General principles of EU corporate and insolvency law

In advanced capitalist countries, economic activities are predominantly run through legal entities called ‘companies’ or ‘corporations, whose members are not personally liable for the business’ debts. All jurisdictions provide for special rules, departing from general contract and tort law, aimed at regulating companies’ internal affairs and their distress. Over more than 40 years, the European Union (formerly the European Community) has enacted a large number of directives aimed at harmonising company law rules across Member States. These directives address issues ranging from companies’ formation and their financial structure to specific corporate transactions, such as capital amendments, mergers, and divisions. These harmonising measures are based on provisions of the Treaty that allow actions aimed at repealing restrictions to freedom of establishment and at approximating Member States’ laws in order to create a single market. Regarding corporate distress situations, the European Union has recently approved a directive that aims at harmonising Member States’ rules on restructuring frameworks, while general insolvency law proceedings fall within the competence of Member States. The EU, however, has unified the private international law criterion establishing which Member State is competent to hear and regulate insolvency cases. In particular, the general criterion is the debtors’ centre of main interests, which is ‘the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties’. In this complex scenario, it is therefore worth asking whether general principles of company or insolvency law exist in the EU. It is shown that some common features and a few general principles can be isolated regarding company law, while the answer is much more uncertain regarding insolvency regimes.