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

In order to guarantee the protection of third parties and ensure certainty in the law as regards relations between the company and third parties, and also between members, the cases in which corporate commitments are invalid and nullity of companies arises are strictly limited by Directive No 2017/1132. Thus, pursuant to Article 7(2), the company is responsible for the commitments taken by its org …

Objective of certainty of legal relationships

In order to guarantee the protection of third parties and ensure certainty in the law as regards relations between the company and third parties, and also between members, the cases in which corporate commitments are invalid and nullity of companies arises are strictly limited by Directive No 2017/1132. Thus, pursuant to Article 7(2), the company is responsible for the commitments taken by its organs when it is being formed and before it has acquired legal personality, if it assumes them. No irregularity in the appointment of its representatives can be relied upon as against third parties unless the company proves that such third parties had knowledge thereof (Article 8). The company cannot either rely on the fact that acts done by its organs are not within the objects of the company, unless such acts exceed the powers that the law allows to be conferred on those organs or the national law provides to the company the possibility to prove that the third parties knew that the act was outside those objects or could not in view of the circumstances have been unaware of it (Article 9). Any conflict of interests between the represented company and its organs falls within the jurisdiction of the national authorities since the directive does not cover that issue .

To ensure that existing situations are stable, automatic nullity is excluded, since the nullity must be ordered by a court of law (Article 11(a)), and the cases of nullity are exhaustively listed: no instrument of constitution or non-compliance either with the rules of preventive control or the requisite legal formalities; the objects of the company are unlawful or contrary to public policy; the instrument of constitution or statutes do not state the name of the company, the amount of subscription of capital, the amount of the capital subscribed or the objects of the company; failure to comply with the provisions of national law concerning the minimum amount of capital to be paid up; incapacity of all the founder members; the number of founder members is less than two. These provisions being strictly interpreted , companies cannot be subject to any other cause of non-existence, absolute nullity, relative nullity or declaration of nullity. Lastly, the rules on nullity do not apply where the formalities for incorporation required by national law have not been completed . Like dissolution, nullity entails the winding-up of the company (Article 12). It does not have the effect of releasing shareholders from payment of the capital subscribed but not paid up. Enforceability to third parties is subject to the publication of the decision ordering the nullity, as provided for in Article 16 of the directive. The effects of nullity between members fall within national law. Where an issuing company disseminates inaccurate information contrary to the law governing capital markets, the cancellation of the share purchase contract can be retroactive .

Case C-104/96 Coöperatieve Rabobank "Vecht en Plassengebied" v Minderhoud [1997] ECR I-7211, LawLex200900000328JBJ.

Case C-106/89 Marleasing v Comercial Internacional de Alimentación [1990] ECR I-4135, LawLex200900000333JBJ.

Case 136/87 Ubbink Isolatie v Dak- en Wandtechniek [1988] ECR 4665, LawLex200900001545JBJ: third parties can legitimately rely on information concerning a company only when that information has been the subject of disclosure in accordance with the rules; moreover, the directive states that where the national law does not provide for preventive control, administrative or judicial, at the time of formation of a company, the instrument of constitution, the company statutes and any amendments to those documents shall be drawn up and certified in due legal form, Directive No 68/151, Article 10.

Case C-174/12 Alfred Hirmann, Judgment of 19 December 2013, LawLex201300001870JBJ.

European Business Law

196. Objective of certainty of legal relationships

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

196. Objective of certainty of legal relationships

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