A Study Of German Company Existence Threat Liability:Issues Of Practice On Foreign Uropean Union Companies

Via the cases of "Centros","Uberseering" and "Inspire Art",the European Court has eliminated obstacles of the negatives of the free trading among EU companies,which reinforces free trades without compromise companies' nature,or the supervision of the access mechanisms from other member states that impede companies from developing affiliated agencies.Company laws among the EU states might have created several classes.Meanwhile,there would be a discussion of whether the foreign companies from other member states could survive the domestic juristic control.As one of the major economy of EU,Germany is a competitive and appealing state for agencies from other member states,that sparked practical issues like the legitimacy of whether the rules of loaner protection should be used on foreign firms.Company existence threat liability was established with the development of German judicial precedents,in order to make a practical repair on the insufficient of the protective system for loaners in German company law.However,it was arbitrarily redefined from direct responsibilities to tort responsibilities by the German Supreme Court all through the theoretical period to the judicial period,which definition makes such liabilities easier to act on other EU state agencies but more obscure for foreign firms to defend.A basic premise to apply the liability is to strictly follow the EU free trading principles,especially the set of protecting unrestricted establishments by the member states.Any domestic moves violates such principles should not be tolerated.After the Kornhaas case,the scarce attitudinal change of the European Court has brought new hope to the company existence threat liability problem.After solving the problem of whether we could,due to its complexity and its potential of arousing judicial conflicts to apply,it is also important to discuss how we can apply this liability.Company existence threat liability shares common single or multiple features among torts law,bankruptcy law and company law.After several comparative analyses,defining this liability under torts law is more feasible under the German jurisdiction,which minimizes the restrictions of the freedom principle.According to the Kornhaas case,classifying the liability under the torts case should be more appropriate in consideration of the theoretical and juristic rationality when substantive law and freedom principle are observed.