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National Corporate Law in a Globalised Market

The UK Experience in Perspective

David Milman

In this timely book, David Milman considers how UK corporate law has been affected by the forces of globalisation, arguing that this is not a new development, but rather is part of an historical continuum. He examines corporate law regulatory strategy in general, treatment of foreign shareholders and multinational groups, aspects of private international law and issues connected with cross border insolvency.
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Chapter 2: Comparing core regulatory strategies

David Milman


1 REGULATING COMPANIES: JUSTIFICATION There is a fierce intellectual debate under way here.1 The orthodox view of companies is that they are creatures of the state, and, as they confer on their incorporators the considerable economic advantage of limited liability for the firm’s debts, it is entirely appropriate that in the public interest they be heavily regulated. This has been the view traditionally taken in English law2 and is a perspective that is shared in much of Continental Europe.3 On this view, there is no constitutional entitlement or fundamental right guaranteeing incorporation.4 Companies can be controlled at the point of entry by refusing the privilege of incorporation5 or by removing corporate status through processes such as liquidation and dissolution. Companies can be wound up in the public interest under s. 124A of the Insolvency Act 1986, even though they may be solvent. Ultimately, companies can be taken into public ownership if this is deemed necessary to protect the state interest. The nationalisation of Northern 1 For illuminating overviews of the paradigm theories on the juristic nature of companies, see S. Bottomley [1990] 19 Fed L Rev 203 and S. Worthington (2001) 22 Co Law 258 at 263. 2 Companies are creatures of statute – Daimler v Continental Tyre [1916] 2 AC 307 per Lord Parker, Butler v Broadhead [1974] 2 All ER 401 per Templeman J. Sovfracht [1943] AC 203 discussed by A. Farnsworth (1944) 7 MLR 80. 3 For the European view that companies merely enjoy a concession from the...

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