INFORMATION TECHNOLOGY
EU Commission proposes more transparency and less bureaucracy for companies in order to improve the business environment in the EU.
The European Commission adopted a proposal for a directive to make it easier for companies to expand the use of digital tools and processes in EU company law.
The proposal aims to facilitate cross-border business transactions and increase transparency and corporate confidence by making more information on companies available to the public at EU level. It will also reduce red tape for cross-border businesses, saving around EUR 437 million per year in administrative burden thanks to an EU corporate certificate or the application of the “one-off” principle. The proposal will contribute to the further digitisation of the single market and will help businesses, in particular small and medium-sized businesses, operate in the EU.
Reducing bureaucracy and administrative burdens.
In order to reduce red tape and reduce administrative burdens for cross-border businesses, the proposed rules include:
The proposal updates existing EU rules for companies (Directive (EU) 2017/1132) to further adapt them to digital developments and new challenges, and to stimulate growth and competitiveness in the Single Market.
In order to ensure greater transparency and confidence in business, the proposed rules aim to:
The proposal will now be discussed by the European Parliament and the Council. It is proposed that Member States have two years to transpose the Directive into national law once it has been adopted.
Context.
Companies are at the heart of the single market. Through their business activities and investments, including at cross-border level, they play a leading role in contributing to the EU’s economic prosperity and competitiveness, and in advancing the twin transition to a sustainable and digital economy To this end, societies need a predictable, growth-friendly and adequate legal framework to address the new economic and social challenges in an increasingly digital world. The proposed measures will apply to around 16 million capital companies and 2 million partnerships in the EU.
The proposal is the second phase of the digitisation of EU company law In 2019, the Digitalisation Directive (EU) 2019/1151ensured the possibility of online company law proceedings, and in particular the possibility of online incorporation of companies. This proposal is complementary and aims to increase the availability of information on companies, in particular at EU level, and to remove administrative barriers when businesses and authorities use this information in cross-border situations. In general, the proposal promotes “digital by default” solutions for accessing or using company information in interactions between businesses and registers or authorities. The proposal will also build on the use of trust services and ensure compatibility of solutions such as the EU Corporate Certificate with the future European Digital Identity Portfolio.
The proposal aims to facilitate cross-border business transactions and increase transparency and corporate confidence by making more information on companies available to the public at EU level. It will also reduce red tape for cross-border businesses, saving around EUR 437 million per year in administrative burden thanks to an EU corporate certificate or the application of the “one-off” principle. The proposal will contribute to the further digitisation of the single market and will help businesses, in particular small and medium-sized businesses, operate in the EU.
Reducing bureaucracy and administrative burdens.
In order to reduce red tape and reduce administrative burdens for cross-border businesses, the proposed rules include:
- the application of the ‘one-off’ principle, so that companies do not have to resubmit information when they form a branch or company in another Member State. The relevant information may be exchanged through the Business Registers Interconnection System (BRIS);
- an EU corporate certificate, containing a set of basic company information, available free of charge in all EU languages;
- a multilingual standard model for an EU digital prosecutor’s office authorising a person to represent society in another Member State;
- The elimination of formalities such as the need for an apostille or certified translations for corporate documents.
The proposal updates existing EU rules for companies (Directive (EU) 2017/1132) to further adapt them to digital developments and new challenges, and to stimulate growth and competitiveness in the Single Market.
In order to ensure greater transparency and confidence in business, the proposed rules aim to:
- ensure that important information on companies (e.g. on partnerships and groups of companies) is made public, in particular at EU level, through BRISIT•••;
- facilitate the search for information on companies in the EU by allowing the consultation of BRIS and, in parallel, of two other systems interconnecting beneficial owners’ registers and insolvency registers;
- ensure that the data in business registers are accurate, reliable and up-to-date, for example by providing for checks on business information prior to their entry in those registers in all Member States.
The proposal will now be discussed by the European Parliament and the Council. It is proposed that Member States have two years to transpose the Directive into national law once it has been adopted.
Context.
Companies are at the heart of the single market. Through their business activities and investments, including at cross-border level, they play a leading role in contributing to the EU’s economic prosperity and competitiveness, and in advancing the twin transition to a sustainable and digital economy To this end, societies need a predictable, growth-friendly and adequate legal framework to address the new economic and social challenges in an increasingly digital world. The proposed measures will apply to around 16 million capital companies and 2 million partnerships in the EU.
The proposal is the second phase of the digitisation of EU company law In 2019, the Digitalisation Directive (EU) 2019/1151ensured the possibility of online company law proceedings, and in particular the possibility of online incorporation of companies. This proposal is complementary and aims to increase the availability of information on companies, in particular at EU level, and to remove administrative barriers when businesses and authorities use this information in cross-border situations. In general, the proposal promotes “digital by default” solutions for accessing or using company information in interactions between businesses and registers or authorities. The proposal will also build on the use of trust services and ensure compatibility of solutions such as the EU Corporate Certificate with the future European Digital Identity Portfolio.
