PROPOSITION ON THE MODERNISATION OF EU COMPANY LAWS

In order to promote economic growth, create jobs and attract investments in the EU, in December 2018 the European Commission adopted a proposal for a directive on modernising the existing EU company law. Due to the tendency that companies use digital tools more often in their business, while the electronic or online interaction with public authorities are not always possible, the European Commission proposed to amend the existing EU legislation with the goal to facilitate the use of digital means and online procedures for registering limited liability companies.

The proposal ensures on one hand that companies have available information on the requirements of registration and operation of business entities and they are also able to register online. On the other hand, the requirements on the use of templates and the applicable national templates will be made available online for the companies. With the proposal, the Commission ensures that procedural fees for online registration cannot exceed the actual administrative costs. Additionally, further information about companies will be made available to all interested parties free of charge in the business registers. This proposal will also enable companies to reuse certain information that has been submitted to a company register before (“once-only principle”).

At the same time, the proposed directive sets the necessary safeguards against fraud and abuse in online procedures and also maintains the obligation that notaries or lawyers shall participate in completely online company law procedures.

According to the European Commission, under the so called “digital tools” proposal, companies of the Member States will be able to register, set up new branches or file documents to business registers online. The Commission’s proposal is open for negotiation with the European Parliament for adoption.