising when a company enters into a contract or other transaction with another party. The author uses an economic analysis to determine whether these rules governing the attribution of contracts to companies are effective in meeting the main goal of company law as identified by the Company Law Review. Also, Griffiths looks at the specific proposals made by the Company Law Review that will affect the law governing contracting with companies and argues that reform has been piecemeal and that there is a case for reforming other areas as well.