Few would doubt that the commercial success of the single European market depends to a considerable degree on the performance of companies.1 'The limited liability corporation is the greatest single discovery of modern times. Even steam and electicity are less important than the limited liability company.' 2
Companies can only exist and perform within a legal framework. The importance of providing the right legal framework is therefore considerable. The first step to achieving this end is to discover the nature of company law. Two disparate approaches may be discerned. The first is that the importance of companies in the economic system makes them an important tool in social engineering. This approach is evidenced by detailed regulations aimed at protection of shareholders or public, or in the German and Dutch worker participation provisions. The opposing position is that company law should provide a simple enabling framework with the minimum of restrictions on entrepreneurial freedom consistent with the prevention of major injustices. These two opposing conceptions of company law must be further examined. If the conceptual basis for harmonization measures is not consistent with a philosophy of company law, the measures adopted would seem to have little chance of forming a commercially effective framework within which that immensely important entity, the company, will have to operate.
One of the consequences of the central economic importance of the corporation is that 'from the perspective of the policy-maker the business____________________