Business Organizations
description
Transcript of Business Organizations
Business Organizations
• Reasons for comparative study– Sensitize to own business forms– Identify universal “truths” – Basis for reforms (LLCs, auditors)– Imperative of business globalization
• Civilian business organizations– Types – Rules (mandatory / default)– Protections
Business Organizations
You are in-house counsel for Nanosoft Corporation, a US technology business incorporated in Delaware. Your company plans to manufacture miniature computers and sell them in Europe and Latin America. You must structure the new operations.
What do you do?
Business Organizations
Is there a “company law” of Europe?
Latin America?
Are there civilian patterns for
business organizations?
Business Organizations
European Community• Art. 54(3)(g) of Treaty of Rome
– Harmonization– Protection of members / third
parties
• Company law directives– History– Topics– Future
• Company law regulations
Business OrganizationsFirst Council Directive 68/151/EEC Second Council Directive 77/91/EECThird Council Directive 78/855/EECFourth Council Directive 78/660/EECSixth Council Directive 82/891/EECSeventh Council Directive 83/349/EECEighth Council Directive 84/253/EECEleventh Council Directive 89/666/EECTwelfth Council Directive 89/667/EECDirective 2001/86/ECDirective 2003/58/EC
Council regulation (EEC) 2137/85Regulation (EC) 2001/2157
What do you notice about the directives?
What are regulations?
What topics?
Business Organizations1st Directive (1968) “protect interests of members / others”
2nd Directive (1977) “formation / capital maintenance of public companies”
3rd Directive (1978) “notice / consultation for mergers of public companies”
4th Directive (1978) “publication of annual accounts of companies”
6th Directive (1982) “division of public companies”
7th Directive (1983) “consolidated accounts for company groups”
8th Directive (1984) “approval of statutory auditors of public companies”
11th Directive (1989) “disclosure by branches of EC companies”
12th Directive (1989) “single member private companies”
Directive (2001) “supplement to statute on SE”
Directive (2003) “disclosure by companies”
Regulation (1985) “European Economic Interest Grouping (EEIG)”
Regulation (2001) “statute for European company (SE)”
Business Organizations
Controversial topics• Corporate governance: board structure (unitary / two-tier)
– Proposed Fifth Directive– Local option in SE (2001)
• Takeovers: substantive (detailed) regulation or disclosure– High level group report (2002)– Level playing field, equitable mandatory price, rights after
successful bid• Internal affairs doctrine (company law determined by place
of incorporation– Centros (ECJ 1997), Überseering (ECJ 2000)– Proposed 14th directive on transferring registered office
Business Organizations
Civil law heritage• “Company” as private association of two or more
persons– Law merchant (partnership)– Separate personality– Distinction - formation / monopoly– One person company?
• State recognition, not creation
What kinds of companies?
Business Organizations
Business Organizations
A. sociedad anónimaB. sociedad cerradaC. sociedad colectivaD. sociedad en comandita
(sociedad comanditaria)E. sociedad de empresas
(en participación)F. sociedad de inversiones G. sociedad de responsabilidad limitadaH. sociedad filialI. sociedad matrizJ. sociedad por accionesK. sociedad pública (corporación)L. sociedad unipersonal
US equivalent?
Business Organizations
A. sociedad anónimaB. sociedad cerradaC. sociedad colectivaD. sociedad en comandita
(sociedad comanditaria)E. sociedad de empresas
(en participación)F. sociedad de inversiones G. sociedad de responsabilidad limitadaH. sociedad filialI. sociedad matrizJ. sociedad por accionesK. sociedad pública (corporación)L. sociedad unipersonal
US equivalent?
__ corporation
__ closed corporation
__ general partnership
__ government agency
__ limited partnership
__ joint venture
__ individual corporation
__ investment company
__ limited liability company
__ parent company
__ subsidiary company
Business Organizations
A. sociedad anónimaB. sociedad cerradaC. sociedad colectivaD. sociedad en comandita
(sociedad comanditaria)E. sociedad de empresas
(en participación)F. sociedad de inversiones G. sociedad de responsabilidad limitadaH. sociedad filialI. sociedad matrizJ. sociedad por accionesK. sociedad pública (corporación)L. sociedad unipersonal
US equivalent?
AJ corporation
B closed corporation
C general partnership
K government agency
D limited partnership
E joint venture
L individual corporation
F investment company
G limited liability company
I parent company
H subsidiary company
Business Organizations
Business Organizations
Where does one find the rules that govern companies?
–civil code–commercial code–company statutes
Business Organizations
Where does one find the rules that govern companies?
–civil code (partnerships, personal)–commercial code (limited liability)–company statutes (specialized)
Business Organizations
What is “hub and spoke” structure of civilian business organizations?
Business Organizations
Non-business associations • Political, charitable, cultural• History
– Not recognized in early codes– German Civil Code (association right)– Creature of state (but later recognized as
fundamental human right)
• Modern codes– Switzerland: informality of non-profit– Registration not necessary
Business Organizations
Protective philosophy• Capital structure (formation)
– Minimum paid-in capital– Proper consideration– Condition to registration
• Distributions– Capital maintenance rules– Reserve accounts
• Statutory auditor– Protection of minority shareholders, creditors– Regulation of qualifications, independence
Business Organizations
How is this handled in the United States?
• Capital formation• Limits on distributions• Supervision of governance, financials
Business Organizations
paterfamilias (pay-tuhr-fuh-MIL-ee-uhs) noun The male head of a family or a household; father figure.
[From Latin paterfamilias (father of the household), from pater (father) + familias, from familia (household), from famulus (servant, slave).]
The feminine equivalent of the word is materfamilias.
Business Organizations
What explains the difference in protective mechanisms in Europe and the US?
Business Organizations