this field.46 Furthermore, the EU Parliament has adopted a non-legislative resolution with recommendations to the EU Commission regarding this subject matter in March 2009.47

In any case, it has to be noted that the conflict-of-laws rule of Art. 10b EGBGB of the Draft remains an empty shell. Up until now, there is no substantive law governing a re-incorporation in Germany, its requirements or its proceedings.

5.1.7  Competition of Corporate Forms—GmbH vs. Limited

5.1.7.1  Competition of Corporate Laws—Some Comments

Following the ECJ’s decisions in Centros, Überseering and Inspire Art, outlined above48, German commentators now agree that the ‘real seat doctrine’can no longer be applied to companies from other EU/EEA Member States. A company’s legal capacity and identity validly established in another EU/EEA Member State must be recognized in all other Member States. However, it remains controversial if and to what extent German national rules protecting specific interests (such as those of creditors and employees) can still legitimately be applied to foreign companies. Furthermore, it is interesting to consider the long-term effects of the ECJ case law on the prospective further harmonization of Member States’law in the EU. In Germany, the ‘real seat doctrine’ had often been justified arguing that it prevented a purported negative competition of laws (‘race to the bottom’). According to this view, under a competition of legal systems, the legal system with the weakest level of protection for certain interest groups (i.e. creditors and employees) would prevail. In this respect, reference was often made to developments in US company law, where the ‘theory of incorporation’ has a long tradition and companies enjoy an almost unrestricted freedom of establishment. When referring to the US experience, German commentators often alleged that, due to the ‘theory of incorporation’, a negative race of legal systems took place in US law. However, given the success story of Delaware, the most popular state for the incorporation of American companies, such skepticism has not been proved by way of empirical investigation. On the contrary, in the US, the bleak prospect of a ‘race to the bottom’ has been confronted by several commentators with the bright vision of a ‘race to the top’.49 For various reasons, Delaware law is considered to be a driving force for progress in US corporate law. For example, Delaware offers a simple and unbureaucratic incorporation process and, with its Court of Chancery, Delaware has established a court system with specialized judges for company law disputes. This specialization and the expertise of the Delaware judiciary ensure legal stability and, in the case of legal disputes, enable an analysis of the risks of litigation and result in faster

46  Report of the Reflection Group on the Future of EU Company Law as of 5April 2011, p. 19.

47  See European Parliament resolution of 10 March 2009 with recommendations to the Commission on the cross-border transfer of the registered office of a company (2008/2196(INI)).

48  See supra, Sect. 5.1.4.

49  See Schulz 2006, pp. 153 et seq.