This paper describes the current state of implementation of the European Commission's 2003 Action Plan on Modernising Company Law and Enhancing Corporate Governance, as well as how the new Commission revisited and adjusted the Action Plan after it entered office in November 2004. In addition, the paper sketches the outlook for the future development of European company law and corporate governance. It presents the methods and goals of the Commission and, to the extent possible, describes the contours of the concrete measures that are in the works.

This article examines the historical, doctrinal and theoretical bases of shareholder rights in British company law. These rights are, and always have been, essentially the product of private bargains, subjected to regulation of various explicit and implicit forms. This legal framework has significant normative advantages: it facilitates the development of innovative and efficient corporate structures. That is demonstrated through empirical evidence and examples from British corporate practice. One key example is how so-called ‘indirect investors’ in a company – the large and economically significant group of people who invest in a company through intermediaries such as nominees and depositaries – can be accommodated within the governance structure of the company, even though they are not themselves shareholders in the company and so are not directly party to its internal governance mechanisms. With this domestic legal background in mind, the article finally addresses and assesses the impact and effect of the proposed EU Shareholder Rights Directive on British company law and practice.

Following Mülbert's presentation, the first discussion concentrated mainly on the efficiency of legal (minimum) capital in contrast to alternative solutions for creditor protection.

This issue of EBOR presents to a wider audience the papers and proceedings of a symposium on ‘Efficient Creditor Protection in European Company Law’, which took place from 1 to 3 December 2005 at the premises of the Max Planck Institute in Munich, as a joint venture of Munich’s Ludwig Maximilians University and the Max Planck Institute for Intellectual Property, Competition and Tax Law. As the organisers of this conference, we were proud and delighted that so many outstanding scholars from Europe and the United States agreed to participate, give presentations, make comments and contribute to the discussions, although we had nothing to offer but a lot of preparatory work, uncomfortable winter travel and the prospect of exchanging some views on questions of corporate law reform in our conference room. We would also like to express our gratitude to the Max Planck Society for the Advancement of Sciences for its generous financial support of the conference and this publication.

Summarizing the many thoughtful papers presented at this conference is a difficult task for an outside observer of European law reform. In lieu of bad comments on good papers, I offer instead my own observations on several of the conference's principal themes.

The first afternoon session included three presentations addressing the issue of whether regulatory requirements are required or helpful to ensure efficient creditor protection. The chairman, Marcus Lutter of the University of Bonn, introduced the afternoon's topic by highlighting the positive effects a legal capital concept might have. John Armour of Cambridge University questioned this concept in his presentation by arguing that such a regime was outdated in today's economy. Holger Fleischer of the University of Bonn followed with additional critical remarks. In his comments, he referred to the distinction between voluntary and involuntary creditors, the latter having no opportunity to protect themselves by means of a contract. One example given were tort victims. John Armour focused strongly on a similar distinction; however, he referred to them as adjusting creditors and non-adjusting creditors. Most participants agreed on the major relevance of this distinction.

The first round of discussion focused on the presentation by Rickford and Schön's commentary on it. It concentrated on the question of how to determine distributable profits and whether to apply a balance sheet test, a solvency test or a combination of both.

Many participants pointed out that management is already under a duty to attempt a turnaround, including an out-of-court workout, in most European jurisdictions. At present, it seems unclear, however, when such a duty ‘in the vicinity of insolvency’ would run specifically to the company's creditors. It was emphasised that the ‘probability of insolvency’ test proposed by Eidenmüller is not intended to trigger formal insolvency proceedings; rather, it should only give rise to the directors' duty of care to creditors in managing the company – which, as the case may be, requires directors to continue or cut back business operations, to undertake restructuring and refinancing efforts and/or to initiate formal bankruptcy proceedings. The duty should not only require directors to take action but also to abstain from ‘risk-shifting,’ i.e., from increasing the company's business risk to the detriment of creditors. Because bankruptcy of small and medium-sized corporations often entails individual insolvency of directors, criminal and administrative sanctions – including director disqualification – should be applied to ensure effective deterrence.

Although this paper focuses primarily on Czech company law, it begins with a description of the general legal development of Czech commercial (including company) law. The first part describes the social and historical background of the Czech law after the period of Communism (1948–1989), some defects ensuing from a paradigmatic understanding of law and problems with Czech case law. The paper tries to manifest that it is impossible to understand the Czech concept of (private) company law without a thorough knowledge of the legal thinking of current Czech judges and the relevant authorities. After this broad introduction, a selection of legal literature dealing with commercial and company law is provided.

The second part of the paper provides some general information on Czech company law, mainly its systematic incorporation into Czech private law and the structure of the Czech Commercial Code. The following sections describe each company type (partnership, limited partnership, limited liability company and joint-stock company) and co-operatives, including the European law connotation, supranational entities and their implementation in Czech law (Societas Europaea, European Interest Groupings and the European Co-operative Society). The anticipated future development of Czech private law (civil and commercial law) is sketched at the end of the paper, taking into account the drafts of the new Civil Code and Commercial Act and other new proposals related to private law.

This article discusses the plans of the European Commission to harmonise shareholder rights in the European Union. At the same time, it puts forward various reasons why this would not be a significant step forward and argues that it should therefore be reconsidered whether the intended directive on shareholder rights is really needed.