Acquisition of its Own Shares by a Company in the United Kingdom From The Perspective of Capital Maintenance Rules

7. The Impact of Regulatory Competition on Legal Capital Rules

In addition to the proposals to relax the regulatory regime, another important development…

Armour argues that the aforementioned case law of the European Court of Justice is having two related impacts on legal capital rules in member states. The first effect is that impact of choice of company law will be priced by creditors in their lending agreements, by selecting laws which are efficient. Member states wishing to attract incorporations will be faced with the task of offering any possible creditor protections mechanisms. Secondly, after mentioning that the European Court of Justice has in effect liberated the process of negative harmonisation he argues that following the three recent cases there has been a large scale regulatory arbitrage over company formation(96).…