EU commercial law fundamentals and applications

European Union Commercial Law

The European Union deals with a variety of commercial law issues, as commercial law can restrict how products are marketed across borders (Latvia, 2003). With the increasing number of countries participating in the European Union, more and more areas of commercial law are being harmonized between the member states. The broad scope of unification ranges from free trade of goods to major issues of competition law. Nations are frequently reluctant to amend their old laws, unless the resulting benefits are considerable in both economic and functional terms, so commercial law is an issue of major importance in Europe.

Many commercial benefits have been identified with respect to the commercial law sector, given that the European Council adopted the Regulation EC 2157/2001 on 8 October 2001 by introducing the status of EU company (Latvia, 2003). The new business form of European company is a public limited company, meaning that the capital of the company is made up of corporate shares and the liability of each individual shareholder does not exceed the value of his shares. The name of a company established by this regulation is followed by the abbreviation 'SE'. Registration is set up according to the rules of the host member state and a publication must be placed in the Official Journal of the European Communities.

The EU commercial law development is expected to enable cost saving for many businesses planning cross border transactions and other activities (Latvia, 2003). For example, companies from various member states will be able to merge directly despite specific local legal regulations that restrict member states. Mergers are still subject to EC Treaty provisions 81 through 86 (which govern competition law in the EU) but are not expected to cause any problems for smaller entities.

Commercial law in the EU provides an interdisciplinary comparison of business laws across the EU states, explaining what the laws do and how they affect the way businesses are run (Latvia, 2003). Incorporating issues such as corporate governance, migration of companies, competition policy, social policy, tax policy and doing business with the public sector, EU commercial law examines each from the perspective of cross-border corporate management.

For example, the issue of competition is crucial to commercial law in the EU. According to Trancs: "The source of laws governing competition for the EU is embodied in the Treaty on European Union, as amended by the Treaty of Amsterdam, signed on Oct. 2, 1997. Article 81 of the treaty governs agreements between, or practices of, two or more parties acting together that have as their object or effect the restriction of competition in the EU. Article 82 governs abusive business conduct of a single party in a dominant market position."