Company Law, Connecting Factors and the Digital Age – A New Outlook

Usually connecting factors in company law play a decisive role with regard to the corporate governance model of a company and with regard to the level of protection of stakeholders. Their importance generated a long-lasting debate on which connecting factor is “better” and which one is compatible with internal market rules. However, technological developments and digitalisation shed a different light on this discussion.

In order to understand how the current developments impact the discussion on company law connecting factors, it should first be clear what is really understood by connecting factors in the jurisprudence of the Court of Justice. It is important to understand the relationship between substantive company law rules and those on conflict of laws.

The outcome of the above analysis allows to add the digitalisation/new technologies factor into the equation. In this context, a closer look is given at the use of artificial intelligence applications in company law and the operation of a decentralised autonomous organisation within a blockchain network. It allows to question the effectiveness and usefulness of traditional connecting factors.