Bringing company law into the 21st century
Pedro Oliveira
Director for Legal Affairs, Business Europe
“Bringing company law into the 21st century
The EU is currently taking important steps to modernise EU company law so it better responds to the challenges of an increasingly competitive world where digitalisation became an irreversible process covering many central dimensions of people’s and companies’ lives.
Despite substantial progress in the EU legal framework, companies still find it difficult to conduct business in another Member State for reasons related to, for example, registration of a new company, registration of changes in a company, creation of subsidiaries, or transfer of a company’s seat. Depending on the Member State it can take from 2.5 to 30 days from the moment you register a company to be able to start your activity. In more than a third of Member States entrepreneurs still need to physically go to a registry or a notary to perform certain company operations. This is costly, time consuming and impractical.
For many years, BusinessEurope has consistently asked for EU tools that would help companies perform essential corporate operations in a cost-effective manner and to allow companies to expand in the internal market (whether by setting subsidiaries, merging or dividing) in a clear and legal certain way. In 2016, BusinessEurope adopted a paper on digitalisation proposing ideas to fulfil these objectives[1] which anticipated a Commission consultation later on followed by the EU Company Package (April 2018) which tries to respond to the challenges.
BusinessEurope welcomed the proposal seeing it as an opportunity to finally bring EU company law into the 21st century. It has produced detailed comments, organised events and promotional videos to make decision-makers aware of the importance of such initiatives for companies and to get the balance right[2]. Of course, all the necessary technical and identity checks need to be there to make sure we create trust around the procedures. At the same time, protecting the interests of owners, business partners and workers of the company remains a must.
We are reaching the final stages of the legislative process. BusinessEurope continues to play an (acknowledged) active and constructive role to bring these proposals into the finish line. Our objective is two-fold: ensure the part focusing on digital tools is quickly adopted, and ensure that the mobility rules are seen not as a way to limit the freedom of establishment but how to exercise it in a clearer and safer way with benefits for all (companies, shareholders, creditors and workers).
Although not part of the Company law Package, BusinessEurope also welcome the now agreed directive on insolvency and second chance. In Europe, 50% of new businesses go bust within the first five years at the expense of 1.7 million jobs losses a year in the EU. BusinessEurope strongly supported the Commission proposal[3] which will be a step in the right direction. It makes sure there is access in every Member State to alert systems (to detect problems) and to restructuring procedures. Insolvent honest entrepreneurs are also given legal ability to start over after fulfilling certain conditions.“
[1] https://www.businesseurope.eu/sites/buseur/files/media/position_papers/legal/2016-01 13_digitalisation_company_law_and_corporate_governance.pdf
[3] https://www.businesseurope.eu/policies/corporate-and-legal/company-law/insolvency
