European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

The right of establishment which for nationals of the Member States, entails their right to take up and pursue activities as self-employed persons under the same conditions as laid down for the nationals of the Member State of establishment  includes the right for companies to pursue their activities through a subsidiary, a branch or an agency . The Treaty thus envisages two methods of establishme …

Principal or secondary establishment

The right of establishment which for nationals of the Member States, entails their right to take up and pursue activities as self-employed persons under the same conditions as laid down for the nationals of the Member State of establishment  includes the right for companies to pursue their activities through a subsidiary, a branch or an agency . The Treaty thus envisages two methods of establishment: principal establishment and secondary establishment (Art. 49 TFEU). 

The provisions of the Treaty on freedom of establishment are directed at both ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that State, and prohibiting the Member State of origin from hindering the establishment in another Member State of one of its nationals or of a company incorporated under its legislation . The obligation, under Articles 49 and 54 TFEU, to permit a cross-border conversion neither prevents a host Member State from defining both the connecting factor required of a company if it is to be considered as incorporated under its national law and as such capable of enjoying the right of establishment, and the connecting factor required if the company is to be able subsequently to maintain that status, nor from determining the rules governing the incorporation and functioning of the company resulting from the conversion. However, national legislation which enables companies established under national law to convert, but does not allow, in a general manner, companies governed by the law of another Member State to convert to companies governed by national law by incorporating such a company, violates the provisions on the free movement of person and services .

 However freedom of establishment is not confined to the right to create a single establishment within the Union but includes freedom to set up and maintain, subject to observance of the professional rules of conduct, more than one place of work within the territory of the Member States . In practice, the usual form of establishment for a legal person will therefore be to set up a secondary establishment, and the undertaking will thus pursue its activity in another Member State through a subsidiary, a branch or an agency . An undertaking of a Member State which maintains a permanent presence in another Member State is regarded as established in that other Member State, even if that presence does not take the form of a branch or an agency, but consists merely of an office managed by the undertaking's own staff or by a person who is independent but authorized to act on a permanent basis for the undertaking, as would be the case with an agency . 

In any case, although each Member State is free to regulate the exercise of a profession in its territory, national legislation cannot require a professional to have only one establishment throughout the EU territory, unless the existence of a second professional residence is likely to be damaging for the exercise of his profession .

Case 270/83 Commission v France [1986] ECR 273, LawLex200900001801JBJ; Case 143/87 Stanton v Inasti [1988] ECR 3877, LawLex200900001551JBJ.

Case 81/87 The Queen v Treasury and Commissioners of Inland Revenue, ex parte Daily Mail and General Trust PLC [1988] ECR 5483, LawLex200900002331JBJ.

Case C-378/10 Legfelsobb Bíróság v VALE Építési kft, Judgment of 12 July 2012, LawLex201200002230JBJ.

Case C-53/95 Inasti v Kemmler [1996] ECR I-703, LawLex200900001033JBJ; Case C-106/91 Ramrath v Ministre de la Justice [1992] ECR I-3351, LawLex200900000334JBJ.

Case C-212/97 Centros [1999] ECR I-1459, LawLex200700001806JBJ.

Case 205/84 Commission v Germany [1986] ECR 3755, LawLex200900001657JBJ.

Case 107/83 Ordre des avocats au barreau des Paris v Klopp [1984] ECR 2971, LawLex200900001465JBJ, considering, for lawyers, that neither the obligation to ensure proper contact with the judicial authorities and with clients nor the observance of the rules of ethics in the host Member State are incompatible with the fact that they maintain chambers in another Member State; see, also, Case C-162/99 Commission v Italy [2001] ECR I-541, LawLex200900000642JBJ, concerning legislation which makes the practice by dentists of their profession subject to the requirement that the persons concerned reside in the district of the professional association with which they seek registration, and which therefore prevents dentists established or residing in another Member State from setting-up a second dental surgery in the territory of the first State.

European Business Law

80. Principal or secondary establishment

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

80. Principal or secondary establishment

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise