Eidenmüller, Horst; Engert, Andreas; Hornuf, Lars --- "Incorporating under European Law: The Societas Europaea as a Vehicle for Legal Arbitrage" [2010] ELECD 398; in Pacces, M. Alessio (ed), "The Law and Economics of Corporate Governance" (Edward Elgar Publishing, 2010)

Book Title: The Law and Economics of Corporate Governance

Editor(s): Pacces, M. Alessio

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848448971

Section: Chapter 2

Section Title: Incorporating under European Law: The Societas Europaea as a Vehicle for Legal Arbitrage

Author(s): Eidenmüller, Horst; Engert, Andreas; Hornuf, Lars

Number of pages: 35

Extract:

2. Incorporating under European law:
the Societas Europaea as a vehicle
for legal arbitrage*
Horst Eidenmüller, Andreas Engert and
Lars Hornuf

INTRODUCTION

When Council Regulation (EC) No. 2157/2001 on the Statute for a
European Company (Societas Europaea ­ SE) became effective on 8
October 2004, the first supranational type of company entered the
European stage. After one year, only 16 firms had ventured into the new
territory. The European Company seemed to be the stillborn that many
commentators had predicted. In the following years, however, the SE
refuted the critics. With annual growth rates of around 100 per cent, the
number of European Companies had eventually increased beyond 200 by
April 2008.1 If SE incorporations continue at the same pace, more than a
thousand firms will have chosen this European corporate form by the year
2010.
The SE's growing success raises the question of what is driving SE
incorporations. In this chapter, we argue that legal arbitrage ­ exploiting
differences between the legal rules of different jurisdictions ­ is the primary
motive for managers and shareholders to opt for the SE. Although the SE
Regulation fails to provide a fully-fledged company law regime and refers


* Reprinted with kind permission of European Business Organization Law
Review, 10 (March 2009): 1­33. © 2009 by TMC Asser Press. All rights reserved.
We would like to thank the 26 interview participants without whom this project
would not have been possible. Furthermore, we are indebted to John Armour,
Matthias Dischinger, Andreas Haufler, Tobias ...