The EU has decided to revise its company law rules so that they remain fit for purpose in the modern digital age. The goal is to achieve greater efficiency, transparency and legal certainty through the use of digital mechanisms.
The European Council and the European Parliament have recently reached an agreement on a draft directive which will open the door for online solutions in a company’s contact with national regulatory authorities throughout its ongoing development.
The new and innovative rules ensure that:
- companies are able to register limited liability companies, set up new branches and file documents for companies and their branches, to the business register fully online;
- national model templates and information on national requirements are made available online and in a language broadly understood by the majority of cross-border users;
- rules on fees for online formalities are transparent and applied in a non-discriminatory manner;
- fees charged for the online registration of companies do not exceed the overall costs incurred by the member state concerned;
- the 'once-only' principle, whereby a company would only need to submit the same information to public authorities once;
- documents submitted by companies are stored and exchanged by national registers in machine-readable and searchable formats;
- more information about companies is made available to all interested parties free of charge in the business registers.
Concurrently, the directive sets forth the necessary preventive measures against fraud and abuse in online procedures, including control of the identity and legal capacity of persons initiating the company and the possibility of requiring physical presence before a competent authority. It conserves the participation of notaries or lawyers in company law procedures, seeing that these procedures can be completed fully online. It also foresees an exchange of information between member states on disqualified directors in order to prevent fraudulent behaviour.
The next step is for the relevant bodies of the European Council and the European Parliament to approve the provisionally agreed text. It will then be conventionally adopted after the usual legal/linguistic perusal.