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Simplification of European Company Law on Financial Assistance

Published online by Cambridge University Press:  30 March 2005

Eilís Ferran
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Abstract

The European Commission has recently announced a proposal to relax the ban on financial assistance by providing a gateway procedure that companies could follow in order to sanitise the granting of financial assistance. This article is unimpressed by the proposal and suggests that adopting it is likely to be a largely pointless exercise. Barring truly exceptional circumstances, no company is ever likely to want to take advantage of the proposed gateway procedure because it is time-consuming, costly, runs the risk of transaction-disrupting minority shareholder actions and exposes directors to excessive personal risks.

Keywords

company lawlegal capitalfinancial assistanceSecond Directivereform
Type
Articles
Information
European Business Organization Law Review (EBOR) , Volume 6 , Issue 1 , March 2005 , pp. 93 - 99
Copyright
© 2005 T.M.C. Asser Press

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