Business Law
Lesson 3
Dr. Gabriella Gimigliano
gimigliano2@unisi.it
Undertaking/Company
Undertaking = The concept of undertaking
covers every entity engaged in an economic
activity, regardless of the legal status of the
entity and the way in which it is financed.
Company = means companies or firms formed
under civil or commercial law, including
cooperative societaties, or other legal persons
governed by public or private law, save for those
which are non-profit making. (art. 54.2 TFEU)
Undertaking/Company
What is the relationship between the concept
of undertaking and the concept of company?
The company is one the organizations suitable
to providing an undertaking. However, the
undertaking may be formed also by several legal
persons/companies which are acting as a single
economic unit, by legal and natural persons, by
natural persons.
Undertaking/Company
(Art.49.1 TFEU) Within the framework of the
provisions set out below, restrictions on the
freedom of establishment of nationals of a
Member State in the territory of another
Member State shall be prohibited. Such
prohibition shall also apply to restrictions on the
setting-up of agencies, branches or subsidiaries
by nationals of any Member State established in
the territory of any Member State.
Undertaking/Company
(Art. 49.2 TFUE) Freedom of establishment shall
include the right to take up and pursue activities
as self-employed persons and to set up and
manage undertakings, in particular companies
or firms within the meaning of the second
paragraph of art.icle 54, under the conditions
laid down for its own nationals by the law of the
country where such establishment is effected,
subject to the provision of the Chapter relating
to capital.
Undertaking/Company
(Art. 55 TFEU) Member States shall accord
nationals of the other Member States the same
treatment as their own nationals as regards
participation in the capital of companies or firms
within the meaning of article 54, without
prejudice to the application of the other
provisions of the Treaties.
Undertaking/Company
(art. 50.1 TFEU) In order to attain the freedom of
establishment as regards a particular activity,
the European Parliament and the Council acting
in accordance with the ordinary legislative
procedure and after consulting the Economic
and Social Committee, shall act by means of
directives.
Undertaking/Company
Why did we employ the definition of
«undertaking» in competition jurisprudence to
figure out the main principles of company law?
Because also the EU company law has a procompetitive objective. The creation of an
internal market, removing any obstacles to the
free movements of goods, persons, services and
capital, was one of the means of spurring the
economic development and growth.
Harmonisation and Delaware Effect
«The main reason for this (harmonisation of
company law) was to provide equal protection
to shareholders and third parties, including
creditor. The motive not mentioned (…) was to
prevent competition between legal systems».
Delaware Effect = it means the risk that every
Member State would aim to provide the most
favorable legislation to lead companies to
establish their registered office in its own
territory. France vs Netherlands!