Suchergebnisse

Creditor protection in the recently adopted Finnish Limited Liability Companies Act (FLLCA)1 has gone through structural changes compared to the preceding Finnish Limited Liability Companies Act of 19782. Novelties in the creditor protection of the FLLCA is that asset distribution is tied to maintaining the solvency of the company and contrary to the 1978 Act, creditor protection now covers also the company's distributable reserves of unrestricted equity. Consequently, assets may be distributed only if the company has adopted a financial statement,3 which indicates the amount of the company's reserves of unrestricted equity that may be distributed,4 unless otherwise ensues from a solvency test. The solvency requirement is set forth in Chapter 13, section 2 of the FLLCA: "Assets shall not be distributed, if it is known or should be known at the time of the distribution decision that the company is insolvent or that the distribution will cause the insolvency of the company." It is important to notice that the solvency test applies not only to the distribution of reserves of unrestricted equity, but also to restricted equity even when the creditors have consented to its distribution in accordance with the creditor protection procedure laid down in chapter 14 of the FLLCA. The aim of this paper is to discuss the solvency test and the balance sheet test5 in chapter 13, section 5 of the FLLCA respectively, and assess how they should be carried out as well as what should be taken into account when doing so. Moreover, as an example I will compare the tests to creditor protection in the New Zealand Companies Act (NZ CA)6, with a special focus on whether the solvency test therein could help in the application or practical development of the solvency and balance sheet tests in Finland. The extreme distance of New Zealand to Finland and the fact that the common law system differs in both history and content from the Finnish legal system, were not the only reasons for selecting this creditor protection system as the point of comparison. It was chosen as an example of how two legal systems with different historical backgrounds and in two countries far apart can end up with rather similar mechanisms for solving conflicts of interest between creditors and shareholders, with the aim to prevent the opportunism of insiders, i.e. management and controlling shareholders. The comparison also serves as a tool for examining the control mechanisms of basically dispositive company legislation ex ante. The 1993 NZ CA reform is a valid reference point also in other respects, because its ideas and goals for modernisation were similar to those prevailing in the reform process of the FLLCA. Accordingly the NZ CA aims: "To encourage efficient and responsible management of companies by allowing directors a wide discretion in matters of business judgment while at the same time providing protection for shareholders and creditors against the abuse of management power."7 In their extensive commentary of the NZ CA reform, Ross Grantham and Charles Rickett maintain that the act should 1) be understood as a model agreement between different interest groups in a company, 2) prevent any opportunistic behaviour of management and controlling shareholders, 3) in its extent and nature correspond to the risk of abuse of controlling positions and not prevent financial activities, and 4) be sufficiently simple and not too detailed.8 Thus it is no surprise that both the FLLCA and the NZ CA include provisions on creditor protection based on the maintenance of company solvency in addition to the traditional balance sheet test now used for determining the amount of net assets. The adoption of the solvency test also required reform of the regulation of modern limited liability companies and their activity. The traditional balance sheet and share capital-oriented creditor protection cannot be considered a sufficient means of meeting the requirements of good and efficient company legislation that protects all interest groups. The purpose of the solvency test is very simple. It aims to ensure the allocation of creditors in terms of assets and liabilities, by preventing such distribution of assets that would endanger the timely payment of receivables to creditors in the proper amount. Under NZ CA the solvency test is applied not only to the protection of creditors, but to fixed preferential returns on shares ranking ahead of those in respect of which a distribution is made.9 Technically, this entails that in the application of the solvency test under NZ CA the above-mentioned shares are considered debt according to their financial character.

Company Law, Insolvency Law, Restructuring Directive ; The article discusses one of the most fundamental aspects of corporate law, namely the interse­ction between company law and insolvency law, with specific regard to the recent EU Directive on Preventive Restructuring (EU 2019/1023, the 'Restructuring Directive' or 'Directive')2. It notes the forthcoming implementation of the Directive in the EU Member States. The key options for implementation of the Directive available to European legislators are introduced, including an option based on company law which, according to the recent LL.D.­dissertation of the co­author, would provide more tools for restructurings than are available under the frame works based on insolvency law. This would create efficient mechanisms in particular for the preventive restructu­ring of solvent companies, but also for the completion of a friendly takeover of a publicly­listed company through a scheme of arrangement under company law. The scheme of arrangement mechanism has also been included in the recently published European Model Company Act. ; Non peer reviewed

The Study on Directors' Duties and Sustainable Corporate Governance (hereinafter 'The Study') was published on 30 July 2020 and is accompanied by a Commission Inception Impact Assessment and a consultation deadline of 8 October 2020. The Assessment adds very little to the Study and this response is consequently made to the Study by a group of Nordic company law scholars. Resume of Findings. The Study displays a lack of understanding of the nature of legal discourse and presents a biased, unrepresentative and highly politically motivated survey of literature and empirics. The Study misrepresents fundamental concepts of company law and fails to understand how corporate governance works. The Study exaggerates the problem of climate change and neglects the many other, equally serious, problems facing both company directors and EU legislators in their obligations to their respective constituencies. The policy pursued by the Study contravenes both fundamental concepts of ownership rights inherent in European law and the basic policies that underlie the founding treaties of the European Union and its assumptions are equally incompatible with EU secondary legislation on company law and capital markets. The Study underestimates the many existing measures adopted by EU legislators and their potential to serve as alternatives to its own far-reaching measures in a way that fundamentally would void the principle of subsidiarity and deprive Member States of control with their own economies. The regulatory options recommended by the Study would seriously harm European business and prevent it from continuing to contribute to the sustainable growth and prosperity that the Union needs to fulfil its overall policies. On this basis, we find that the Study cannot serve as the basis for contemplating the proposed regulatory initiatives and that any discussion must proceed on a better informed foundation brought about by a free and unbiased discourse.