EU rules in this area
The purpose of EU rules in this area is to
enable businesses to be set up anywhere in the EU
provide protection for shareholders and other parties with a particular interest in companies
make business more efficient and competitive
encourage businesses based in different EU countries to cooperate with each other.
Company reporting and auditing complement this legal framework.
What the EU is doing
The Commission invited external stakeholders to provide inputs to its public consultation. The results are accessible under the following link:
The consultation addressed important gaps remaining in the area of law applicable to companies and aimed to gather evidence and views on online tools throughout the companies' lifecycle including cross-border mobility (mergers, divisions, conversions). The deadline for the submission of inputs was 6 August 2017. The responses were taken into account in the Commission’s impact assessment report in parallel with the results of external studies carried out for the Commission and other available information.
On 3 December 2015, the Commission adopted a proposal to codify and merge a number of existing company law Directives. The aim of this proposal was to make EU company law more reader-friendly and to reduce the risk of future inconsistencies. It does not involve any change to the substance of these Directives. The proposal follows the announcement made in the 2012 Action Plan on company law and corporate governance. The proposal has been adopted on 14/06/2017 EUR-Lex Directive 2017/1132
In 2015 the Commission Directorate General Justice and Consumers initiated the "Digitalisation of Company Law" debate with internal and external stakeholders.
On 2 October 2015 the EU Justice and Consumers Commissioner Vera Jurova provided a keynote address to the Company Law in the Digital Age conference in Brussels.
Participants included Members of the European Parliament, EU Member States, and relevant national and international organisations.
Informal Company Law Expert Group
The group assists the Commission in the preparation of new company law initiatives. The expertise of its members should help, in particular, to improve existing mechanisms for cross-border mergers and to develop initiatives on cross-border divisions and “groups of companies”. The Group's focus also included the digitalisation of company law.
The European Commission's Action Plan on company law and corporate governance, adopted in December 2012, outlines several initiatives that could help create a modern legal framework for business, enabling shareholders to play a more active role and resulting in more sustainable companies.
Ernst and Young Study on the Cross-border Operations
The study provides a strong overview of the fragmentation across Member States in relation to cross-border conversions and divisions, the problems it creates for companies and stakeholders and statistical data that was relied on heavily in the Impact Assessment.
Optimity Study on the Impact of Digitalisation
This study presents a comparative analysis between paper and online processes of the following company operations: company registration; company dissolution; filing and disclosure of company information and merger processes and the impacts they have on legal certainty, socio-economic areas and illegal/fraudulent activities. The study is quite useful as it shows digitalisation is a safer option than paper registration and carries with it a number efficiency gains.
Everis Study on Digitalisation
The study presents a good factual overview of the use of digital tools in company law, with the objective of measuring the benefits, constraints and challenges associated with such digitalisation.
Ernst and Young study on identification and assessment of legal and practical impediments for the use of digital tools for interaction between companies and their shareholders
The study analyses the current legal framework and practices in the European Union as regards the use of digital solutions in the interaction between companies and shareholders. It assesses legal and practical impediments to the use of digital solutions and any possible solutions.
The use of digital solutions is in most cases either required or allowed by national laws. Most companies and shareholders use digital solutions, in particular for communicating resolutions adopted in general meetings and meeting notices. The most commonly used solutions are e-mails and corporate websites. Even if they can require significant investment, digital solutions overall allow for faster, cheaper, more convenient, more effective and safer interactions. In-depth research on ten Member States demonstrated that the development of digital solutions more adapted to the users’ needs significantly facilitates their adoption even if the legal framework is not particularly favourable. Impediments to the use of digital solutions were identified: bias in favour of traditional solutions; ineffectiveness of the legal framework; additional burden for using digital solutions; blocking points along the chain of intermediaries; risks related to the chosen technology; and lack of harmonisation of legislation across Member States. Recommendations were also formulated to overcome these impediments.
TGS Baltic study on Minority Shareholders Protection
The purpose of the study is to assist the European Commission in assessing the EU policy on minority shareholder protection. The study includes comprehensive analysis and assessment of every Member State’s legal framework and it focuses on all principal categories of minority shareholder rights, namely economic, control, information, litigation, and equal treatment rights. The study strives to enable policymakers to obtain a clearer picture of Member States’ hard laws, soft as well as case-law. National legal experts as well as national stakeholders in 28 Member States were involved in the preparation of the study to identify both practical and theoretical problems.
The study shows that despite similarities in legal framework for shareholders rights across the Member States, there still exist numerous differences in both regulation and enforcement. In some areas the EU law has a moderate contribution towards the proper functioning of the internal market as well as a limited impact on legal certainty and foreseeability.