Common Law vs. Civil Law
One way we can perhaps “pigeonhole” how work is going to unfold in a jurisdiction is in the differences between Common Law and Civil Law. Being aware of the distinction between these two different types of law can be even more confusing when you add the difference in countries as a variable. Agile Legal has an intricate network of legal professionals in different countries to ensure that when a client is doing business internationally, they are staying compliant and within the regulations of the business being done in. From research and collaboration with peers, we have compiled answers for many of our clients who have wondered about the difference between common vs. civil law in different countries.
Common Law is what we recognize here in the US (unless you are from Louisiana, where State law is based on Civil Law because of Louisiana’s history as a French and Spanish territory before its purchase from France in 1803). Common Law is a legal tradition that emerged in England during the Middle Ages and was applied within British colonies across continents. So common law countries tend to be members of the commonwealth – UK, Australia, NZ, Canada (except for Quebec due to its French History), parts of Africa which were colonized by the Brits, and India. Most of the world outside of America however is governed by Civil Law rules. Civil law traditions were developed in continental Europe also during the Middle Ages and were applied in the colonies of European Imperial powers such as Spain and Portugal. Spain and Portugal brought Civil Law to South America, Napoleon took Civil Law across Europe, into Russia.
UK Compared With Spain
A great example of how these two different types of law can drastically change once borders are crossed is between the UK and Spain. In Spain, a tax representative is required, as in the UK, it is not. Spain can also take two months and compared to one week in the UK. Spanish regulations depend on the location. In the UK, we complete the application to register a company (a Companies House form IN01 – this lists out directors, share capital and shareholding, and Persons of Significant Control), Articles of Association, and the Memorandum of Association. These forms are then submitted to Companies House and the turnaround time is approximately 3 days. Companies House returns the Certificate of Incorporation, and your company is formed.
Whereas one system of law is not better than the other, there are a couple of systemic trends, bearing in mind generalizing is over-simplistic and we would still need to examine each country individually. For example, common law countries have a centralized registry whereas civil law tends to have much more localized administrations, which means instead of a single filing, there may be multiple filings at several different locals, district, regional, and federal levels. But bear in mind, whereas filings may be regional – largely for tax purposes, civil law countries may also have a centralized registry for search purposes. Although in the US and Canada there are common registries, in the US, the common registry is at the State level. In Canada, there is a federal registry, but you can choose to form only in the Provinces or Territories. If you do form federally, you may still have to register at the more local – yet autonomous – provincial level.