The preoccupation with the political issues of Brexit in
Parliament is one thing, the visibility of the lack of any
constructive Parliamentary debate upon the legal consequences for
British entities transacting with the Continent has been lost in
the fog, on their side of the Channel.
British withdrawal will mean the loss of current standards
of recognition for the United Kingdom, and other British companies
transacting with in Europe, whether passively or
The issue here is that a corporate recognition in Europe is
granted under the right of establsihment on the grounds of
corporate natioonality, which is itself determined by the location
of ts registered office, under article 54 TFEU:
"Companies or firms formed in accordance with the
law of a Member State and having their registered office, central
administration or principal place of business within the Union
shall, for the purposes of this Chapter, be treated in the same way
as natural persons who are nationals of Member States.
'Companies or firms' means companies or firms
constituted under civil or commercial law, including cooperative
societies, and other legal persons governed by public or private
law, save for those which are non-profit-making."
The fragility pf this general definition is clear, if the
registered office is outside the EU, then a priori so is the
Company, but there is a duality of jurisdiction involved.
Is a non EU corporate whose central administration orprincipal
place of business wiythin the EU still an EU corporate entitled to
freeedom of establishment? If so under what law will it be
governed, that of its "alien" registered office or more likely that
by refernce to which it has its reputed EU nationality? That
is a deliberate opening to a discussion of both arguements then in
Taken from a wider perspective than article 54 TFEU rights
and obligations, that will mean that it will be possible for a
court of an EU Member State to apply its own principles of
corporate recognition if called upon by an administration, or by a
That could mean that the very status of a British company
could be fundamentally reappraised and re-interpreted according to
the domestic recognition standards of the Court or administration
in question. Shareholder rights and responsibilities and
directors rights, responsibilities and prerogatives could in
fact be totally recast into a foreign entity. Artile 54 may
not provide any negative protection against such reassessment of
the Law governing a British company post-Brexit within the
Take the French example of article 1837 Code civil, which
is of universal application, not just to commercial companies. Also
the Centros case decided by the CJEU. The Centros protection
will not apply per se to a United Kingdom corporate after Brexit,
particularly given the adminsitration and prinpal place of business
tests for EU, not "British" nationality.
The fundamental being of a company and the laws governing
it has been a continuing source of legal discussion in
Europe. That it has been quenched as between EU Member Staes
by the Treaties is no more than a panacea.
Is a company, and its constitutive organs, governed
by the laws of the place where it is actually managed and
administered on a day to day basis: the siège réel test? Or only by
reference to its registered office address, the siège social
In some continental jurisdictions, litigants can in fact
put themselves in a position of choosing between these two: France
permits this, and that facility has been used on several occasions
by the French tax administration to totally recast the British
limited company as a French one, with a fundamental change in
managerial responsibilities up to unlimited personal
Beware if a British company being translated as an
Sarl: its directors have just become assimilated to
gérants, and if members with unlimited personal
liability in some areas.
Protection against such juridical and administrative
aggression has been provided by EU Membership. That protection will
Resources page for more indications as to answers.
Are you ready? If not ask yourself the question, will my
company structure be recognised as such post-Brexit, particularly
if I am running it from a keyboard from a Member State?