FREEDOM legislation of the State where its

FREEDOM OF MOVEMENT: Seat transfer (Art. 8 of SE
Regulation)Currently if a
corporation is established under the national laws of Germany or England and
registered in that Member State and wishes to perform business activities in
another Member State, it has to be dissolved. With the SE Regulation a company
would have the opportunity to move its seat from one Member State to another
without the process of dissolution. It will not be necessary to wind up the
company in the Member State where the headquarters were originally established
and to re-register the corporation in the Member State where the headquarters
are to be established. With that unified regime the conflict of laws would be
overcome.

 

LOWER COSTS:The SE Regulation
was created to enhance the ease of doing business, cross border mergers and
transfer of registered seat within the European Union. However, corporations
are required to sustain expensive divisions in their business structures and
organizations in order to meet the conditions imposed under national laws of
each Member State. The necessity to establish a costly and complex network of
subsidiaries across the EU governed by different national laws would be done by
a decrease in administrative and legal costs.   DISADVANTAGES: 

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NATIONAL LAWS REFERENCES:One of the
fundamental principles of the SE Regulation is to liberate the concerned
corporations from the different juridical problems and practices of different
legislations of the Member States of the European Union. However, throughout the
Regulation there are many references to national laws and options for a Member
State to choose from. Therefore, how is it possible to have a unified form of
SE when the SE Statute could end up with 20 different alternatives changing
from Member State to Member State? REAL SEAT DOCTRINE:The two basic
doctrines governing the connection of companies to Member States are the Real
Seat doctrine and the Incorporation doctrine. Under the Real Seat principal,
the company must follow the legislation of the State where its actual seat is
situated, in other words the location of central administration. The
Incorporation principal determines the applicable company law by reference to
the country in which the company was incorporated and registered. The company
has the opportunity to continue its activities under the law of the State where
it was originally registered even if the corporation have never operated in
that Member State. The legal status of the company can be determined regardless
of where its activity is happening. One of the requirements of SE Regulation is
that the register office must be where its central administration is, the
Member State in which it has its business operations. Consequently, rules
prohibiting the location of the registered and head office of the company to be
in a different Member State, the SE Regulation restricts the mobility of the
SE.TAXATION:One of the most
important and decisive parts of determining the corporation’s incorporation
jurisdiction is the applicable tax regime. It can be observed that SE
Regulation did not cover taxation issues that might arise. Therefore, setting up
a SE did not provide any clear tax benefits. The SE is treated as any other
multi national company. Furthermore, there is no harmonized European tax system
and SE is subject to the taxes laws of the Member State in which their
administrative office is located.