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Legal Capital rules in Europe: is there still room for creditor protection?



My article “Legal Capital Rules In Europe: Is There Still Room For Creditor Protection?”, has just been published on the International Company and Commercial Law Review, vol. 24, issue 4, 2013, pp. 166-172. This paper was originally presented at the “Corporate Law Teachers Association Conference 2012 — Corporate Law in Times of Change”, on February 6, 2012, at Bond University, Gold Coast, Queensland.

Here is the abstract: Company Law in the Macao Special Administrative Region of the People’s Republic of China (a Chinese territory which was administered by Portugal until 1999) is based on the premise that a company must at all times keep a certain capital base in order to operate. Under the influence of the European Union’s Second Company Law Directive of 1976, the law of Macao maintains a complex regime aimed at capital maintenance. Traditionally, these rules are seen as a means of protecting the creditors’ interests. This paradigm is being debated in Europe. According to some commentators, the costs associated with these requirements significantly outweigh any benefits accrued by creditors, and therefore they should be abandoned in favour of more flexible rules. In this article we discuss whether the company’s capital may still play an important role in the development of business and in the protection of creditors’ interests.


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