Legal capital in Europe

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Europe has long experienced diverse company law systems, particularly regarding board structures and the principles of fixed legal capital. This concept is not traditionally part of English and Irish company law, having been incorporated only for public limited companies under the Second European Company Law Directive of 1976, which these jurisdictions have not fully embraced. In response, the British Accounting Standards Board and the Company Law Centre at the British Institute of International and Comparative Law initiated a study led by Jonathan Rickford, concluding that legal capital is costly and unnecessary, advocating for the repeal of the Second Directive. The British government supports this view and seeks action from the European Commission. In contrast, a group of German and European experts, including academics and practitioners, has come together to examine the purpose and effectiveness of fixed legal capital, exploring criticisms and alternatives. This volume includes an executive summary and 16 essays on legal capital in Germany, along with reports from other jurisdictions—France, Great Britain, Italy, the Netherlands, Poland, Spain, and the U.S.—addressing similar questions. The British initiative opposes the Second Directive, which focuses solely on public limited companies, while the study presented here affirms the value of fixed legal capital and aims to persuade the European Commission of the Second Direct