Centros Ltd v Erhvervs og Selskabsstyrelsen
A Member State cannot refuse to register a branch of a company formed in another Member State, even if it was formed there only to avoid stricter rules on minimum capital.
Facts
Mr and Mrs Bryde, Danish nationals, formed a company, Centros, in England, where there was no minimum capital requirement for private companies. Centros did not carry on any business in England. They then applied to register a branch of Centros in Denmark, from which it would carry on all its business. The Danish authorities refused, because the purpose was to avoid the Danish minimum capital requirement, so the branch was really the main establishment.
Legal principle
The Court of Justice held that the refusal was contrary to the freedom of establishment. The fact that a national of a Member State who wishes to set up a company chooses to form it in the Member State whose rules of company law seem to him the least restrictive and to set up branches in other Member States cannot, in itself, constitute an abuse of the right of establishment. The refusal could not be justified by the protection of creditors, because creditors were on notice that Centros was an English company, and less restrictive measures were available.
Related cases on freedom of establishment and services
- Alpine Investments BV v Minister van Financiën Case C-384/93, [1995] ECR I-1141
- Carpenter v Secretary of State for the Home Department Case C-60/00, [2002] ECR I-6279
- Cartesio Oktató és Szolgáltató bt Case C-210/06, [2008] ECR I-9641
- Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di Milano Case C-55/94, [1995] ECR I-4165
- HM Customs and Excise v Schindler Case C-275/92, [1994] ECR I-1039
- International Transport Workers' Federation v Viking Line ABP Case C-438/05, [2007] ECR I-10779
- Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd Case C-167/01, [2003] ECR I-10155
- Kohll v Union des Caisses de Maladie Case C-158/96, [1998] ECR I-1931
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