European Company Law in 2020: Mobility and Sustainability

1. 2019: AN IMPORTANT YEAR FOR COMPANY LAW Looking back at the end of December 2019 I conclude that this year was an important year for European company law. After publication of the EU Company Law Package in April 2018, the Directive on the use of digital tools and processes and the Directive on cross-border operations were adopted in 2019. As stated in other Editorials in this journal, the first proposal with its narrow definition of ‘digitalization’ was not ambitious enough whereas the second proposal could in some respects be characterized as overambitious. That surely does not relate to one missing topic in the Company Law Package, i.e. conflict of law rules, which has been described as ‘a big hole, rendering it incomplete in a very important aspect.’ However, I believe the European Commission made a wise decision not to include these rules in the package. Not only would adoption then have become evenmore difficult and probably impossible, applying ECJ-case law on freedom of establishment uncertainty in practice is nowadaysmostly the result of uncertain national laws and less because of lack of harmonization. Member States are free to determine the connecting factors and should respect each other’s choices. Since it will be more and more difficult to determine where the real seat of an internationally operating company is located, harmonization will probably follow bottom-up over time into the direction of the incorporation theory. After Überseering, e.g. Germany changed to the incorporation theory and Belgium followed in 2019. In any case, in light of the topic – cross border conversions, mergers and divisions all in one directive – and the numerous weaknesses, e.g. the provision on ‘artificial arrangements’, especially the adoption of the proposal for cross-border operations the next year is a big achievement of the European legislator. After – too – many years, the internal market will finally have harmonized and similar rules for the three operations. For Member States 2019 also meant the deadline for implementing the Revised Shareholder Rights Directive and the impact on national laws was in many cases probably bigger than the implementation of the original Directive. Although I have put forward some criticism on the three proposals on several occasions (mainly in Dutch journals), as a European law professor I am happy that after years of lack of ambition from the European Commission in the field of company law, the train is finally running again!