Decided 30 December 2003 End date December 30, 2003 | Citation(s) (2003) C-167/01 Ruling court European Court of Justice | |
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Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd (2003) C-167/01 is a leading corporate law case, concerning the EU law of freedom of establishment for companies.
Contents
Facts
The art company "Inspire Art Ltd" claimed that the Dutch law requirement for a minimum capital to operate in the Netherlands was an unjustified restriction on its right to freedom of establishment (now under TFEU article 49). The company was incorporated in the United Kingdom, which accords to the "incorporation theory" rather than the "real seat theory" of establishing a business in conflict of laws. It wished to carry out business in the Netherlands, running an Amsterdam art studio. Dutch law, however, applied to pseudoforeign companies to impose minimum capital requirements on businesses operating within the country. When the Dutch authorities required the company to comply with Dutch law, the question was whether that disproportionately interfered with Inspire Art Ltd's right to freedom of establishment.
Judgment
The Court of Justice held that creditor protection did not justify imposing additional requirements to those of the United Kingdom, where Inspire Art Ltd was incorporated. In this case, creditors were sufficiently protected by the fact that the company held itself out not as a Dutch company but one subject to UK law. The minimum capital requirements were a disproportionate method of achieving the aim of creditor protection.